A quick peek into some research on ... using configuration solutions to customize products comes from Aberdeen's Michelle Boucher as a follow up to her Tailoring Products to Customer Preference benchmark. The follow up research shows that the use of configuration solutions helps to improve profit margins. I'll provide a bit of the research here, but then pose a question. Should configurators be a part of PLM? ERP? Or in some cases, CRM? You will see, I have an opinion.

Different Types of Configurators
The Aberdeen report segments configurators into three categories:

• Sales Configurator - to enable pricing and the creation of quotes and orders
• Product Configurator - to define compatibility rules and configure the product (typically a bill of material, CAD model, and drawings)
• Manufacturing Configurator - to define manufacturing processes, scheduling, and resource allocation

Clearly, there is overlap in the needs for these solutions, and a typical customized order will go through each of the processes identified above. The research first shows that the use of configurators helps drive improved profits. What is more interesting is that those companies that have integrated their configurators are showing even higher levels of profit. Speed and reduction of errors are specifically mentioned in the report. In addition to that, I have to imagine that the ability to more accurately predict product costs allows companies to safely quote more aggressively (yet confidently) and win more profitable orders. But that is my speculation.

Who Should Provide Your Configurator?
Speaking of speculation, what does this mean for the market for configurators? Where should companies look to buy one? The process is clearly tied to sales, so ERP and/or CRM make sense from that perspective. And most ERP companies do offer (at least one, if not more) configuration solutions. Some CRM companies do as well. But what about PLM? Isn't PLM the natural home for this? As more commercially-oriented product data is defined and managed in PLM, shouldn't the processes for defining the configuration be managed there as well? And for that matter, shouldn't they be a part of the same review/approval/versioning process as the rest of the product data? This may be one person's opinion, but to me PLM is the most natural home for these solutions. Yes, they must be integrated to orders, but as PLM continues to become the system of record for product data (some really interesting preliminary result are coming out of our "Integrating the PLM Ecosystem" benchmark on this, by the way) then configuration definition, at a minimum, should be kept in PLM. Perhaps PLM execution is a web service called by ERP? Before you call me an idiot (too late?) I recognize probably can't be the full answer. Executing on configured product has deep tentacles into the rest of the product execution process (which for the most part, is in ERP). So what's the answer? The research says integrated configurators. I suggest integrated PLM-ERP solutions that treat configuration like the rest of the product data. Define and manage it in PLM, execute it in ERP. But don't forget that you still need to integrate it to CAD... but that's for a different time...

So that was a quick peek into some recent research on customizing products, 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.