PLM 2.

0:
Why Enterprises
Should Embrace It
Daniel Lago
 PLM 2.0: Why Enterprises Should Embrace It

PLM 2.0: Why Enterprises Should Embrace It

Enterprises need to innovate and adapt, or risk to lose market and become obsolete. Evidence of
this is demonstrated on a recent study showing the average S&P 500 companies decreased
their permanence on this index from 60 years in 1960 to less than 18 years in 2020 1.
Traditional PLM 1.0 is an engineering and manufacturing centric (Concept, Develop, Pilot and
Launch) and despite well-defined stages and phased gates for go/no-go decisions, does not address
the enterprise need to accelerate innovation in products, services or business models. Equally
important for enterprises to be efficient innovators is to have the ability to quickly react to external
disruptions. Combining these scenarios to a fast-paced introduction of new technologies and
shifting market conditions have rendered PLM 1.0 incomplete and insufficient to grow and sustain
enterprises in the marketplace.
PLM 2.0 responds to these conditions by departing from the engineering and manufacturing
centrism to integrated and extended stages and respective processes. PLM 2.0 extension englobes
more departments (marketing, services, support, compliance, legal, financial, IT) and goes beyond
the four walls of the enterprise.

Recent emphasis on innovation if as a stand-alone will fail even the most ambitious enterprise. A
sound PLM transformation requires the inclusion and connectivity of all stage processes. An
avalanche of new ideas for new products, product improvement, or new business models, for
example, if not connected with the enterprise strategy, can provoke the allocation of resources on
the wrong idea. Likewise, the allocation of resources to maintain a product, service or outdated
business model can be just as devastating.

PLM imposes a heavy toll on enterprises with its multiple cross-functional processes. If
inefficiencies exist on PLM 1.0, most likely PLM 2.0 will propagate inefficiencies further challenging
most enterprises. In this same scenario, centralizing all responsibilities for execution on Product
Managers can be overwhelming and cause adherence problems. Therefore, enterprises need to take
a critical look at their organizations and embrace a transformative program predicated on four pillars
for an effective PLM.

1 Scott
D. Anthony, S. Patrick Viguerie, Evan I. Schwartz, and John Van Landeghem. “2018 Corporate Longevity Forecast: Creative
Destruction is Accelerating”
 PLM 2.0: Why Enterprises Should Embrace It

Governance
Governance on PLM 1.0 has been mostly technically centric (development & manufacturing). PLM
2.0 broadens the involvement of other departments (marketing, services, support, compliance, legal,
financial, IT), and so to should the ownership of decision-making processes. A revision on the
governance structure is necessary to clarify governance hierarchy, decision rights, roles and
responsibilities, and cadence.

Process
PLM 2.0 increased stages left (Ideation and Portfolio management) and right (In-Market and Sunset
management) of traditional PLM and each stage with their respective processes. Standardized
processes are necessary to drive consistency and predictability in the operations. They should be
constantly monitored for purpose, efficiency, and bottleneck identification. A constant analysis of
the process is also critical for adaptability to changing conditions and for optimization.

Integration
The key to the success of PLM 2.0 is for departments and teams to break siloed mentality and
operate efficiently in cross-functional environments. Integration can be measured by the agility of
flows and the ability to synchronize interdependencies, so resources have optimum utilization at the
right time (a lean principle). Enabling integrated tools is highly recommended. Enterprises that rely
 PLM 2.0: Why Enterprises Should Embrace It
on email and passive repositories find themselves spending a significant amount of time on non-
value-added activities. Another important integration factor is the need to transcend the four walls
of enterprises and bring market-sentiments, voice-of-the-customer, quality performance, etc., easily
and frequently to the decision-making process.

Performance
PLM 2.0 relies significantly on a data-driven culture and therefore metrics and dashboards will need
to be implemented. Decisions can be made as fast and accurate as of the ability of an enterprise to
monitor internal and external parameters. Aggregation and disaggregation are important
considerations so data can be compared with strategic goals and descend to product goals
respectively. It is recommended to limit metrics to a manageable number (too many can detract
from the big picture) and focus on two types of metrics:
• Process Metrics: Tasks status, tasks late, phase duration, av. support
resolution time, etc.
• Outcome Metrics: CSat, product revenue, time to market, development
cost, etc.

Key takeaways
• Enterprises today are not just susceptible to disruptive technology and product innovation but
also business model innovation.
• PLM is rich in processes and presents a heavy toll on enterprises usually overwhelming
Product Managers. When designing or reviewing processes keep agile, management by exception,
and efficiency in mind.
• Consider regulatory and certification requirements early on.
• Build processes that allow fast track, so product innovations, for example, can flow faster than
a new product.
• Enterprises today are not just susceptible to disruptive product innovation but also to Product
Business Model Innovation.
• The table below summarizes the main difference in the PLM approach

PLM 1.0 PLM 2.0 (in addition to PLM 1.0)

• Engineering & Manufacturing Centric
• Product structure & data management
• Product testing and certification
• Push scheduled processes
• Customer request management
• Transparent internal processes
• Empowered Product Managers
• Enterprise wide with cross-department governance
• Product performance management
• Compliance and risks management
• Pull flexible and ad-hoc processes
• Market request management
• Transparent user processes
• Empowered Teams
 PLM 2.0: Why Enterprises Should Embrace It

About the Author

Daniel Lago is an enterprise system professional experienced in linking vision

to value realization and improved business outcomes. He is the founder of
SoftLink Technologies, LLC, a consulting and systems implementation
company, specialized in transformation programs related to product lifecycle
management, governance and risk management, and enterprise quality.
Daniel has an Electrical Engineering degree, studied TQM in Japan at the
Institute of JUSE (Japanese Union of Scientists and Engineers), and leads the
Atlanta chapter of PDMA (Product Design and Management Association). He
can be reached at daniel.lago@softexpert.com .
SoftExpert PLM is an affordable, easy-to-use, and web-based Product Lifecycle Management (PLM) software
that allows companies to manage the entire lifecycle of a product efficiently and cost-effectively, from
conception, design and manufacture, through service and disposal.

Product Realization Process Project Control

The solution provides a complete data management system that allows users to assign all of the data
necessary to describe design, manufacturing, purchasing, quality/test, and service aspects of product records.
Product data can be defined by any product object (parts/components, documents, Bill of Material [BOM],
machines/instruments, costs, characteristics, etc). SoftExpert PLM software manages all product revisions
and provides a complete audit trail detailing all historical changes.

Product Definition Document Management

With SoftExpert software for Product Lifecycle Management, companies can promote tight integration with
their ERP system and CAD software, providing timely and transparent access to the most important product
information (assemblies, parts, drawings, etc.), tracking engineering changes, and maintaining the appropriate
relationships between the CAD design objects and the product structure.

Failure Analysis Inspection Management

Learn More at:

https://www.softexpert.com/solucao/product-lifecycle-management-plm/
 Manage business process change with checklists
About SoftExpert
SoftExpert is a market leader in software and services for enterprise-wide business process
improvement and compliance management, providing the most comprehensive application suite to
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