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2PLM John Stark Associates |
Number 23 |
- Welcome Page 2 - Update Page 3 - News Page 4 - Brief lines | Welcome to this issue of 2PLM, an e-zine distributed every two weeks on a free subscription basis. This week's article "ROI Models: Building a Stronger Business Case in Tough Economic Times" is from George Schildge, president with Matrix Marketing Group. * ROI Models: Building a Stronger Business Case in Tough Economic Times * Visit the Web sites of almost any product life cycle management (PLM) solutions provider, or, for that matter, almost any solutions provider these days, and you will find a full inventory of tools to demonstrate the economic worth of their offerings. Among these tools will be return on investment (ROI) calculators, white papers, total cost of ownership (TCO) models, and customer case studies. That PLM vendors are attempting to prove their usefulness in this way should come as no surprise in the present economic slowdown. As customers are becoming much more cautious about purchasing decisions and increasingly insistent on value for their money, solutions providers are equipping their sales and account teams with these devices designed to show how an investment in the supplier's product or service will pay for itself over time. But, how well do such calculators, papers, models, and success stories do the job? There are reasons to believe that the answer is "not very well." Building a compelling ROI or TCO based business case requires PLM vendors to demonstrate that it meets the criteria for three dimensions of the operation: objectivity, replication, and relevant comparisons. Based on my experience of both working with and talking to numerous PLM companies and reviewing their ROI work to date, I find the vast majority fail to perform in one or more of these dimensions. This is not to say their efforts are totally without merit, for making broad claims or offering anecdotal evidence may be enough to pique some customers' interest; however, most PLM vendors, because they lack any real ROI based marketing and sales strategy, are not realizing the more important potential benefits of shortened sales cycles, increased pricing power, and stronger customer relationships which lead to greater profitability. Objectivity Lack of objective and quantifiable customer data is the single greatest weakness found in most ROI/TCO models and case studies. Too often, PLM vendors fail to conduct the necessary research to establish what their solutions are really worth to customers. Instead, they tend to rely on customers' impressions or opinions about the degree to which the company solutions impact efficiency, costs, or specifically serve customers by generating increased revenues. In many cases, the data that drives the ROI calculators and models hardly merits the name because it consists of "what if" scenarios. Thus, the persuasiveness of the analysis rests entirely on the credibility of the "ifs." The problem is precision data rather than impressionistic data. A common case for solutions that promise efficiency gains and cost savings by reducing time spent and investment required when carrying out specific tasks, such as demand planning or purchasing, is to ask the potential customer for the present time and investment spent on these tasks. The bottom line is that an ROI/TCO based business case is only as good as the information that drives it. That information should be derived from rigorous measurement of actual usage situations, rather than from the subjective impressions of one, or a handful of people. Further, suppliers who have conducted research should take a hard look at how the data were collected. It may be necessary to use a variety of research techniques and methodologies to validate customer data and benefit claims and these may include an analysis of historical data and records, mapping workflow processes, and doing time motion and direct observation studies. Designing and executing such studies is difficult, but essential to give the purported ROI credibility. Relevant Comparisons Another mistake PLM vendors make is to seemingly shy away from comparing the value of their offering to that of their closest competitors by trying to compare apples to peaches, i.e., using web-based contract management vs. paper-based. To justify their price tag, vendors must be capable of demonstrating that they deliver more value, as compared in the same terms, than their competing solutions providers. Few PLM vendors have taken steps to do this. Conclusion We believe that over 70% of companies do perform an ROI analysis to justify any new information technology initiative, the flaws described here that are common in ROI calculations can adversely impact the sales effort of those companies. The customer may see the wisdom of automating a process that was formerly labor intensive and may even make a purchasing decision based on the company use of such a measurement. Difficulties arise, however, when price must be negotiated and the customer questions the quality of the information, the validity of the formulas and ratios used to arrive at an impressive ROI calculation. Customer skepticism may then be used in an effort to pressure the seller to lower the price, and the seller, in turn, may have to settle for that price to make the sale. The difference between precise figures and approximate ones can be expensive for the company. To optimize customer satisfaction, and, consequently, the price of the transaction, a sound ROI analysis, based on research that delivers precision, is vital. George Schildge is president with Matrix Marketing Group, a marketing firm that specializes in helping small and emerging companies achieve profitable growth by getting the maximum results from their sales and marketing investments. George Schildge can be reached at george.schildge@mmg-us.com or www.mmg-us.com. |
