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Research Rap: Smaller Companies Reaping PLM Benefits
August 20, 2008

A quick peek into some research from Aberdeen Group on ... how small to midsize manufacturers are taking advantage of PLM and gaining some nice business-level benefits. The Aberdeen Research points out a combination of both operational and financial performance improvements these smaller companies are achieving with PLM, despite their perceived (and real) roadblocks. The report goes further to discuss the approaches these companies are using to implement and roll out PLM in their businesses, given their smaller size and relatively limited resources.

The Value of PLM for Smaller Companies
Smaller manufactures often take a more simplified view of PLM, but are gaining significantly from their investment. The benefits that smaller companies enjoy from PLM fall into both operational improvements (including fewer change orders and faster design release) with result in business-level benefits that impact the top- and bottom-line.

Specifically, the Aberdeen report indicates that SMBs with PLM:

• Have 22% fewer Engineering Change Orders after design release - this is a strong indicator of design quality and incorporation of customer and downstream needs early in the product lifecycle
• Approve or reject ECOs 54% sooner - this is an indicator of efficient and effective processes across departments
• Release designs to manufacturing 16% faster - a clear indication of more efficient design processes, which results in faster time to market for products, a big competitive advantage

The net result? The Aberdeen report indicates that SMBs with PLM report strong an 18.5% improvement in product profit margins! That is a significant improvement that directly impacts the bottom-line. How many companies wouldn't be interested in benefits like this? How many smaller companies can afford to compete against a competitor that achieves this level of improvement? Not surprisingly, Aberdeen has reported that the use of PLM among SMBs is expected to grow 200% by 2010.

The Value of PLM - Downsized for Easy Consumption
Many of the leading PLM vendors, including Dassault Systemes, PTC, and Siemens PLM have joined mid-size PLM specialists like Arena Solutions, Softech, and Synergis Software in providing offerings tuned to smaller companies. The Aberdeen report highlights a number of obstacles that smaller companies face - or at least perceive - about implementing PLM. These vendors have taken the time to understand and address the obstacles, and have turned some perceived obstacles. The report has an interesting view on the differences between the perceived and actual obstacles that is worth taking a look at.

So that was a quick peek into some recent research on PLM for smaller companies, I hope you found it interesting. Does the research reflect reality? Do you see it differently? Let us know what it looks like from your perspective. Thanks to my friends at Aberdeen for allowing me to share this small peek into their research with you.

Posted by Jim Brown on August 20, 2008 | Comments (0)