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The Dollar Value of PLM

Enterprise-wide PLM is a major financial investment for a company, and it needs to be very clear to everybody why the investment is being made.

For many years PLM has been regarded as 'unquantifiable', but there is now a simple and powerful message that justifies the PLM spend:-

 

"Implementing PLM improves the business bottom line, and we can prove it."

 

How Can We Prove It?

The PLMIG has developed an extensive Toolset that can establish comprehensive, accurate financial metrics for PLM. This means that PLM Benefits can be quantified, and the value of PLM to the business can be proven in dollar terms.

The Toolset is based around the PLM Project Justification Handbook.  Its methodology is clear and accurate, so that everyone can see how the figures will be generated.

Importance for the USA

Quantifying the Benefits of PLM is important everywhere in the world, but the features of the Project Justification Handbook make it particularly adaptable for the USA.

 

  PLM USA  

The methodology is concise and direct, and this clarity resonates with the stakeholders from around the company who may be asked to give of their time.

The outputs are clear, and everyone can see the results that will come from their efforts.

 

 

The Handbook leverages the standard set of documentation that would be required for any capital expenditure or project justification, and so the overhead of work required to prepare the PLM justification is kept to a minimum.

See more about the Project Justification Handbook >>>

PLM vs. ERP

One issue that is perhaps more prevalent in the United States is that PLM often seems to be competing for funds with much larger ERP projects.  ERP is seen as easier to justify because of PLM's "qualitative" nature, and because ERP "saves real dollars".

The PLM Project Justification Handbook changes this.  Now PLM saves real dollars, and makes real dollars in improvements and opportunities.

Quantifying New Benefits

Until now, PLM metrics have been restricted to narrow measures such as Engineering Change Cycle Time or Reduction in Headcount, because that is all that could be quantified.

As one PLM Manager said: "[What we would like to impact with PLM] is pretty broad, from business and technical strategies for integrating design, manufacturing, and marketing capability segments; PLM vs ERP; bridging legacy solutions and next generation PLM solutions; product classification strategies, lifecycle and ECO controls; supporting early design cycles and ideation, etc."

Now, all of these can be quantified using the Handbook.  This naturally extends the scope of PLM, creating new opportunities for improvement, as well as new ways of measuring and adding value from a product perspective.

Single Approach

Large corporations may make several acquisitions each year, and with each one comes a new legacy PLM environment, and different ways of working.  The PLM Project Justification Handbook methodology is unaffected by this, and its straightforward approach can be applied across the entire enterprise.

Prove PLM Performance

The Handbook covers the technical issues, management issues, the Analysis and Metrics Algorithms, and a complete flowcharted process from Scoping through to Monitoring & Reporting.

It comes as a set with 4 templates for the PLM Team to work with, and 3 instruction documents:-

  PLM Financial Primer - essential reading: explains the high-level principles to everyone in the company
  CEO Briefing Document - explains PLM to senior managers who are unfamiliar with the concept
  Path to PLM - the PLMIG methodology, that acts as a cross-reference for project planning

Get the Handbook

The full PLM Project Justification toolset is provided as part of PLMIG Membership.  It can also be purchased directly from the Store.

All documents are supplied in Word format so that users are able to modify and adapt them as desired, as specified in the Terms and Conditions.

For more information about the Project Justification Toolset and how to apply it, contact .


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