I’ve been in the PLM business for more than 20 years. A lot has changed in that time, like the fact that we call it PLM now. But one thing that has not changed is that customers are always surprised by the cost. Even now, after Aras has eliminated PLM license fees.
Why is that?
PLM is similar in complexity to ERP and should be approached as such. Both are strategic business systems on which companies are run, focusing on different aspects of the enterprise. And in many ways, I believe PLM is more complex than ERP.
For example, PLM is focused on the entire lifecycle of each and every product a company produces. It helps you determine what you’re going to make, how to make it, etc. ERP helps you execute the process efficiently. PLM involves the full product structure and lifecycle. ERP focuses on the financials and procurement. PLM exists in a fluid state of change and adapts as needed, while EPR is fairly rigid and pretty much steady state. PLM manages a wide range of data, metadata, documents and other information in a variety of formats – structured and unstructured – and is process oriented, while ERP is all about transactions and materials.
Yet companies consistently budget and spend 10x more on ERP than PLM.
I believe the reason for this is that many CIOs still think of PLM as a software application used by the folks in engineering to manage their CAD drawings. Done right, PLM is much more than that. Today’s PLM solution is an integral part of the modern day enterprise that touches thousands, and sometimes tens of thousands, of users across the company and throughout the extended supply chain.
The real value of PLM is in making better business decisions, developing innovative quality products, managing information confidently, and knowing you can respond to, and capitalize on, ever-changing marketing conditions.
If more CIOs got involved in PLM initiatives they’d see the benefits and the potential, they’d start thinking about PLM as the strategic business solution it is, and their PLM ROI would really take off.