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.
If you cannot define your own requirements, you should not go out-of-the-box
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.
Over the past 10 years, PLM (Product Lifecycle Management) software solutions for various manufacturing industries 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, have made it difficult to get a PLM initiative to the top of the priority list, despite the ROI these initiatives can expect to generate.
A strategy to activate companies unwilling or unable to pull the trigger on new PLM initiatives was then developed. The largest software providers sought to find ways to reduce the time and cost associated with PLM projects and speed up the realization of value.
The result? The term “out-of-the-box” (OOTB) or “preconfigured” PLM. Now, the attentive reader will note that although the mentioned terms indicate a ready-to-go solution, a “preconfigured” or an “out-of-the-box” PLM solution still needs configuration to fit individual requirements and needs.
The problem: companies are seldom able to define their own requirements and needs. In this article, I will go in-depth with:
- What an OOTB PLM solution really is
- Who OOTB PLM is most suited for (it’s not for everybody)
- How companies define their requirements so they can best leverage a PLM solution to fit their unique needs
Definition of Out-of-the-box PLM
“Out-of-the-box” (OOTB) or “Preconfigured” PLM is being hyped as the cure for the nagging pain of long and expensive implementations.
Not surprisingly, there are different interpretations in the industry of what OOTB truly means.
Some claim that any solution that does not require customization counts as OOTB, even if a significant configuration is required. A more stringent definition of OOTB PLM, and the one we will use here, means that the software is ready to be utilized by a company upon purchase. While some very minimal adjustments may be required to match customer-specific terminology, the concept is that the software has been preconfigured to meet the needs of the typical company based upon the software provider’s prior experiences with its customers.
In theory, given how PLM software has matured over the past 10 years, the lessons learned by the vendors over that timeframe should enable companies to purchase a PLM solution, “plug it in,” and start reaping the benefits.
Of course, it’s not quite that easy. While PLM software vendors are building these pre-configured models, not all vendors have experience in all types of products and industries.
For example, a preconfigured solution for medical device companies would be very different from a solution tailored towards other industries or highly technical engineering to order procedures.
These models would include different product attributes, different complexity in terms of bills of materials, and different expectations of the level of collaboration with supply chain partners.
In other words, not all preconfigured solutions are created equal, and it is important for companies to evaluate which OOTB model is most applicable to their business requirements.
It starts with the ability for companies to know what they need and then be able to define their requirements. Change your mindset! Forget the urge to tailor your business processes to fit the PLM solution. Instead, how should the PLM solution support your business processes?
What happens if I adjust my requirements to the preconfigured solution?
Adopting the OOTB software 100 percent “as-is” means that a company must change its business processes, tools, and templates (e.g., cost sheets, tech packs, or line-review materials) to map exactly how the software has been configured.
Any desired changes to make the software fit more closely to a company’s existing processes require further configuration and/or customization, which defeats the purpose of pursuing an OOTB approach in the first place and adds time and cost to the project.
Additionally, the extremely fast implementation times (i.e., six months or less) touted with OOTB solutions are generally achieved by limiting scope and integration. For example, the software may initially go live without vendor collaboration enabled and without being connected to or sharing data with any other systems.
The value in this approach is that the system gets up and running quickly, users start getting accustomed to it, and the company begins to see some benefits from the best practices it has adopted in a short period of time. However, the downside of this approach is that it then requires subsequent releases of the remaining functionality to fully achieve the expected payback on the system.
Who benefits from OOTB?
New start-ups or smaller, less complex companies with minimal to no current systems are good candidates for a PLM implementation that is closest to the OOTB side of the spectrum. These organizations are best positioned to take advantage of the years of industry best practices that are incorporated into the preconfigured PLM solutions. They are less set in their ways and typically more willing to change their business processes to align with the software. Additionally, the staged approach to introducing functionality helps to improve adoption by users who are likely less accustomed to working with legacy enterprise systems.
With the appropriate starting point identified, following a fully preconfigured model, and quickly realizing value is possible, but it requires an understanding of the caveats and compromises that inherently come with this approach.
While the processes that are built into a preconfigured PLM solution likely involve some changes that would be highly beneficial to any organization, few companies are truly prepared for the level of change required to follow a pure OOTB approach.
Established companies with rigid processes or legacy systems in need of replacement will tend more toward the customization side of the PLM implementation spectrum. This approach enables them to maintain the key differentiating aspects of their business model and reduces the change management requirements of the initiative. Additionally, the longer implementation time can be more easily tolerated as there are already methods and tools in place that have enabled the company to be successful.
OOTB as a starting point
When it comes to PLM software, there is no one-size-fits-all solution. The suitability of an OOTB PLM solution is dependent upon the maturity level of a company’s processes and systems, as well as its tolerance for change. Regardless, preconfigured PLM solutions should always be considered as a starting point. They will likely meet 70 percent to 80 percent of a company’s needs and represent a far better alternative than starting from scratch.
A PLM initiative should begin by fully assessing the OOTB solution and identifying areas where processes can be changed to match the OOTB functionality. Even successful companies that are “set in their ways” can benefit from a process review and insight into the best practices of others within the industry.