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4 Success Factors for PLM Adoption

Times are tough. Virtually every industry is dealing with rapidly evolving technology, globalization, increased competition, tightening regulations and changing market conditions. This means to be successful developing and managing products today you need to find new ways to increase revenue, speed the pace of innovation and mitigate risk all while staying agile and quality-focused. Product lifecycle management (PLM) is the best way to gain control over the full scope of the lifecycle and offers tremendous business benefits from faster times to market and increased profitability to higher product quality and streamlined regulatory compliance.

Yet, despite its benefits, PLM is a term that can make many product managers and businesses shudder. And for good reason. That’s because many PLM solutions have gained a reputation for being costly, complex and difficult to integrate with existing processes. So, why do these PLM solutions, which should be making things easier, often do just the opposite?

To help, we have identified 4 factors that distinguish successful PLM adopters from those that fail.

1. Vision beyond engineering

PLM initially started as a way to expand the value of development data by incorporating additional information such as BOMs into a software program. The fact is, when most organizations tackle product lifecycle management, they begin by making improvements to the engineering function of their business including managing CAD files and orchestrating mechanical design processes.

But the promise of PLM offers a much higher, strategic value. As the definition of PLM has expanded in recent years in response to the increase in product complexity, PLM has become a complete strategic approach that integrates and manages people, data, processes and business systems to promote cross-functional collaboration across the entire organization. The companies that are successful incorporate PLM’s scope across a higher number of processes and departments, viewing it as a business transformation, not just a technology implementation.

2. Corporate culture

Most companies think they can adopt a piece of PLM software and assume that will manage the interpersonal relationships, politics and inherent tradeoffs in the product development process. It won’t. PLM is a strategic approach that much be supported by organizational culture. Then and only then can you accelerate that process with software.

Successful PLM implementation and adoption will impact many facets of your business:

  • Organizational structure and roles
  • Business processes
  • Required data
  • Data creation and maintenance
  • Organizational cross-functional collaboration
  • Measurement and metrics

In short, PLM influences “how things are done” in the organization. And these changes aren’t going to happen overnight. As the scope of PLM expands to include cross-functional and collaborative business processes, the need to address cultural change grows. Technology alone won’t be able to help – successful adoption of PLM requires an internal culture shift to build new cross-functional, collaborative teams to work together across the product lifecycle.

3. Make it your strategy

The statistics for new products today are shocking. Three out of four products never make it to market and out of those that do, nine out of 10 fail to deliver a positive return. From this we can conclude that there are two major areas of product failure: Failure to reach the market at all (internal processes and culture which we talked about above) and failure to deliver ROIC once on the market. Successful PLM must address BOTH of these.

We have talked before about how PLM is first and foremost a strategy. Your strategy doesn’t end when your product reaches the market. All too often, companies spend millions of dollars supporting products and product features that over time have little or no business value and therefore, fail to deliver ROI. The opportunity you have in the later stages of the product lifecycle is to leverage market and competitive pressures to plan for incremental product improvements. These smaller changes can help you improve both top and bottom line performance later in the lifecycle when your product margins are highest.

4. Choosing the right PLM provider

More and more organizations require the need to better respond to changing market conditions, incorporate digital connectivity, accelerate the pace of innovation and provide more custom products and services. This is the new competitive reality of virtually every industry and it’s apparent that companies need help. Even more than that, they need an extension of their company and PLM is the framework to do that.

Finding a list of PLM providers isn’t hard, but finding the right one for your company can be. Your chosen partner should know your industry and demonstrate best practices that suit your company’s specific needs. For example, an organization that focuses on industrial machinery isn’t going to be well-versed in evolving medical device regulations. Look for a partner with a proven history of successful PLM implementation and that offers guidance in product development strategy as well as business analysis expertise.

Today, it takes a comprehensive, strategic approach to manage the growing complexity of the product lifecycle. And now more than ever, there is a huge opportunity and need for effective product lifecycle management to streamline the product development process to maximize value and drive long-term growth. The only catch is, you have to do it right.

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