Before going ahead with a PLM Strategy, you need to be aware of all the costs involved, including the hidden ones. So, what can you expect the Total Cost of PLM to be? Well one thing’s for sure, the total cost is probably going to be more than what is often stated by the marketing department of PLM Suppliers who state that their solution offers the ‘Lowest Cost of Ownership’.
PLM is a significant business investment
What is essential for you to understand is just how much of an investment it will be. To get to know this, you must gain a clear understanding of the following important cost factors of owning a PLM solution. I would recommend that you define a three-year cost of ownership plan to highlight the hidden costs. Here are a few guidelines on what should be included:
• Map the ‘As-Is’ and ‘To-Be’ processes.
• Define the ROI (Return On Investment) objectives.
• Complete a PLM solution search using a ‘company-specific’ RFI (Request For Information).
• Create an implementation plan.
• Define the number of users across the Supply-Chain.
• Define the PLM Modules & Software Licensing requirements for now and the future.
• Establish Infrastructure costs including hardware (develop and production) and communications.
• Scope out integration to third-party solutions within the business.
• Plan for PLM training across the Supply-Chain.
• Avoid, if possible, the cost of customisation.
• Unclear third-party software licensing costs.
• Consider the costs of Support and Upgrades for the next three years.
The above list is only a high level listing of what you need to cover, but it is critical that you do your homework when costing to ensure that you have uncovered any potential obstacles that you’re going to encounter during the PLM implementation.
Keep in mind that if you’re not certain about the tasks, then ask an expert to help you through the maze as doing it wrong could cost your business millions of dollars!
Contact me
Please free to share your experience in assessing and selecting a PLM solution. Email me at mark@whichplm.com I look forward to your feedback.
Mark
Mark Harrop is a leading Apparel PLM expert with more than 34 years experience in the industry. Mark co-founded the Product Development Partnership Ltd, the team of experts behind WhichPLM.
