As consumers demand newer, more innovative products and global competition grows, product lifecycle management (PLM) is expanding out of the engineering department to the broader enterprise.
PLM, the management of product information from inception to retirement, has been used mainly by engineering to centralize engineering data, diagrams, process specifications and other more technical data. But today, PLM is expanding to the enterprise level, according to a recent study from Cambridge, Mass.-based Forrester Research Inc.
"PLM's enterprise-wide expansion is largely due to the changing nature of how global companies now compete on innovation," said Roy Wildeman, senior analyst for Forrester. "Product development teams must increasingly collaborate with a variety of cross-functional stakeholders -- such as manufacturing, sales and marketing -- to ensure that their engineering inventions become timely, business-relevant innovations in the marketplace."
As PLM becomes more popular, the market for PLM solutions is becoming more complex, with customers choosing among enterprise content management (ECM) vendors and larger ERP providers, and systems integrators also entering the mix for services, according to Wildeman.
But many companies are looking to a familiar place for PLM -- their ERP provider.
"In the current PLM marketplace," Wildeman said, "many firms weigh the value of a pre-integrated PLM-ERP solution over the need to manage a range of complex technical product data via a best-of-breed solution."
In fact, the major ERP players -- SAP, Oracle, Infor and IFS -- count on PLM business from their existing ERP customer base, Wildeman explained, and they continue to build out their enterprise-wide PLM processes -- either organically or through acquisition -- to serve this demand.
And SAP is no different, he said. Its integration capabilities and recent investments in role-based content and collaboration make SAP PLM a logical place to start for current SAP ERP customers.
"Manufacturers that are also SAP ERP customers will want to investigate SAP's PLM offering," Wildeman said. "[Look closely at] the potential integration benefits from interdependent process areas like project and portfolio management, direct material sourcing, and configuration management."
Those purchasing PLM can expect to see many similarities to an ERP implementation, starting with the number of people likely to be involved.
"Alignment challenges start to arise as you move PLM from engineering-centric to a cross-functional discipline," Wildeman explained. "You have an increasing number of different stakeholders at the sponsorship table -- more business owners combined with IT executives."
Customers must also consider configuration versus customization and using technology standards. Therefore, interoperability or partnership between an organization's ERP/PLM provider and ECM players is a large consideration, as is expertise from a systems integration partner, according to Wildeman. Developing long-term relationships with these vendors is a key success factor when bringing PLM up to the enterprise level.