When we look at the progression of enterprise IT, Product Lifecycle Management (PLM) technology continues to expand and overlap into adjacent areas of enterprise application functionality. Although most manufacturers’ IT environments include elements of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), and PLM, the boundaries between these traditional areas of IT responsibility are becoming increasingly blurred and sometimes even impossible to identify at all.
In fact, in their efforts to grow their businesses, the vendors of the various enterprise applications are continuously increasing the scope and functionality of their applications. The inevitable result is that the applications now addressing ERP, SCM, CRM, and PLM have the potential to overlap more and more. At the moment, the application area with the most expansionist ambitions seems to be PLM.
For most of its life, even though it has been able to support the product lifecycle from design to retirement for some time, PLM technology has been seen as the domain of the technologists within an organization -- the product developers, manufacturing engineers, and maintenance staff. Given its origins as a tool for managing CAD data mainly in the design process, that way of thinking is understandable.
One vendor that’s articulating a new grand ambition for PLM is Oracle. It’s extending the company’s application to “Product Value Chain Management.” A key aspect of this proposition is to extend the reach of PLM at the front end of the overall product lifecycle (that is, into the initial innovation process).
We know the importance of continuous investment in a stream of innovative products to maintain sustainable product differentiation. PLM has been effective in speeding the development of products in a controlled environment. But the initial idea creation (a term which seems to be collapsed these days into "ideation") requires a combination of support for free-flowing interaction and the ability to select winning options based on informed decision-making. One aspect of this process is the ability to understand what the customers want and think they need, but it shouldn’t be limited to this.
There’s a quote usually attributed to Henry Ford that goes something like, “If I had asked my customers what they wanted in the next generation of cars, they would have asked for faster horses.” A grasp of the target business that enables potential is something that needs to be anticipated. For manufacturers in multi-product, multi-industry businesses, the combination of customers’ articulated needs and potential additional opportunities leads to a huge range of potential development projects.
PLM can be defined as the exploitation of cloud-based technologies and Web-based development tools to drive “democratization” of enterprise applications. One trend in that space also has an impact here in terms of opening up the ideation phase to a wider community. The adoption of social networking technologies into the PLM workflow is an accelerating factor. So, before the design effort starts in earnest -- that being the classic starting point for PLM -- there’s a major exercise in the selection of the projects to pursue.
A Forbes 2010 research study showed that, while CEOs see innovation as the primary factor in driving growth, only about a third think that their innovation execution processes are effective. Or as a Booz and Company 2012 industry survey put it, “coming up with new ideas is not as big a problem as selecting and converting them to development projects.” This is where Oracle sees the opportunity for extending PLM into the pre-design arena: building into PLM the means of assessing and evaluating ideas for taking forward into development projects.
The technology push designed to deliver ever-improving price/performance is only part of the innovation. Creating and managing requirements, and understanding the downstream implications, require information and co-operation in the industry network throughout the product lifecycle as much as in the R&D department. Effective analytics capabilities that allow all aspects of product operating experience and performance to be captured and considered will be a vital input in the ideation to project selection process.
This broader view of the application of PLM is gaining ground. Like Oracle, SAP is presenting the ambition for PLM to support the entire product lifecycle, beginning with idea selection in its Idea to Delivery concept. The traditional PLM suppliers, such as Dassault Systemes, PTC, and Siemens, are rapidly extending their PLM capabilities to address the more open-ended nature of the early ideas stage of the lifecycle. The growing importance of PLM as an enterprise application means that the overlap issues are becoming very interesting.
Tony Christian is a director at market research, analyst, and consultancy group Cambashi.