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News |
EDS unveiled its strategic priorities for rejuvenating the company. EDS' A.T. Kearney and Product Lifecycle Management (PLM) Solutions units will continue to operate as complementary businesses. Details LMS International announced the launch of a new subsidiary company, NOESIS Solutions. The new company will focus on the Process Integration and Design Optimization (PIDO) market. Details Mentor Graphics Corporation announced the acquisition of the assets of DDE-EDA A/S. Details * Financial * Dassault Systemes announced it is providing, for informational purposes only, a comparison of financial statements prepared in accordance with French GAAP and U.S. GAAP for the year ended December 31, 2002. Details * People * Actify announced the appointment of Randy Ochs as president and Chief Executive Officer. Details Agile Software Corporation announced the appointment of Gareth Chang to the Agile Software board of directors. Details ICAM Technologies Corporation announced that Don Kutcher has joined the ICAM team as a Channel Business Manager in California. Details  Pilgrim Software, Inc. announced the hiring of John Yarbrough as vice president of Sales for North America. Details PTC announced its new executive vice president and chief financial officer, Neil Moses, former Chief Financial Officer of Axcelis Technologies, a semiconductor equipment manufacturing company. Details Staffware announced the appointment of Chris Phillips as Chief Marketing Officer. Details * Implementation * Autodesk, Inc. announced that Fujitec Singapore has designed a new type of elevator using the Autodesk Inventor Series software. Details Autodesk, Inc. announced that Korean-based Unicorn Industrial Sewing Machine Corp. has transitioned from 2D to 3D design with the Autodesk Inventor Series software. Details AVEVA, Inc. announced that Jacobs Engineering Group Inc. has extended its global software license agreement to 2007. Under the agreement, AVEVA will provide Jacobs with a global pool of licenses for the flexible use of its VANTAGE suite of engineering lifecycle solutions. Details Cadence Design Systems, Inc. announced that China National IC Design Industrial Base (Shenzhen) Institution has selected Cadence technologies as its essential EDA solution. Details Commerce One announced momentum in the Asia Pacific region through new customer acquisitions in the first half of this year. Details Dassault Systemes and IBM announced that Heroux-Devtek, a Canadian aerospace supplier specializing in landing gear, has selected their Product Lifecycle Management (PLM) solutions. Details Documentum announced that Lufthansa Technik AG has deployed the Documentum ECM platform. Details Documentum announced that West Pharmaceutical Services, Inc. is expanding its use of the Documentum ECM platform to create, manage and deliver technical product information. Details EDS announced TransBus International implements EDS' product lifecycle management (PLM) software to link departments, sites and suppliers. Details Eigner announced that Kollmorgen Electro-Optical has selected Eigner as its PLM solution provider. Details Eigner announced that Siemens Audiologische Technik GmbH has further extended its Eigner PLM deployment. Details E2open announced that Hitachi Global Storage Technologies has selected E2open on-demand software for Multi-Company Process Management. Details E2open announced that Seagate Technology is in production using E2open for both buy and sell-side build-to-demand operations. Details E2open announced that Solectron Corporation is in production using E2open's software on demand for multi-company process management to collaborate more closely with trading partners on key supply-chain and procurement activities. Details Intergraph Corporation announced that Canadian Natural Resources Limited has purchased a package of engineering and design software to support the Horizon Oil Sands project. Details MAPICS, Inc. announced that Tronair, Inc. has selected the MAPICS ERP for iSeries solution to streamline engineering processes and better manage production. Details MatrixOne, Inc. announced that Cummins Inc. has expanded its use of MatrixOne solutions to provide a single global environment for engineering and program management across multiple Cummins divisions. Details Mentor Graphics Corporation announced that Tower Semiconductor Ltd. has selected Mentor's Calibre design-to-silicon platform. Details MSC.Software Corp. announced that Celerity has utilized a SmarTeam Product Data Management (PDM) system and integration services from MSC.Software. Details MSC.Software Corp. announced that PSA purchased a 350,000 Euro contract for MSC.Software's MSC.ADAMS/Engine software and technical support to optimize the design of their timing belts. Details