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Key Success Factors for PLM Strategy, Implementation, and Adoption
High Performance PLM:
Data and Analysis from Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
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An international survey of 190 manufacturing companies by Tech-Clarity and PTC Global
Services highlights FOUR KEY SUCCESS FACTORS that dist inguish high
performers in Product Lifecycle Management (PLM) from the rest of the pack:
Strategic business alignment
Process-based solut ion design Reduced customization of PLM software
Comprehensive, role-based learning and adoption
Most executives understand that each of these can be important contributors to PLMsuccess. But the practical reality is that the companies that actually follow these approachesin detail achieve business results far greater than those which take shortcuts in planning,implementation, and adoption.
In fact, the high performers in the survey achieved RESULTS FIVE TO TEN
TIMES GREATERthan the others in the top three business metrics: improving time to
market, increasing product development efficiency, and reducing product cost.
This eBook provides data and key findings from the survey. To learn more about the survey,please see the contact information on page 18.
The Bottom Line
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PLM solut ions have always involved large, complex software implementations and these are never easy
in an enterprise environment. As the scope of PLM programs has grown in recent years, these imple-
mentations often require collaboration across mult iple functions and processes across the organization.
Indeed, according to the analyst firm Gart ner, PLM applications rank among the most vital for
accelerating delivery and supporting new innovative products, and THEY RANK AMONG
THE MOST COMPLEX TO DEPLOY .
Speed vs. Scope
InvestmentTiming
Short- andLong-Term Value
ResourceLimitations
Legacy Processesand Systems
OrganizationalDynamics
The Challenge
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In April 2012, PTC Global Services, the consulting and training arm of PTC, joined forceswith Tech-Clarity, an analyst firm that specializes in product life cycle management, to surveymanufacturing executives in Europe and North America about their experiences with PLM.
The goal of the survey was to understand key success factors in planning, implementing,
and adopting PLM solut ions in complex manufacturing environments.The telephone survey* focused on senior business and IT leaders with current PLM experi-ence, and highlighted four types of quest ions:
Strategy and approach to PLM Challenges Implementation and adoption techniques Results
Survey participants included representatives of a wide range of manufacturing companieswith commercial software-based PLM solutions in place.
* The survey was conducted by ITSMA, an independent research and consulting firm that specializes in IT services and solutions,
on behalf of Tech-Clarity and PTC Global Services.
GlobalServices&Tech-Clarity
About the Survey
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North America Europe
Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
Years with PLM Solution
0-1 Year
1-2 Years2-4 Years
$400-499M
$500-999M
$1B+
4 + Years
Survey
Participants
The survey included 190 senior representatives from aerospace,automotive, consumer product, high tech, indust rial, and othermanufacturing companies. The majority of participants workedon the business side of their organizations, and all participantshad direct experience with PLM solut ions.
Senior Business IT
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Note: Up to three responses allowed.
Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
Business
Objectives
for PLM
Improve product
development efficiency
Reduce product cost
Improve sourcing or
supply chain performance
Improve service
operations or profitability
Increase product innovationDevelop more sustainable/
green products
Improve time to market
Improve product quality
Manufacturing companies today are looking to PLM to support a broad range of business objectives. As PLM has
evolved from its historical roots in product data management inside the engineering department, it has nowbecome a broad-based business program with implications across the organization.
Business Objectives
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Note: Up to three responses allowed.
Source: Tech-Clarity and PTC Global S ervices, PLM Key Success Factors Survey, 2012
Operational
Objectives
for PLM
Automate/streamlinemanual processes
Standardizebusiness processes Integrate development
& execution (PLM & ERP)
Make it easier tofind information
Support distributed/global teams
Provide a single sourceof information
Consolidate ITsystems
Improve externalcommunicationand collaboration
Improve internalcommunicationand collaboration
To support their business objectives, companies are focusing on PLM solutions that can support a broad range of
operational and technical improvements, including automating and standardizing processes, integrating systems,
and improving global collaboration.
