The PLM Technology Landscape

PLM environments facilitate innovation on all fronts by providing clear, accurate, and valid information across the extended enterprise.

Though it has been around as a concept since the 1980s, there remains considerable uncertainty about what PLM is or can do. This confusion is preventing many companies from adopting PLM.¹⁰

A solid understanding of a PLM system and the capabilities it offers is necessary to take advantage of the benefits it may provide. Additional time must be spent understanding an organization’s product development processes as well as desired changes. Lack of a clear understanding of either of these elements contributes to the number of challenges, anticipated and not anticipated, that companies encounter as they implement PLM.¹¹

This must be viewed in the context of today’s business environment. In the face of increasingly volatile competition, short-term drivers are taking a higher priority simply on the basis of survivability. Businesses everywhere, large and small, have been stressed. The result is a decided shift to bottom-line priorities, such as cost reduction and clear operational efficiencies. Investments being made are those seen as having an immediate impact on performance. Innovation no longer applies simply to products, but just as importantly to processes, both internal (i.e., how companies plan, develop, make, and service) and external (i.e., how companies interact with customers).

PLM environments facilitate innovation on all fronts by providing clear, accurate, and valid information across the extended enterprise. In these environments, all those involved in the process have access to clear product definitions; therefore, collaboration—enabled broadscale by PLM—becomes the engine of innovation.

Two Different Types of PLM

PLM solutions are typically segmented into “best-of-breed” or “platform” approaches. The former provide solutions based on a focus on engineering, product development applications, and specific processes, while the latter are typically thought of as part of integrated enterprise solutions, based on their common platforms, data, and applications.¹²

As such, organizations typically face three PLM implementation options:

1. PLM from an independent PLM supplier  (best of breed)
2. PLM from an enterprise solutions provider (platform)
3. A hybrid PLM approach¹³

Commercial PLM solutions reflect the providers’ different historical backgrounds. Typically available PLM solutions feature generic and pre-configured templates for data models and processes, and functions for specific domains of applications or industries. Their strengths include the management of CAD models and technical documents, the support of engineering releases and change processes, and strong integration with CAD, enterprise resource planning (ERP), and data systems. ¹⁴

As the complexity of the market has risen, so has the potential of PLM overlapping or conflicting with projected or ongoing initiatives, and legacy investments. Therefore, aligning PLM with other enterprise initiatives is increasingly critical as the footprint of PLM expands. As it does, new battles between enterprise arenas are likely to emerge to the extent that PLM is not well aligned. 

Core capabilities remain a central priority of PLM investment, but, as in other software sectors, companies are clamoring for “more for less,” including sophisticated sourcing and analytical tools.  Some elements of PLM are becoming commoditized, something suppliers can leverage into their systems to expand functionality.

As comprehensive enterprise solutions continue to proliferate, PLM has emerged as one of the key strategic initiatives in many organizations. One reason for this: PLM successes have become visible at companies large, midsize, and small. 

The thrust to implement PLM across the extended enterprise has faced a number of challenges:

1. Wider PLM implementations span more and broader functional groups. This has required an increase in phased implementation and cultural change programs, and raised the premium on program and project management.
2. Services take center stage. Service support, historically secondary or tertiary in implementations, now is a  critical element. Sources of support include partners, software suppliers, systems integrators, and internal resources. Effective coordination between these sources is critical, albeit often difficult.
3. Hybrid approaches are gaining traction. In the words of a leading industry consultant, “Enterprise PLM requires  committing to both an overall vision and packaged steps.”¹⁵  Different messages are required for different functional roles, and commitment in organizations must be both top-down and bottom-up.

The value of the PLM market in 2008 was estimated at $27 billion, with growth rates expected to slow from nearly 13% in 2008 to around 4.75% in 2010.¹⁶ Growth rates are expected to recover to somewhere between 7% and 8% by 2013.¹⁷