EXECUTIVE SUMMARY

Report Highlights

Business use of PLM

Is PLM predominantly used by Engineering functions or is there a wider adoption in organisations?

  • PLM has yet to be adopted more widely in the enterprise, with the main functional use in Engineering departments and information centred around technical product information.
  • The usability of the PLM tools and breadth of information may be limiting its wider adoption in the business.

PLM Value Case

Is the value case behind PLM clear and tangible for many organisations?

  • Most businesses report that the benefits case for PLM is either intangible or the investment was based on a “must do” need.   The focus of the investment is typically cost down, rather than value creation.
  • Flexible subscription licensing models present short-term cost reduction opportunities, the adoption of cloud solutions is still very low.

Organisational Readiness

What is the readiness of organisations to elevate and refine the role of PLM?

  • There is significant resistance to the adoption of PLM in organisations, even if the benefits are understood. This may be driven by the lack of clear business and executive ownership to support the change in the organisation.
  • Most projects are focused on cross-functional process changes. However, the greatest barrier to transformation is reported as modifications to current processes

Value of Information

Are organisations able to extract value from PLM information through insight and analytics?

  • Whilst PLM vendors provide tools to analyse PLM information, few companies utilise them past very basic ad-hoc searches. Reporting and Analytics from PLM is typically via extracts and Excel based reports, potentially leading to data integrity issues.
  • Therefore, not surprisingly few companies have connected PLM to their big data strategy.

Future of PLM

Will PLM and Internet of Things unleash new value potential for organisations?

  • The future of PLM is linked to the Internet of Things (IoT) and the majority of responders aim to connect it to their digital strategy. Yet most companies report their PLM implementation is neither ready for IoT nor there is a near term plan to change.
  • The greatest barriers are reported as clarity of PLM’s role, especially with other enterprise systems. New “buzz-word” terms are causing more confusion.

Business use of PLM

Is PLM predominantly used by Engineering functions or is there a wider adoption in organisations?

The use of PLM in the business is still dominated by Engineering functions, with 59% of responses indicating the main use by engineering functions and 68% stating it was the main storage of technical product information.

The “L” in PLM refers to “Lifecycle”, yet few companies report PLM supporting their business with product information or usage once it has left their manufacturing facilities.  One reason for this restricted use may be the complexity of the PLM tools and the investment in training.  86% of responses indicated PLM was “complex” or difficult to use.

PLM Value Case

Is the value case behind PLM clear and tangible for many organisations?

Over 50% of the responses indicated that the business case behind the investments in PLM are either “intangible” or have been made on a “must do” basis. Clearly this presents organisations with a challenge to demonstrate any tangible ROI on their investment, with 26% reporting their cases were tangible.

The focus of the investments made by the respondents is cost reduction, with efficiency of of process (not IT) being the driver.  26% of the responses also state that their investments in PLM are also focus on supporting new revenue streams, which moves PLM from an efficiency drive to a value creator in organisations.

The traditionally high costs of PLM investments have been historically seen as a barrier to a positive ROI.  60% of the responses state the subscription models for PLM software licensing as a must have or important to remove this software investment of perpetual license models.  Only 6% of respondents state they have implemented cloud solutions to remove the investment costs of infrastructure.  Security has been sighted as the main reason.

Organisational Readiness

What is the readiness of organisations to elevate and refine the role of PLM?

PLM projects typically are transformational in their nature.  41% of companies report their PLM projects are transforming cross-functional processes.  36% of organisations report that to have acceptance of the projects, the benefits needs to be localised within the departments. 23% of respondents report changes to current to processes as creating a high resistance to acceptance.

One challenge to drive the changes from PLM projects is clear functional ownership in the business.  50% of respondents state that PLM has either mixed or no clear functional ownership in the business.  Only 11% report that a functional Executive is accountable PLM.

When then barriers to maximising the benefits from the projects are examined, 88% of respondents state resistance to change as highly impacting benefits realisation.  97% report that having siloed business processes creates barriers to benefits.

Value of Information

Are organisations able to extract value from PLM information through insight and analytics?

Being able to access the information from PLM systems enables companies to create value from it.  62% of survey respondents state that they are unable to access or have to exact information from PLM tools to analyse it.  Only 19% of respondents report using the PLM software vendors tools.  That said, 66% of respondents stated that the vendors did provide tool to access and analyse PLM data, but the complexity of the tool was barrier to their use.

66% of the respondents stated that either no or only basis Key Performance Indicators (KPI) were taken from PLM.  13% of responses took no KPI information from PLM and 29% used basic part data.  It was uncommon for companies to use PLM to measure information such as cost or projects status.

Given the hype around ”Big Data”, 36% of respondents reported their companies not having a formalised strategy in this area and a further 24% did not have PLM connected to it.  Only 15% respondents stated that PLM was connected to their strategy.

Future of PLM

Will PLM and Internet of Things unleash new value potential for organisations?

It is often heard that the future of PLM is the Internet of Things (IoT).  38% of the respondents reporting that PLM was not included in their IOT strategy or would be in the future.  A similar percentage reporting that PLM was included and a key part.

59% of the respondents did state that their current PLM implementation was not ready to support IoT and had no or only long term plans to change.  Only 7% of companies state their PLM implementation was ready to support IoT.

On reason for the lack of adoption of PLM into companies IoT strategies is the clarity of the role in an Enterprise.  84% of responses stated that the lack of clarity of PLM’s role vs. other enterprise systems like ERP was a barrier to enable their IoT initiatives.  Further, 43% stated that new terms associated with PLM enabling IoT (like Digital Twin etc) were creating more confusion.

Conclusions

The legacy use of PLM in Engineering functions and the associated complexities of it use have led to organisations limiting it broader us and the expanding the information that the PLM tools contain. The results show that most organisations struggle to tangibly demonstrate the benefits of PLM.  The main focus of benefits being the increase of efficiencies and cost reduction, rather than creation of new value or revenues.

If PLM is to expand outside of Engineering and have a wider adoption in organisations, it is clear from the results the accountability of the information and tools need to be elevated out of the Engineering or IT departments and into the board room.  It is at executive level that the duplicity of local process protection vs. the scope of cross-functional process change can be addressed and wider benefits be delivered.

Legacy PLM systems contain a wealth for product information which could be critical for the enablement of digital and IoT strategies.  Most organisations have not started to the journeys to connect their PLM environments into this fundamental business shift.  PLM vendors and consultancies still have have some way to go to help companies accelerate its adoption.  The current focus of new technologies and terms is not clear enough for business to embrace.