I recently did an examination of the tradeoffs of using hosted versus on-site PLM systems. The decisions are challenging and there is no particular right or wrong answer but figured it was time to share my findings.
Traditionally PLM systems have been implemented at a manufacturing site with very much a similar business implementation paradigms as used with ERP systems. However, as with CRM and ERP systems, there is an “on-demand” (that is a hosted) option. So which to use? Small emerging businesses have very different decision based issues than the established businesses. So here are some of the issues that the range of companies would need to examine in the decision of what type of deployment to consider (pick on image to see full sized view):
The challenge is to make a decision when a company is sitting near the boundaries of one profile or another. This discussion has not even covered the cost tradeoffs in the selection process – only the business factors that should be weighed in on.
Copyright 2007, LR Hirr, All Rights Reserved
I recieved an email question regarding the chart.
The company size categories are based upon annual sales revenue in millions (so
Comment by plmsavvy — February 6, 2007 @ 11:06 pm |
Hello,
for my opinoin thereare two main criterias:
– the number of PLM-users
–the integration of PLM to other used software
Just the last one can be a k.o.-criteria as you stated by an ERP-system.
There are only restriced technical possibilites to interface ERP to an hosted PLM
systems
Comment by basedow — February 7, 2007 @ 12:12 am |
I agree, however the reason I based this analysis on the revenue rather than the number of users – is that the % of employees using PLM is yet another indicator of it’s effectiveness. I’ve seen companies with in excess of 50% of the employees using PLM as their primary information source while less than 10% would use the ERP system. I consider that to be a PLM success, yet often when implementing PLM management views it as a limited impact system with a small number of planned users – and by limiting the usage they limit the success.
With regards to the integrations. The chart is only a high level view. Most companies would need to really begin their assessment with the factors listed in mind – but you are right the nature of the integrations needed may KO a hosted system as an alternative, but again it depends upon the complexity of the integration needed. A one-way change based transaction to the ERP system may be enough for most of the smaller companies that would be considering a hosted offering.
Comment by plmsavvy — February 7, 2007 @ 12:12 pm |