Will PLM finally have its day in the enterprise?
Lawson Software announced March 17 that it has acquired the product
lifecycle management division of Freeborders, a developer of retail and apparel
lifecycle management software. While the acquisition strengthens Lawson's PLM
capabilities in two key vertical markets for the company, it also raises the
question, Will PLM finally have its day in the enterprise?
PLM software has long held the promise-for vendors and industry analysts, at
least-of being able to streamline the new product development and introduction
cycle. The argument has been that by bringing business users from sales and
marketing, R&D, accounting, and even the supply chain into the product design
process, companies would be able to streamline new product introduction and
lifecycle management ... and save big bucks.
But the promise of PLM has remained only a promise for a number of years.
Then, in October 2006, Oracle, one of the world's largest business applications
vendors, plunked down $495 million for PLM software developer Agile, sparking
new hopes that PLM would finally see the light of day throughout the enterprise.
And now Lawson, a major ERP (enterprise resource planning) vendor for midmarket
companies, has bought Freeborders in a deal the terms of which were
To really work effectively throughout the enterprise, PLM software has to
have access to business processes found in various applications, from
financials and ERP out to SCM (supply chain
management), SRM (supplier relationship management) and CRM
(customer relationship management). The idea is that while PLM doesn't
necessarily have to reshape business processes in, for example, ERP, it should
rephrase processes with a product-oriented perspective. The strategy has
finally started to pay off. An AMR Research
report titled "Product Innovation and PLM 2008 Application and Market
Trends Spending Series," published in January, said manufacturers and
service companies recognize the importance of product innovation to their
companies' success-and they're planning double-digit increases in PLM spending
this year in the United States and Europe. "The majority of respondents to
our survey realize the need to integrate PLM with the broader value
chain," wrote AMR analyst Jeff Hojlo.
Hojlo, along with analysts Eric Klein and Michael Burkett, wrote that in
past PLM spending research manufacturers were asked why they think product
launches fail. The reason most often cited was that the product didn't meet
customer needs. The 2008 report found that the biggest reason new products fail
was thought to be higher-than-projected costs-"which highlights the need
for better visibility and analysis over cost drivers like increased R&D and
procured direct materials," according to AMR.
The research showed that the groups outside of engineering that have the
biggest influence on PLM spending in the United States were R&D, design and
manufacturing, and in Europe, where supply chain and sales also have a
considerable influence, it was logistics, R&D and finance.