This will be the first of a series of articles where we would like to start with the ideas behind the “measure everything” tip. While this is good advice, it is not always clear what you should measure, how you should measure or necessarily why you should measure.
In this series we will begin to explore these areas, but I suspect as we explore the topics, like an onion, we will find more layers. Quantifying the impact of any process initiative is important. It helps you understand how successful you have been and gives you direction for future improvements. Product Lifecycle Management (PLM) can be very difficult to validate and requires a lot of forethought to be able to accurately quantify impact. Each PLM implementation, just like the companies that use the technology, is unique. The business issues they are solving, the processes they are automating, and the products they develop all vary greatly. This makes establishing standard methodologies for measurement very difficult.
When an Aberdeen report says PLM increases time to market by 30%, it doesn’t really mean anything because companies’ processes are so different. For measurement to be meaningful, it has to be tailored to specific areas in the product development process and can’t be a broad result like time-to-market. There are a number of things that can affect time-to-market that have nothing to do with PLM. The same thing can be said for product quality and cost. While there is little doubt that PLM has a positive effect on time-to-market, product quality and cost, truly measuring this in a way that applies to all companies using PLM or planning on using PLM is impossible. This tends to invalidate the broad benefit claims that studies from Aberdeen and AMR and others create based on surveys from companies. Most companies only have a vague understanding of the impact PLM has on their development process. They might know that before it was bad and now it is good but may not know why. Obviously there are exceptions and the companies that develop maps for tracking quantifiable areas where PLM has an impact have a better understanding than typical organizations. The purpose of this series of articles is to demystify the methodology behind quantifying PLM value and to establish some standard best practices for measuring the true impact.
In the next article we will look in more depth at the motivation to measure. Depending upon your role in a PLM implementation, your motivations and interest will differ. We will try and look at some of these perspectives and explore the benefits from all angles. We are also very interested in other companies' methodology for calculating value for PLM.
Let us know some of your ideas and we will make sure to include them in our next articles.
[Edit: repost from 2015]