Operational Object ives
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Most Companies Have Achieved Their Goals for Operational Improvements
3.9
3.7
3.6
3.5
3.4
Make information
easier to find
Improve internalcommunication
Standardizebusiness processes
Improve supplier/customer collaboration
Support global productdevelopment teams
3.9Consolidate IT
systems Not well Very well
1 5
X
Not well Very well
1 5
X
Not well Very well
1 5
X
Not well Very well
1 5
X
Not well Very well
1 5
X
Not well Very well
1 5
X
Note: M ean rating based on a 5-point scale where 1=not well and 5=very well.
Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
On a purely operational level, survey participants reported that they have done well or very well in achieving their
desired improvements in information management, process automation, and internal communication.
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15%
10%
5%
0%
Overall, However, Companies Have Achieved Only Modest
Improvements in Key Business Metrics
Time to Market Product Development Effici ency Reduced Product Cost
Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
4%3% 2%
When we look at overall business results, however, the story is more mixed. Average percentage improvements in
the top three business metrics are not bad. However, they are not the kind of results that companies often expect
when committ ing large investments to new solutions and new ways of working.
(%
improvement)
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Note: High performers are those companies with the best business results across the top three business objectives.
Source: Tech-Clarity and PTC Global S ervices, PLM Key Success Factors Survey, 2012
15%
10%
5%
0%
High Performers Have Achieved Substantially Greater Results
Time to Market Product Development Effici ency Reduced Product Cost
13.3%
8.9%
1.5% 1.3% 1.1%
5.8%
- Low Performers- High Performers
In the survey, 22% of respondents stood apart
as high performers. The high performers have
achieved substantially greater improvements in
the top business objectives, five to ten times
greater than the result s of the average and
lower performing companies.
(%
improvement)
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* Indicates a statistically significant difference.
Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
Virtue
Patience is a
High performers tend to have more experience with PLM. This is not much of a surprise. PLM is a big change init iative.
It takes t ime to get comfortable with new ways of working, new capabilities, and new systems.
62%
High Performers Low Performers
22%16%
0-2years
2-4years
4+years
24%
39% 37%
0-2years
2-4years
4+years
Years with a PLM Solution*
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* I ndicates a statistically significant difference.
Source: Tech-Clarity and PTC Global S ervices, PLM Key Success Factors Survey, 2012
High Performers Low Performers
High Performers Have a Broader Scope of Implementation
Across Processes and Departments
Number of processes implemented*
High Performers Low Performers
Number of departments using PLM*
5.3 4.5 4.4 3.1
The high performers also tend to have a broader scope of implementation. First, they tend to include more business processes with
their program, such as quality planning.
Second, the high performers tend to involve more functional areas across the business, too. Most companies involve engineering, of
course, and many include manufacturing and supply chain. High performers are also more likely to include the quality organization,
sales and marketing, and/or general management.
Check out Jim Browns blog post on Broader Scope PLM.http://blogs.ptc.com/2012/06/12/broader-scope-plm-yields-greater-business-value/
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Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
High Performers
Low Performers
The Most Significant Differences Relate to HOW CompaniesPlan, Implement, and Adopt PLM
Learning & Adoption
Software Implementation
Solution Design
Strategy and Planning
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Note: Multiple responses allowed. *Indicates a statistically significant difference.
Source: Tech-Clarity and PTC Global S ervices, PLM Key Success Factors Survey, 2012
High Performers Are More Likely to Align Strategy
and Use Detailed Roadmaps and Scorecards
Aligned PLM strategy with business strategy*
Developed executive agreement on value
Created detailed implementation roadmap*
Managed implementation with value scorecard*
Star
t
51%34%
76%36%
49%41%
63%46%(%
ofRespondents)
High PerformersLow Performers
Most program managers understand that program risks increase dramatically if the organization is not wellaligned around the strategy, key objectives, investment requirements, and timeline. But the survey datasuggest strongly that it is the depth and breadth of that alignment and the detail of the planning thatmatter most.
Read Rob Leavitts blog post on 6 Steps to Effective PLM Planning
http://blogs.ptc.com/2012/05/28/slowing-down-to-speed-up-6-steps-to-effective-plm-planning/
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Note: Multiple responses allowed. * Indicates a statistically significant difference.
