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.
Top 3 reasons why your PLM project is certain to fail before it has started
Many PLM projects share a set of characteristics, all proven to be clear signs that the project will not be the success it has been set out to achieve.
During the last 15 years, PLM (Product Lifecycle Management) software solutions have matured significantly and have been proven to drive substantial benefits.
However, the need to devote substantial time and resources, coupled with the financial investment required for successful implementations, has not made its way into many companies where they too often believe in shortcut solutions and taking the nice easy way forward.
During the hundreds of PLM projects and selection processes, we have been involved in throughout the years, we have identified three common reasons why projects fail before they have begun. Here they are:
- Lack of knowledge of your own critical requirements
- Believing that the software vendor will solve your problems
- Top Management
Lack of knowledge of your own critical requirements
The scope of a PLM solution and the required functionalities varies a great deal from company to company. In fact, even within the same company, you will often find conflicting functionality needs and requirements which the latest book from John Stark (called “Products 2019”) is a very good example of. Highly recommended read!
Because of highly individual – and often conflicting needs - there is no one-size-fits-all solution. That is why companies are required to know their own critical requirements when selecting a system. Otherwise, they will not know what they really need.
Unfortunately, we have seen so many companies rely on the software vendor’s experience and “best practice” solutions. These are drawn from the vendor’s experience of providing a technical solution to industry challenges. In other words, it is an external interpretation of a challenge. The vendor will claim they have what it takes - a “best practice” solution - but be aware that it is still their interpretation.
Several companies do not spend the time understanding what their own best practices are, which is the main reason why PLM projects fail.
If you do not know your company’s best practices or core competencies you need the PLM solution to support, how can you implement or even pick a solution?
If you choose a solution with a set of “best practice” functionalities without knowing your own critical requirements or workflows, then how would you know whether these functionalities are supporting your business well enough?
So, dear reader. Know what you need. As in most life situations, this simple rule is also applicable when evaluating PLM solutions. Unfortunately, many executives seem to forget that fact or just want to take the easy route.
Believing the software vendor will solve your problems
This may sound naive, but companies who do not know which critical software requirements they should forward to the software vendor, are putting too much faith and trust into the expertise of the software vendor.
We have seen this for start-up companies as well as established enterprises; a lack of clear processes to support the core competencies in the company. In every case, that leads to an unhealthy amount of dependency on the software vendor’s past experiences and “best practice” solutions towards your industry.
Most vendors know this, and often take the lead by serving “best practice” processes inside their respective solutions as a solution to unclear processes.
Unfortunately, in many cases, as users get to know the system, they may find that functionality has been oversold. Functions they really need may not exist or may only be partially implemented. And necessary customization may be too difficult, too time-consuming, or too costly to implement.
As time goes on, it may become clear that the wrong vendor was chosen. New versions may be delivered late, lack promised functionality, and have quality problems. Maintenance and upgrade costs may become unacceptably high as customization are needed to support the business and due to that new version can’t be adopted easily.
Again, I recommend that you have a clear overview of your business-critical processes and how they should be specifically supported by a software solution.
Top management may be a source of problems for reasons such as lack of commitment, lack of leadership, lack of support, and lack of patience. The biggest problem with this is that top managers should be among the leading supporters of PLM since they will benefit greatly from its success.
However, top managers most likely have many other things on their agenda and the complexities are often not that well understood across people in the management team or amongst board members. As a result, they don’t fully understand why all that time should be spent and expects that you can “just” buy a solution to fix the problems in the company which will be relatively easy to implement.
This misalignment in expectations at both top management and board level that PLM is a quick-fix solution is often the reason why PLM within companies never fulfills its entire potential.
As your business constantly evolves, so do the requirements and changes to the PLM system to be able to continue supporting your business processes.
A PLM initiative is a continuous journey that evolves over time and therefore requires a long-term commitment from all stakeholders, especially top management, and the board.
PLM is not simple. It is not like building an ERP system with streamlined debit and credit functionality. Product lifecycle management is an extensive and complex subject where you can apply different views. You can focus on PLM as a business approach, concentrating on process and activities, or you can focus on the IT system, its architecture and implementation.
A PLM initiative should begin by fully assessing your company’s core competencies and identify areas where processes can be supported and improved by functionalities in the system - and not just changed to fit the software solution.
My recommendation is to take matters into your own hands and make sure that:
- 1. Know everything there is to know about the core competencies within your company and how a PLM software solution should support and elevate it.
- 2. Obtain enough information about what a PLM software solution should be able to help your company with. Do not become too dependent on the vendor’s knowledge and experience as it might not be to your advantage.
- 3. Prepare your top management and make them realize the importance of having a PLM system on top of their priority list and what it takes from them to make it a success.