The quantitative and qualitative benefits of PLM projects

Clarify expected benefits at an early stage, estimate costs realistically

**A PLM project brings about a noticeable change in the organization and can also lead to a drop in performance in the short term. It is therefore crucial for success that all key project participants and management are able to contribute their requirements, recognize the benefits and fully support the PLM project once it has been approved.

At the start of a PLM project, it is important to reconcile the very different and sometimes conflicting ideas and wishes within the company. The CEO demands an increase in efficiency, the CFO is primarily interested in reducing costs, Engineering wants an efficient data management solution, Production wants to integrate a new CNC machine, and so on.

The challenge is to define a project from the many requirements that is supported by all relevant stakeholders. In addition, even before the project begins, you should consider which relevant, reliable and evaluable parameters can be used to demonstrate the "before and after situation" after the PLM project has been completed or to calculate an increase in efficiency.

The three phases of a PLM project: preparation, implementation, stabilization

1 Preparation phase

In the preparation phase, the aim is to motivate the PLM project in line with the respective situation or organizational form with a qualitative or quantitative benefit argumentation and to achieve project approval. The key question is: Does the organization want to become active at all and if so, what benefits are being sought? It is absolutely crucial for the success of the project that the PLM project is well anchored in the entire organization and that all stakeholders, especially management, are "on board".

Qualitative motivation

• Demonstrate the benefits of the project (time savings, error reduction, increase in data quality, achievement of strategic business goals, etc.)
• Highlight the risks of "doing nothing" (rising costs, reduced competitiveness, reduced attractiveness as an employer, etc.)
• Thinking outside the box (making comparisons with competitors/customers)

Quantitative motivation

The use case method or the comparison method is used in the quantitative motivation of PLM projects. The use case method is based on effective company values and is therefore quite accurate, but also time-consuming to implement. The comparison method does not allow absolutely precise statements to be made, but the effort involved is correspondingly lower.

Use case method

• Collection of real use cases and estimation of current time requirements
• Estimate savings potential with "new environment"
• Determination of benefits per user/area/project
• Calculation of NPV/IRR/break-even

Comparison method

• Use similar projects as a comparison and adapt to your own situation if necessary

2 Implementation phase

In the implementation phase, the benefits discussion should be concluded - all project participants and management must be behind the initiative. The key question during implementation, on the other hand, is whether the project is on track. Is everything on time, in budget, in quality, and in scope? Project progress can be measured and documented using agile tools and methods or the waterfall method.

3 Stabilization phase

Once the PLM project has been completed, it is measured whether the benefits defined in the preparation phase have actually materialized. During the so-called "hyper care phase", it is also important to determine how many open issues arise, how many new bugs and cases are created, and how quickly these can be processed. The so-called "long runners" - i.e. issues that repeatedly arise after the introduction of a new project and lead to errors - must also be identified, addressed, and resolved.

PLM Open Hour

Quantitative and qualitative benefits of PLM projects

PLM projects are usually complex and place a considerable financial and human resource burden on companies. For this reason, decision-makers in top management are often faced with the question of their concrete benefits and strategic importance. Above all, organisations without dedicated PLM representation in management find it difficult to make an objective assessment. They tend to evaluate PLM projects purely on the basis of traditional key performance indicators (KPIs).

In this PLM Open Hour, we have scrutinised this area of tension between project and management and shown ways in which you can evaluate PLM projects quantitatively and qualitatively in order to obtain the necessary management support.

Click through the presentation here (in German):

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