NexPrise, Inc. announced that Jacobsen, A Textron Company, has deployed the NexPrise Engineering Change Manager application. Details Open Text Corporation said that Motorola, Inc. is expanding its use of Livelink as its central knowledge repository and platform for collaboration. Details PTC announced that the Volkswagen group is employing PTC's ProductView software as a group-wide standard for the visualization of 3-D data created in the product development process. Details SolidWorks Corporation announced McDantim Inc., a leader in commercial gas blenders, is using SolidWorks 3D mechanical design software. Details SolidWorks announced President Office Furniture is using SolidWorks software to quickly design the stylized office furniture it sells throughout Europe. Details Tecnomatix Technologies Ltd. announced that Robert Bosch GmbH is extending its use of eM-RealNC software from Tecnomatix. Details Tecnomatix Technologies Ltd. announced that electronics manufacturing service (EMS) provider InnerStep selected the company's eMPower for Electronics solutions to implement a multi-site new product introduction (NPI) initiative aimed at achieving rapid, flexible new product launches and driving Six Sigma quality improvements throughout its operations. Details think3 announced an agreement with Bielefeld, Germany-based Gildemeister AG to implement think3's thinkdesign and thinkteam products at the company's Italian subsidiary. Details 3D Systems Corp. announced Danish hearing aid manufacturer, Widex A/S, has acquired multiple Viper SLA systems for custom manufacturing of "In-the-Ear" hearing aids. Details 3D Systems Corp. announced that Airbus in the United Kingdom purchased an SLA 7000 system to produce components for wind tunnel testing at its operations in Filton, Bristol. Details * Developments * Alventive, Inc. announced the immediate availability of release 5.0 of the company's product suite which includes Alventive Project Navigator, Alventive Quick Collaboration, Alventive PreSourcing Collaboration and Alventive Design Process Collaboration. Details ANSYS Inc. announced that CFX-5.6, the latest version of the company's computational fluid dynamics (CFD) software, is now available on 64-bit Intel Itanium 2-based workstations running HP-UX 11i. Details ANSYS Inc. announced the availability of ANSYS 7.1. Details ANSYS Inc. announced the release of AI*Environment, a robust pre- and post-processing tool to support complex and advanced simulation problems faced by engineering analysts. Details Ashlar-Vellum announced the availability of native support for Mac OS X on their entire product line of Designer Elements. Details Autodesk, Inc. announced the immediate availability of the Autodesk Streamline 5 manufacturing collaboration service through authorized resellers. Details AVEVA Group plc announced the release of VNET Navigator, a web-centric solution for the collaboration of plant design models, 2D schematics and their associated drawing deliverables. Details Cadence Design Systems announced the availability of a qualified reference flow for IBM technology based on the Cadence Encounter platform. Details Commerce One announced momentum in the Asia Pacific region through new customer acquisitions in the first half of this year. Details Cyco Software announced the availability of Cyco AutoManager Meridian 2003b and Cyco AutoManager TeamWork 2003b - its latest software versions that offer full support for Autodesk Inventor 7. Details Digital Paper Corporation announced that it has added support for the JBoss application server to DigitalPaper XE. Details Document Control Systems, Inc. announced it is enhancing its integrated, Web-based software suite through the introduction of a new configurable, forms-based workflow automation software called MASTERControl Forms. Details Documentum introduced the availability of a new online Component Exchange that gives Documentum developers access to pre-built, pre-tested, reusable software components. Details IDEAL.com announced that RasterID, automatic indexing software, and WiseImage, raster editing software, are compatible with the HP Designjet 4200 scanner. Details InnovMetric Software announced that it will launch the eighth version of its reverse-engineering software PolyWorks/Modeler in the upcoming weeks. Details ITI TranscenData announced that CADfix version 5.2 will provide users with the ability to import and export native files directly from Pro/ENGINEER. Details LMS International announced the availability of new capabilities in LMS SYSNOISE to simulate flow-induced noise and aero acoustic phenomena long before the physical prototype stage. Details Moldflow Corporation started shipping Moldflow Plastics Insight (MPI) 4.1. Details Moldflow Corporation announced the release of Moldflow Design Link (MDL) 4.0. Details Moldflow Corporation announced M-Vote, an on-line voting program for capturing and reaching a consensus on customer-driven enhancement requests. Details MSC.Software Corp. announced the expansion of the MSC.visualNastran V5i family. Details Omnify Software announced the availability of Omnify 2.5, a business-ready PLM solution to provide a complete view of the product development process throughout the entire enterprise. Details Open Text Corporation said it is launching a corporate governance platform for Livelink, giving companies a single system