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Are PLM selection processes just cover-your-ass exercises?

When the phrase “Nobody ever got fired for buying IBM” was coined, it was at a time where IT software and services from IBM equaled reliability. That IBM was the only safe bet, and whenever employees were entrusted with finding the best software or IT consultancy for their company, and they chose IBM, they would be certain that this choice would shield them from repercussions.

Today, when I look at how PLM software is chosen, I cannot help but think that the phrase is still being used. It seems to me that companies are choosing PLM software based on the vendor’s perceived reputation as a “safe bet” and not from a technological point of view.

 

Who cares about the best piece of technology to fit with individual business challenges? Who cares about asking the vendor the hard questions about their software product?

 

If the person in charge of the selection can demonstrate sound due diligence skills in front of his or her management, it seems that everything will be ok.

But there is no such thing as a safe bet when choosing PLM software. The technology alone will not make your investment. We all know that. But very few of us live by it.

10-10-100 formula still applies

The failure rate of PLM implementations is still at a high rate and it seems like the 10-10-100 formula still applies. 10 percent of the desired functionality is achieved, 10 percent of the expected users are connected to the system, and 100 percent of the planned budget is already consumed.

That formula naturally leads to budget overruns, frustrated implementation teams and ultimately, another failed PLM initiative.

This is a systematic problem that companies should address. Because choosing a PLM system out of reputation and not from a best-fit technology perspective is a cover-your-ass-move, not only from the responsible person, but also the company looking for the solution.

Start asking the right questions

What people in charge of selection processes and their companies fail to realize is how important it is to ask the right questions, like:

  • Have you looked inwards and analyzed the current PLM needs and the future PLM needs in your company?
  • Do you really need out of the box-capabilities? Will those out of the box-capabilities still be relevant in 5 years? Or even after the Phase 1 implementation?
  • Most importantly, is the system under review able to change and adapt to future needs?

Remember, the greatest cost with a PLM system is not the total cost of purchase but the total cost of implementation. You may want out-of-the-box capabilities but the system rarely works out-of-the-box. Already after the first implementation phase, you discover that your workflow is a bit different from the original requirements, and you need to request changes to the platform.

When PLM vendors are “guiding” companies in creating technology requirements and recommendations to aid them in their PLM selection process, they also create an opportunity for individual employees at the PLM-seeking company to wash their hands and denounce any responsibility of a potential bad choice.

But is this approach really in the best interest of the PLM-seeking company? The employees? From where I stand, it seems like there is only one winner. The PLM vendor.

Are we about to see a change?

In general, cover your ass moves has been everywhere in PLM selection processes. And so far, nothing has been done about it except saying “Oh well, that’s the way of the world!”

That, my friends, is terrifying.

With the high PLM implementation failure rate in mind, are we about to see a change? You are not able to predict your company workflow in 5 years so why choose a system that only serves your current workflow. You need a system that is able to change and adapt to workflow changes.

My question to you is; If we are to continue doing these PLM selection processes; will you continue to cover your own ass?

PS: I am currently working on a whitepaper on how I think the PLM selection process should be like. It will be published by November 1st and if you are interested in my view on how a selection process should be like, sign up in the comments below by saying “yes, please”.

About the author

Leon Lauritsen

Leon has worked with multiple IT systems from ERP to BI and PLM. His experience ranges all the way from programming to business consulting, project management and business development. Leon started his career in IT development and has further earned a diploma in IT and Economics at Copenhagen Business School and an Executive MBA at Henley Management College.  

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