PLM: The Nervous System of a Company

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PLM is not a new concept. It has expanded well beyond the industries where it started.  A question that we at Integware continue to hear from most companies, and in particular the visionaries within companies new to product lifecycle management, is “how do I show the business value of product lifecycle management?”

This is not an easy question to answer.  Product lifecycle management is so large and impacts all aspects of an organization that defining its business value can be at a minimum very difficult and at the most very ambiguous.  This is because the benefits are not direct or have already been claimed by other process improvement initiatives.  Does this mean that the previous initiatives overinflated their potential business value or that PLM not create its own?  I am a strong believer that without product lifecycle management organizations that develop and manufacture products will never be able to fully achieve their full business value.  I am not looking at product lifecycle management here from a technology perspective, which is the traditional approach, but from an enterprise process perspective.  Having worked in the Life Sciences industry most my working life, I cannot help but compare product lifecycle management to the nervous system of the body.  As the nervous system, product lifecycle management touches all aspects of the organization, from research, to development, to manufacturing.  So for those daring enough to calculate the business value of product lifecycle management, the issue is often not how do I estimate its value.  The problem more often than not is how I make my business value estimates believable.  The estimated benefits end up being so big, that they have become unbelievable.

Like the nervous system, product lifecycle management performs three basic functions:

1. Receiving/creating product knowledge information
2. Integrating product knowledge
3. Responding to changes

Now how do I relate this to benefit categories?  At the highest level, I translate it to the following three:

1. Automation
2. Standardization
3. Integration

Using these three high level benefit categories, I can now start to identify and breakdown the benefits and put boundaries around how I can calculate them when estimating business values.  I will take a look at each of these categories in more detail in later postings. 

Graciella Beyers, PLM Strategy Practice Manager