to manage critical information and collaboration in the face of tough Sarbanes-Oxley regulations. Details Proficiency announced the latest release of its Collaboration Gateway feature-based interoperability solution. Details QUMAS launched its latest new product designed to help pharmaceutical, medical device and biotechnology corporations comply with the latest international regulations. Details SensAble Technologies, Inc. announced the immediate availability of the newest member of the FreeForm family of products, the FreeForm Mold system Version 1.0. Details STEP Tools, Inc. announced it is shipping a major release of its flagship product ST-Developer. Details Synchronicity announced that the Synchronicity Developer Suite has been re-architected to enable the dramatic performance improvements necessary for very large, enterprise-wide deployments. Details * Relationships * Actify Inc. announced its support for Unigraphics NX for its SpinFire product line. Details Actify, Inc. announced that it has licensed PLM Vis software from the PLM Solutions division of EDS to enable Actify's SpinFire family of products to support the PLM Vis JT data format. Details ALGOR and Alibre, Inc. announced they have partnered to offer a parametric, feature-based modeling system for creating 3-D solid parts and assemblies within all ALGOR Professional core packages. Details Cimmetry Systems announced that AutoVue integrates with SAP. AutoVue allows users to view and markup more than 200 different formats, directly from the SAP environment, without requiring the authoring applications. Details Firepond, a vendor of configuration and interactive selling solutions, announced a new partner program. Details IDEAL.com announced it has begun signing dealers to the NEW IDEAL/Contex Authorized Dealer Program. Details Information Handling Services Inc. announced it has partnered with Brainshark, Inc. Details LMS International and T-Systems International GmbH announced their intent to establish a partnership to extend the LMS Virtual Lab product portfolio. Details MAPICS, Inc. announced that Optimum Solutions, Inc. was recently added to its list of certified partners. Details Open Text Corporation and First Consulting Group announced that they are joining forces to meet the growing need for combined collaboration and document life-cycle management solutions in the life sciences industry. Details Pilgrim Software and Camstar announced a strategic product technology and marketing alliance. Details Spatial Corp. and LK Group, a pioneer in the coordinate measuring machine market, announced that the latest version of CAMIO Studio will incorporate Spatial's 3D InterOp CATIA V5 product. Details Surfware, Inc. announced the expansion of its international value-added reseller network with the establishment of a business partnership with LaMarche Machinery, Inc., in Alberta, Canada. Details Synchronicity, Inc. announced signing EsEda Limited to resell their design reuse, collaboration and management software in Europe. Details think3 and D-Cubed Ltd. announced that they will integrate D-Cubed's Collision Detection Manager (CDM) into think3's thinkdesign software. Details * Other * Agile Software Corporation announced that it has been selected by iSource Business Magazine as a top supply and demand chain enabling organizations. Details ANSYS Inc. announced it earned recognition as one of BusinessWeek's 100 best "Hot Growth Companies" as well as one of CNN Money's "Fabulous 40". Details AVEVA Group announced that according to the results of a recent survey by AVEVA Group improving the design and development processes of an offshore oil facility has a major impact on overall profitability. Details Daratech announced that the digital prototyping and simulation software and services market will enjoy robust growth of 13% to $2 billion in 2003, by Daratech's forecast, and will continue growing an average of 13% annually through 2007. Details Documentum announced that it has been issued a US Patent for its records management technology, which automates and streamlines the classification of electronic records. The US Patent (#6,553,365) describes Documentum's system for extracting information about electronic documents and automatically classifying the documents as they are declared official records. Details Endeca announced it has been selected by Technologic Partners, publisher of VentureWire, as a winner of its Investors' Choice award. Details FileNet Corporation announced that it has been positioned in the "Leader" quadrant by Gartner Inc. in Gartner's first-ever Magic Quadrant assessment of Pure-Play Business Process Management (BPM) vendor offerings. Details PTC and Journey Publishing Inc. announced the availability of the Pro/ENGINEER Wildfire Student Edition. Details PTC published an exclusive study on the aerospace and defense markets that found product development in those industries suffering from a significant lack of coherent vision, management and execution. Details SAP AG announced momentum with growing customer and partner adoption of SAP NetWeaver, SAP's open integration and application platform unveiled in January of this year. Details 3D Systems Corp. announced that Nasdaq has determined to continue the listing of the Company's securities on The Nasdaq National Market. Details |
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