PLM Implementation Risks
As with any strategic IT initiative, the potential benefits from PLM are substantial but managing PLM initiatives effectively is vital to success.
While some PLM initiatives add tremendous value to organisations, others fail to deliver the expected benefits and may actually destroy value.
The roots of this failure can often be traced to the very beginnings of the initiative. In this article, we try to capture some of the most common risks and pitfalls involved in planning and introduction of PLM as experienced by AESSiS over the years and that can, if not properly addressed, derail PLM initiatives. These are;
- Disconnect between the PLM initiative & the organisation’s strategy and business challenges.
- Poorly defined PLM implementation roadmap.
- Poor understanding of the total software procurement budget required to deliver the full PLM technology roadmap.
- Difficulty aligning the PLM technology with the process.
- Poor understanding of implementation services costs required to deliver the full PLM technology roadmap.
- Underestimating cultural change factors.
- Underestimating the data migration challenge.
- Inadequate User Methods Development & User Education
Risk 1—Disconnect between the PLM initiative & the organisation’s strategy and business challenges.
It is all too easy for PLM initiatives to become product or technology driven i.e. product features and apparently interesting technologies looking for problems rather than real business issues looking for solutions. This usually happens when the organisation has spent too little time analysing and building consensus around the core PLM related business challenges. When this happens, tangible and measurable business benefits fail to materialise and the PLM initiative loses support and runs out of steam.
To address this risk it is important to involve as broad a range of people as possible in the process of identifying PLM related challenges not only because this usually stimulates better insights into problems but also because it creates higher levels of buy-in and commitment to eventual solutions.
It is also essential to articulate business challenges in simple and non-technical terms first by describing the problem from a number of perspectives (as experienced by people across the organisation) and then by spelling out what the impact of the problem is on the business ideally in broad financial terms. Attention should be paid to any factors that might influence the size of any savings that might be generated by solving a problem, including the sensitivity of the organisation to those factors, so that you can establish credible upper and lower boundaries for any return on investment figures you later produce.
Also don’t waste time going to the nth degree in pursuit of a definitive ROI number. Benefits should certainly be expressed in financial terms. This provides the economic rationale for taking action. But this is not an exact science.
Many benefits are intangible and evidence of them anecdotal (but no less real). Overly ambitious claims of accuracy are rarely credible and can actually undermine acceptance of the need to take action. It’s much better if people (including senior executives) buy-in to a broad brush economic rationale and have a good understanding of the order of financial benefits that could be achieved over time.
Having diagnosed and built consensus around the problems and built a pragmatic business case for taking action, the next challenge is to establish a clear and compelling vision of a better future. It’s all about identifying a point on the horizon to aim for that everyone can see and that everyone understands.
Keep the PLM vision simple and broad brush and ensure any KPIs are things you can easily measure. For example, a good PLM vision statement related to re-use might be “we need a new approach to model our products complexity whilst providing an easy way to reuse design information across our projects in order to reduce material spend by 10%”. Another, related to releasing, might be “we need a better release management approach that fully enables an evolving BOM approach whereby our long lead items can be released for procurement early and well ahead of short lead items to reduce by 90% the incidence of delays in shipping product to customers”.
Risk 2 - Poorly defined PLM implementation roadmap
Essential to connecting the PLM initiative to the organisation’s strategy and its specific challenges is the development of a PLM implementation roadmap. Depending on the complexity and size of the challenge, the roadmap (which may be divided into a number of discrete phases) should identify specific processes that are targeted for improvement (as well as how they should be measurably improved) along a clear timeline.
Sometimes organisations do not spend enough time and effort defining a robust PLM implementation roadmap. The consequences of this may be project scope creep, spiralling & uncontained project costs, damage to the relationship between the client and the software vendor or implementation partner and organisational change problems (see Risk 6) as too much change is pushed out too soon exceeding the ability of the organisation to successfully absorb it.
Risk 3 - Poor understanding of the total software procurement budget required to deliver the full PLM technology roadmap
Closely related to Risk 2 (Poorly defined PLM technology roadmap) is that of understanding the total software procurement costs associated with delivering the PLM technology roadmap.
There are two factors which can push up the cost of software procurement as an initiative progresses.
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