What is PLM

What is PLM image

PLM Return on Investment (ROI)

Your organization can benefit from PLM in many ways. Among these are improved quality, streamlined operations, greater efficiency, and financial return on investment (ROI). According to AMR/Gartner, ROI can be broken down into three categories, each occuring at different time intervals - immediately, within the 1st year, and well into the future.

  • Now: Infastructure savings — Accrue immediately after go-live. Often the result of improved collaboration and better IT efficiency.
  • Next Year: Improvement in established operating metrics — Accrue 6-12 months after go-live. Based on widely used and genereally well-benchmarked operating metrics.
  • +5 years: Strategic competitiveness impacts — Accrue 3-5 years after go-live. Includes savings on internal programs and process as well as improved strategic position.

ROI Image

Source: AMR/Gartner

Here are some examples of infastructure-related savings as a result of PLM implementation in various industries.

Costs Infrastructure Impact Industry
IT Infrastructure Costs Reduced total number of product development applications from 1,500 to 500; reduced 150 separate portals to 1 (eviz.net); reduced per user IT seat cost from $200K in 1995 to $15-$18K today Automotive
Eliminated 18 separate legacy PDM systems, each with 2 FT DBAs; dramatic reduction in number of components; system combines in one place component system, parts list, document management, ECM Process Industry Automation
Reduced total number of systems required for product data. "Significant reduction in TCO for PLM" Semiconductors
Saved $1.1M in first 6 months with system decomissioning, document handling savings Semiconductor Equipment
Potentially a savings. Multiple existing commercial packages in place (47)—possible to reduce TCO Pharmaceuticals
Replace 30 year-old configuration management system with apeture card data entry; print room shut down, staff reallocated; plan to replace COPICS service parts system Transport Temperature Control
Eliminated Access DB and old Project Management tool Auto Supplier
Other Infrastructure Costs Offset project and software costs in first year with document printing and shipping Industrial Equipment
20% cost savings in document and communications costs with manufacturing partners Specialty Chemicals
$30K saved in first three months with document printing and shipping Electronic Manufacturing Services
Direct savings in print room expenses Electro Mechanical Machinery
Document delivery 90% improvement in cost and time Semiconductors
Eliminated 4 of 7 ECO coordinator positions at $70K per year each Electronics
Eliminated card cataglog and admin, costs to maintain Storage Devices
Eliminated hard copy document handling expenses—print, courier—and network charges Bearings and Motion Control
Print room, courier, network charges Electrical Gear

The PLM Value Framework

Aras breaks down the benefits of PLM, examining Revenue, Costs, Capital and Risks.

Click here to download the PLM Value Presentation

PLM ROI Preso Image

Read about Operational Benefits of PLM →


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