Regardless of whether you already have a PLM system in your company that enables some processes or don’t have anything, whether you use PLM only in engineering or across multiple business functions, you need a sound PLM strategy. Especially if you only use PLM in engineering. Why?

Let’s start with the definition. What is a strategy? A strategy is the long-term direction and plan of an organization that enables it to obtain an advantage in a changing environment through the use of its resources and competencies, with the aim of achieving its objectives and fulfilling stakeholder expectations.

What does this mean with regard to the overall business strategy and PLM? First and foremost, in the context of the above definition, PLM is a resource for a company and can and should be part of the overall strategy to achieve its objectives and fulfill stakeholder expectations. 

The PLM strategy, which is part of the overall strategy, supports and enables a company to execute its business strategy and defines how specifically it will do so with PLM. Without a PLM strategy your company will not be able to properly use PLM as an important resource and enterprise-wide strategic solution and hence forfeit many related benefits. 

What does a PLM Strategy address?

First and foremost, a PLM strategy is not just about technology or tools. It has to address all business practices, processes, tools and technologies, people, and information involved and needed in product sales and marketing, definition, development, manufacturing, sourcing, quality assurance, compliance, maintenance and support, and recycling and disposal across the entire extended organization, i.e. including partners, customers and suppliers. 

What are the steps to create a PLM Strategy?

1. Conduct an assessment of the current business practices, processes, people and tools and determine their maturity, gaps to best-in-class and how they enable or prevent us from executing our business strategy and achieving our objectives. For example, if one of our objectives is to be more innovative and increase the revenue from new products that were introduced in the last 12 months, and the business strategy is to improve our internal innovation capabilities (as opposed to maybe acquiring another company with a better product pipeline), how do our current practices, processes, people and tools support us in executing the business strategy and achieving that objective? What is standing in the way and what do we need to do to improve our practices, processes, people and tools so that we can achieve the objective? Of course we need to do the same with all objectives. At the end of the assessment we will have a comprehensive view of the maturity of our current practices and processes and the capabilities of our people and tools and an understanding of what is possible today, i.e. the gap to best-in-class, and of what can and needs to be improved to execute our business strategy and achieve our business objectives.
    
2. Define objectives for PLM. These PLM objectives of course have to support the overall business objectives, but are focused specifically on PLM. Continuing the example from above, one business objective was that we wanted to be more innovative and generate more revenue from new products. During the assessment we then determined that we do not generate enough new ideas and as a result our product pipeline is empty. In addition, the current new product development process is inefficient and consequently it takes too long to bring new products to market. So two resulting PLM objectives could be to improve our idea generation and management process so that we are able to review and approve more product ideas, and to be able to go through the entire new product development process faster and hence reduce the time it takes to develop new products. Of course these PLM objectives, like all objectives, should be defined SMART, i.e. they should be Specific, Measurable, Attainable, Realistic, and Time-Bound.
    
3. Prioritize which PLM objectives and improvements we want to focus on first, second, third, etc. The sequence may depend on the importance of the business objectives and possible prerequisites and dependencies of the necessary improvements. To use the above example, to increase the revenue from new products we may need to improve our internal innovation capabilities, i.e. the practices, process and tools how we create and manage new product ideas, as well as improve our new product development process and tools to reduce the time it takes to bring those new ideas to market. But it may make more sense to focus on improving the new product development process first, then implement a tool to automate the process, and only then to improve our ideation capabilities because otherwise we just create a bunch of new product ideas but have no way of bringing them to market in a reasonable time. But in order to improve the new product development process, a prerequisite may be that some foundational and extended PLM Capabilities, such as BOM management, configuration management, workflow management, change management, etc have to be implemented first if the company doesn’t already have them.
    
4. Create a roadmap of all the improvements with a detailed scope for each phase and a realistic timeline to implement them gradually in the sequence that was decided in step 2. This will later help to determine the required resources to implement each improvement, ie capital, internal labor and external parties, etc. The scope should include what functional areas are involved in each activity, what practices and processes will be addressed and what PLM functionality will be implemented. Using the earlier example, in the first phase we focus on the new product development process In this step we will also determine until when existing tools need to be maintained and when they can be retired because they will be replaced with new technology. The idea of the PLM roadmap is to provide a comprehensive high-level visual plan of the different phases and activities that will be required to implement the PLM strategy and when new capabilities will be available and start to contribute in achieving the company’s objectives.
    
5. Determine resources, roles and responsibilities for each activity. Resources include necessary capital for investments in hardware, software and infrastructure, expenditures for professional services and software subscriptions and/or maintenance, but also internal resources, i.e. people from all business functions involved in implementing the PLM strategy. Regarding capital and expenses, it is important to determine the budget at this time based on the expected value of the improvements, not later based on vendor proposals. This will ensure that the budget determines the maximum allowable amount to be spent on implementing the strategy, and not that the vendor proposals define the budget and then PLM does not achieve the desired return on investment and value.
    
6. Assign leadership responsible for implementing the PLM strategy. Since PLM is an enterprise-wide strategic solution, leadership must be with an enterprise level executive function, such as the CDO, CIO or COO. Only this will ensure that the resources planned and allocated to the project remain available throughout the implementation of the PLM strategy. It will also ensure that decision are made that are in the best interest of the entire company and not based on the interest of individual functional areas.