The survival and success of a business lies largely in the hands of innovation. To thrive in the competitive landscape presented in today’s industries, companies need their new product development (NPD) process to be effective, agile, economical, and efficient. Product lifecycle management (PLM) is a discipline that helps companies accelerate innovation and further their growth ambitions. Numerous technology vendors have developed solutions to enable these capabilities, supporting better product development at a lower cost and a faster time to market. Speed to market is a key driver for many organizations looking to invest in PLM solutions. First, however, companies need to understand their innovation needs, targets, and expectations to realize the most benefit out of their PLM solution. Below, we offer five considerations for making the most out of a product lifecycle management vendor selection.
Product Lifecycle Management (PLM) Vendor Selection
#1: Identify Key Objectives/Goals
It’s critical from the onset to consider the key objectives a company is looking for from a PLM vendor. Ultimately, what is your overall ambition for innovation within your company? These outcomes should be aligned with the company’s overall goals and enable the innovation strategy in place. One way to bridge those decisions down to selecting a PLM vendor is to consider the KPIs that are critical to your innovation pipeline and translate that into how a PLM system can support it. For example, is speed a critical factor? Or volume of innovations? Who will be involved in the ideation? The market validation? The development? Being able to frame a selection in terms of the way you plan to execute innovation at your business will help to guide the selection and ultimately configuration of a PLM solution.
#2: Clarify Native Functionalities and Intended Core Capabilities
Based on our experience, we’ve seen companies that have long-withstanding PLM solutions in place begin to struggle with “the convenience factor.” Essentially, while the PLM was brought in to accomplish one thing, companies see an opportunity for convenience by having the PLM adopt other roles and tasks that really belong in other source systems, like an ERP. PLM shouldn’t be viewed as a blanket solution for all product issues, and many businesses see failed projects occur due to this expectation. Discussing what the solution will and will not be used for creates baseline expectations for a more specific and detailed request for proposal (RFP) to be crafted with the right vendor.
#3: Incorporate Cross-Functional Representation
It’s widely accepted that cross-functional teams can be a huge asset to any company, with a Harvard Business Review study finding that cross-functional projects with strong support from upper management have a 76% success rate. This high success rate is in large part due to the innovation, flexibility, and diversity that come from the various functional departments of a company. Due to the cross-functional nature of product development as a discipline, these same qualities are important in the PLM vendor selection process. It’s critical to have cross-functional representation from the beginning of the use case all the way to the end of the use case for the PLM solution. Make sure you have an understanding of what areas certain people represent in the process as it relates to the selection – this will provide a better background on the critical requirements and core competencies of the business and increase the likelihood that a PLM solution supports and elevates everything the company needs it to.
#4: Prepare for a new PLM Solution by cleansing data early
As with any technology implementation, proper data management is imperative. As such, data cleansing and preparation should begin as soon as a company begins its search for a PLM vendor and continue throughout the process. Today’s consumer products industry runs on data, and there is a lot of it; if not approached carefully, companies can find themselves underestimating the amount of data they have and the amount of time it will take to prepare it. Starting early will give your company adequate time to organize and cleanse your data for optimal PLM implementation.
#5: Account for Growth and Future Business Evolution
A common mistake in the PLM vendor selection process is evaluating the company only in its current state. Businesses need to account for growth and change at the firm and market level, using these projections to their advantage in the decision-making process. Don’t just think about what you’re doing now, but also consider what you’re planning to do in the future. For example, if your future goal is to increase speed or volume, then what do you need to have in place now to support that? Or, if you’re planning to go from just a few markets to many markets, there are modules and tools in PLM that can support regulatory knowledge and enable you to utilize that knowledge to better plan ahead for future projects.
Clarkston’s Vendor Selection Methodology
A PLM vendor selection isn’t just about the technology itself – it’s about identifying your organization’s larger goals and ambitions, understanding the unique nuances of your business, and then leveraging the right solution – in the least-friction-creating way possible – to achieve those objectives.
Clarkston’s experts are well-versed in all things PLM and offer tailored solutions for vendor selection and advisory. We understand the importance of vendor decisions and are here to help your company make the choice that aligns best with your needs, goals, and values. To learn more about our services, contact us today.
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Contributions from Aaron Messer