Broader Scope PLM Yields Greater Business Value

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For many years, manufacturing firms have used PLM (Product Lifecycle Management)
to drive strategic benefits ranging from top-line growth to bottom-line savings. A
recent survey of 200 manufacturers conducted by Tech-Clarity and PTC, however,
shows that the level of business improvement that manufacturers achieve from their
PLM programs varies widely.
In this context, one of the most important findings of the study is that the top
performing companies are much more likely to embrace PLM across a broader range
of organizational functions and processes. In other words, the more that companies
use PLM the greater value they achieve.
This is true in three different aspects of PLM implementations:
• Process: Business processes implemented
• People: Departments adopting the solution
• Time: How long the technology has been in place

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Broader Scope PLM Yields Greater Business Value

  1. 1. Global Services InsightsBroader Scope PLM YieldsGreater Business ValueFor many years, manufacturing firms have used PLM (Product Lifecycle Management)to drive strategic benefits ranging from top-line growth to bottom-line savings. A Figure 1: Business Processesrecent survey of 200 manufacturers conducted by Tech-Clarity and PTC, however, Implemented with PLMshows that the level of business improvement that manufacturers achieve from theirPLM programs varies widely. 5.3In this context, one of the most important findings of the study is that the topperforming companies are much more likely to embrace PLM across a broader range 4.5of organizational functions and processes. In other words, the more that companiesuse PLM the greater value they achieve.This is true in three different aspects of PLM implementations:• Process: Business processes implemented• People: Departments adopting the solution• Time: How long the technology has been in placeProcessThe survey asked companies how many major business processes are implemented intheir PLM solution (e.g., engineering change management, manufacturing planning,and so on). As shown in Figure 1, the higher performing companies have used PLM toautomate more processes, indicating they are using PLM to add value in more ways.Specific processes that the top performers cited more frequently include quality planning Average Highand project/portfolio management. This suggests that top performers are addressing and Lower Performing Performingstrategic business processes across the enterprise in addition to improving core product Companies Companiesdevelopment capabilities. About the Research: PTC Global Services and Tech Clarity, an analyst firm that specializes in product life cycle management, interviewed 190 senior business and IT leaders in April 2012 about their experiences with PLM. The goal of the telephone survey was to understand key success factors in planning, implementing, and adopting PLM solu- tions in complex manufacturing environments. The survey highlighted four issues: PLM strategy and approach, programmatic challenges, implementation and adoption techniques, and adoption. Survey partici- pants included representatives of a wide range of manufacturing companies across Europe and North America, including automotive, aerospace, industrial, and consumer products.PTC.com PTC | 1
  2. 2. PLM has clearly expanded from the core foundation of managing productdata, enabling manufacturers to achieve more value across the business. Figure 2: Tech-Clarity’s FourTech-Clarity’s “four dimensions of PLM expansion” shows how the scope Dimensions of PLM Expansionof PLM is expanding to include more people, a more extensive scope ofthe product lifecycle, a richer view of the product, and more businessprocesses (Figure 2).For example, PLM has grown to support processes such as environ-mental product compliance and service management. At the same time,PLM systems often now integrate a more complete view of the product,including commercial information and manufacturing data in addition totechnical specifications. This provides more opportunity to expand adop-tion and capture the value identified by the survey.People Figure 3: Departments Adopting PLMGiven the expanding potential of PLM, perhaps it is no surprise that thesurvey documented similar results regarding the range of people anddepartments across the business using PLM. Specifically the survey shows 4.4that the high performing companies have extended PLM to more parts oftheir business than the others (Figure 3).Additional departments cited more frequently by the high performers 3.1include non-Engineering departments such as Sales & Marketing, Quality,and General Management. PLM implementations clearly provide more High Averagevalue when extended outside of the Engineering department. Performing and Lower Companies Performing CompaniesTime Figure 4: Length of Time PLM AdoptedFinally, the higher performing companies have been using PLM for alonger period of time. In fact, approximately three-quarters of the highperforming companies had PLM in place for more than 2 years comparedwith only 38% of the other companies (Figure 4). PLM can offer a rela- 0 1 2 3 4tively rapid ROI, but as companies expand PLM to more processes anddepartments over time they gain greater value. 0-2 Years 24% 62% 2-4 Years 39% 22% 4+ Years 37% 16% High Average Performing and Lower Companies Performing CompaniesPTC.com PTC | 2
  3. 3. Why are these findings important? The study shows that beyond theinitial value manufacturers gain from implementing PLM they can “goback to the well” multiple times to get more value. PLM is a strategicinvestment with long-term potential to drive year-over-year improve-ments through greater adoption.The fact that greater PLM adoption provides greater value shouldencourage manufacturing companies that are looking for new ways toimprove their business. Once their PLM foundation is in place, manufac-turers can continue to expand the scope of their PLM program to improvetheir business for years, not just on a one-time implementation basis.The data are also important for those embarking on a PLM implemen-tation. This research should help them recognize that a strategy to getthe basics of PLM in place, achieve an initial ROI, and then build on thatfoundation is a sound approach. Companies sometimes get distractedby trying to do too much too quickly with PLM. Instead, an incrementalapproach provides tangible business value within a short time frame(e.g., a year or two), and then can grow from there.The new research provides great insight into how leading manufac-turers get the most out of their PLM implementations. The findings onbroader scope PLM, along with earlier Tech-Clarity research, are clear: • PLM offers significant top-line and bottom-line business benefits • PLM offers a variety of ways to improve product development performance and continues to expand • Companies that want to gain more business value from PLM should expand the adoption of PLM to more business processes and departments over time • Companies can gain business value from implementing PLM and then expand on that infrastructure to extend their ROI, even expecting higher ROI on subsequent implementations as they leverage their early investmentsAbout PTC Global ServicesThe 1400 professionals at PTC Global Services help the world’s leadingmanufacturing companies gain product and service advantage throughsolution strategy and design, process transformation, technologyconfiguration, and organizational training and adoption. Our in-houseexperts and premium services partners work overtime to ensure thebest possible results and maximum return on investment. Learn more atP TC .c o m /c o n s u l t i n g.For more Insights from the Global Services team, please visitb l o g s .p t c .c o m /c a t e g o r y/s t r a t e g y/. Or scan this code with yourmobile device.About the Author © 2012, Parametric Technology Corporation (PTC). All rights reserved.Jim Brown is the founder and President of indepen- Information concerning the benefits and results obtained by customers using PTC solutions is based upon the particular user’s experience anddent research firm Tech-Clarity. Jim is a recognized testimonial, is furnished for informational use only, and should not beexpert in software solutions for manufacturers, with over 20 years of expe- construed as a guarantee or commitment by PTC. Due to the varyingrience in application software, management consulting, and research. degree of complexity of our customers’ products and/or their design processes, typical or generally expected results are not available. PTC, theHe has broad knowledge on applying Product Lifecycle Management PTC logo and all PTC product names and logos are trademarks or regis-(PLM), social computing, Supply Chain Management (SCM), ERP, compli- tered trademarks of PTC and/or its subsidiaries in the United States and inance, quality, service management, and other enterprise applications to other countries. All other product or company names are property of their respective owners.improve business performance. For more information on Jim and Tech-Clarity, visit w w w.tech-clarity.com. J0456–Broader–Scope–PLM–Insights–EN–0712PTC.com PTC | 3

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