Source: Tech-Clarity and PTC Global Services, PLM Key Success Factors Survey, 2012
High Performers Prioritize Business Process
Improvement and Use Software to Enable Change
39%
22%22%35%
40%
30%
20%
10%
0%
22%
15%17%
21%
Processes & SoftwareImproved Concurrently*
Processes ImprovedIndependently
Process Improvements Basedon Software Definitions
Software Customized toSupport Existing Processes*
The relationship between process change and software change is always a tricky one with large technology solutions.
The business value comes from changing the way we work, but its usually the software that enables those changes.
The high performers are more likely to focus first on process improvement, and then on application and system change tosupport the improvements. An integrated process is best to make sure that process change doesnt get too far ahead ofsoftware capabilities. Customizing new software to support old processes tends to be the least effective approach.
High PerformersLow Performers
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18% 28%28%
15% 13%
Note: M ean rating based on a 5-point scale where 1=no customization and
5=significant customization.
Source: Tech-Clarity and PTC Global S ervices, PLM Key Success Factors Survey, 2012
High Performers Customize their Software Less
40%
30%
20%
10%
0%
10%
32%
9%
13%
37%
No Customization Significant Customization
High PerformersLow Performers
With all enterprise solutions, the mantra in the marketplace today is off the shelf. We dont want to getbogged down in expensive software customizations that end up costing more, taking longer, and creating
systems that are more expensive to maintain and less flexible for future expansion, integration, and upgrades.
The reality is that most companies are still doing a fair amount of customization but the high performers aredoing a bit less than the others. And because the high performers typically have had their solutions longer, thedata suggest that they have made a greater effort to minimize customization.
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Note: Multiple responses allowed.
* I ndicates a statistically significant difference.
Source: Tech-Clarity and PTC, PLM Key Success Factors Survey, 2012 High PerformersLow Performers
High Performers Take a More Strategic Approach
to Organizational Learning and Adoption
The best designed PLM solutions accomplish little if the users fail to accept the changes and integrate thenew processes and tools into their daily work.
Similar to the up-front strategy and planning, the reality is that many companies under-invest in organizationallearning and adoption. In contrast, the high performers are more likely to take a strategic and morecomprehensive approach, including strategic planning, organization-wide communication, and role-based training.
Strategic plan for training and adopt ion*
Built awareness of need for change
Custom training for different roles*
Training or sandbox test environment*
51
%
19
%
51%31%
59%45%
63%41%(%ofRespondents)
Read Rob Leavitts blog post on 4 Keys to Ensuring PLM Adopt ionhttp://blogs.ptc.com/2012/05/29/4-keys-to-ensuring-plm-adoption/
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Get in Touch!Interested in learning more about the research? Want to talk about the implications for your organization?Have a related experience to share? Please get in touch and let us know. Wed love to talk.
2012, Parametric Technology Corporation ( PTC). All rights reserved. Information described herein is furnished for informational use only, is subject to change
without notice, and should not be construed as a guarantee, commitment, condition or offer by PTC. PTC, the PTC logo, Creo, Pro/ INTRALINK, Windchill, Windchill
PDMLink, Windchill ProjectLink, Pro/ENGINEER and all PTC product names and logos are trademarks or registered trademarks of PTC and/or its subsidiaries in
the United States and in other countries . All other product or company names are property of their respect ive owners . The t iming of any produc t releas e,
including any features or functionality, is subject to change at PTCs discretion.
J0370 - PTC Global Services - Infographic / eBook
For more Insights from the Global
Services team, please visit
blogs.ptc.com/category/strategy/.
Or scan this codewith your mobile device.
Rob Leavitt is Director of Thought Leadership at PTC GlobalServices, the consulting arm of PTC. A long-time advisor totop technology and IT services f irms, Rob works with PTCconsultants, part ners, and customers to advance
understanding of key issues and challenges in productdevelopment, manufacturing, and after-market service.
Contact Rob at: Rob Leavitt, Director of Thought LeadershipPTC Global Services
[email protected]+1-781-370-5719
Twitter.com/PTC_Consulting
About the Author