Apr 22 The Changing PLM User Landscape

Product lifecycle management (PLM) originated decades ago in the discrete manufacturing area, and for quite a long period of time remained mainly as a solution for the upscale market in industries such as aerospace and automotive. However, recently PLM has become more approachable for smaller-sized businesses in more industries. It is not difficult to have this impression when you see increasing versions of PLM solutions targeting small and medium business (SMB) and mushrooming solutions such as PLM for consumer packaged goods (CPG), PLM for fashion, PLM for retail, and so on.

On the user side, based on statistics from TEC’s PLM Evaluation Center, it seems that users are willing to take the same direction – compared with 2007, more smaller-sized business users are considering PLM in 2008. At the same time, more potential users are from industries that traditional PLM doesn’t fit well.

Every day, various users come to TEC’s Evaluation Centers seeking information to support their software selection. Each year, in the PLM Evaluation Center, there are thousands of organizations submitting information about their PLM initiatives and receiving selection suggestions. Analyzing these PLM initiatives leads to many interesting findings. “The PLM user landscape is changing” is one of them. I’ll explain two factors that are highly related to the changes in the PLM field I mentioned above.

The Share of Small Business Users Is Increasing

The number of employees is chosen to represent the size of the business recorded in the PLM Evaluation Center. Although all categories have positive count changes (figure 1), the first category – “fewer than 200 employees” occupies almost a half of the whole, and its 5 percent share growth (figure 2) shows that small organizations (those with fewer than 200 employees) are significantly increasing their considerations of PLM.

Fugure 1: Year-over-year initiative count change.

Figure 2: Shares of number of employees

More PLM Initiatives Come from ‘Unlikely’ Industries

Although the main industries in 2007 remain in the same positions in 2008, most of them show share decreases (figure 3). In total, the top 5 industries account for 39.9 percent of initiatives from all industries in 2007 and 38.1 percent in 2008. The 1.8 percent decrease seems small but considering that the sample sizes are several thousands per year, I feel that it represents a trend.

Figure 3: Shares of the top 5 industries

On the other hand, some industries that are seemingly unlikely to adopt PLM show increasing interests in this methodology (figure 4). Although service providers, financial institutions, and real estate all occupy small slices of the whole pie, their share increases are significant. I wonder whether users from these ‘unlikely’ industries will be able to find suitable PLM solutions to meet their business requirements at the moment. At least these users show the needs of managing the lifecycle of their products, which may not have a traditional bill of materials (BOM) structure, or even not be tangible goods.

Figure 4: Shares of the fastest growing industries

Conclusion

So, it is not just an impression that PLM is getting more popular in the SMB sector and in more industries. It is also a trend indicated by statistics from the organizations who are considering PLM. Actually, there is a lot more we can do with the data from TEC’s various Evaluation Centers. Currently, a study is underway to examine users’ business objectives and functionality requirements of their PLM implementations based on further verified PLM initiative information from the PLM Evaluation Center. I hope you will enjoy the forthcoming reports on this study.