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  • PRODUCT LIFECYCLE MANAGEMENT INTRODUCTORY GUIDE

    IG1100

    Version1.1

    November, 2012

    TM Forum 2012. All Rights Reserved.

  • www.tmforum.orgIG1100, Version 1.1 TM Forum 2012. All Rights Reserved. Page 2 of 52

    Product Lifecycle Management - An Introductory Guide

    Notice

    Copyright TeleManagement Forum 2012. All Rights Reserved.

    This document and translations of it may be copied and furnished to others, and derivative works that comment on or otherwise explain it or assist in its implementation may be prepared, copied, published, and distributed, in whole or in part, without restriction of any kind, provided that the above copyright notice and this section are included on all such copies and derivative works. However, this document itself may not be modified in any way, including by removing the copyright notice or references to TM FORUM, except as needed for the purpose of developing any document or deliverable produced by a TM FORUM Collaboration Project Team (in which case the rules applicable to copyrights, as set forth in the TM FORUM IPR Policy, must be followed) or as required to translate it into languages other than English. The limited permissions granted above are perpetual and will not be revoked by TM FORUM or its successors or assigns. This document and the information contained herein is provided on an "AS IS" basis and TM FORUM DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY THAT THE USE OF THE INFORMATION HEREIN WILL NOT INFRINGE ANY OWNERSHIP RIGHTS OR ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

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    Product Lifecycle Management - An Introductory Guide

    Table of Contents

    Notice .......................................................................................................................... 2

    Table of Contents ............................................................................................................. 2

    List of Figures .................................................................................................................. 4

    List of Tables .................................................................................................................. 5

    Executive Summary .......................................................................................................... 6

    1. PLM in the Digital Economy ............................................................................................... 8 1.1. The Background to PLM ...................................................................................................................... 8 1.2. PLM Defined ..................................................................................................................................... 10

    1.2.1. Product Data Management at the PLM Core .............................................................................. 11 1.2.2. Holistic PLM .............................................................................................................................. 17

    2. Making PLM Happen .................................................................................................... 22 2.1. PLM Reference Frameworks ............................................................................................................. 23

    2.1.1. Business Process Framework (eTOM) ........................................................................................ 23 2.1.2. Information Technology Infrastructure Library (ITIL) ................................................................... 25 2.1.3. Software Development Lifecycle (SDLC) ..................................................................................... 27

    2.2. Standing up PLM ............................................................................................................................... 29 2.2.1. Establishing the PLM Foundation ............................................................................................... 29 2.2.2. PLM Design Principles ............................................................................................................... 30 2.2.3. Example PLM Process Models ................................................................................................... 32 2.2.4. PLM Stages and Gates ............................................................................................................... 35 2.2.5. Typical PLM Roles ..................................................................................................................... 37 2.2.6. Bringing It All Together .............................................................................................................. 38

    3. PLM Challenges and Opportunities .................................................................................... 41 3.1. Challenges ........................................................................................................................................ 41 3.2. Benefits and Potential Value ............................................................................................................. 43 3.3. Measuring PLM Results ..................................................................................................................... 45

    3.3.1. Industry Standard KPIs .............................................................................................................. 46 3.3.2. KPI Pitfalls to Avoid ................................................................................................................... 46

    4. PLM Maturity ............................................................................................................. 48 4.1. Maturity Model Definition ................................................................................................................ 48 4.2. Key Aspects of a Maturity Model ....................................................................................................... 48

    5. Why PLM ................................................................................................................. 50

    6. Appendix ................................................................................................................. 51 6.1. References ....................................................................................................................................... 51 6.2. Document History ............................................................................................................................ 52 6.3. Company Contact Details .................................................................................................................. 52 6.4. Acknowledgments ............................................................................................................................ 52

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    Product Lifecycle Management - An Introductory Guide

    List of Figures

    Figure 1 - Product Maturity Lifecycle. Source: Tribold Limited. 9

    Figure 2 Application Framework Product Management Domain. Source: TM Forum. 11

    Figure 3 PLM across the Product Management Domain. Source: Tribold Limited. 11

    Figure 4 Product Model. Source: Tribold Limited. 13

    Figure 5 Information Framework (SID) Data Domains. Source: TM Forum. 14

    Figure 6 Information Framework Product-Service-Resource Associations. Source: TM Forum. 15

    Figure 7 Simple PLM Framework. Source: Tribold Limited. 18

    Figure 8 Holistic PLM Framework. Source: Tribold Limited. 20

    Figure 9 Goals of PLM. Source: CIMdata. 21

    Figure 10 Dimensions of PLM Deployment. Source: Telecom New Zealand. 22

    Figure 11 Business Process Framework with PLM Designations. Source: TM Forum. 24

    Figure 12 Business Process Framework PLM Domain. Source: TM Forum. 24

    Figure 13 ITIL Service Lifecycle. Source: ITIL/itSMF. 26

    Figure 14 ITIL to PLM Mapping. Source: TM Forum. 27

    Figure 15 Software Development Lifecycle. Source: Wikimedia Commons. 28

    Figure 16 Holistic PLM Building Blocks. Source: Telecom New Zealand based on Detecon Model. 29

    Figure 17 Organization & Process Alignment. Source: Telecom New Zealand. 30

    Figure 18 PLM Process Model. Source: Tribold Limited. 32

    Figure 19 PLM Pathways. Source: Telecom New Zealand. 34

    Figure 20 PLM Process Model. Source: Telecom New Zealand. 35

    Figure 21 PLM Stages/Gates. Source: Tribold Limited. 35

    Figure 22 PLM In Practice. Source: Telecom New Zealand. 39

    Figure 23 PwC Product Management Maturity Framework. Source: PRTM Study. 49

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    Product Lifecycle Management - An Introductory Guide

    List of Tables

    Table 1 Benefits of PLM. Source: John Stark. 17

    Table 2 PLM Design Principles. Source: Telecom New Zealand. 31

    Table 3 Holistic PLM Framework Level 2/3 Processes. Source: Tribold Limted. 34

    Table 4 PLM Gate Definitions. Source: Tribold Limited. 36

    Table 5 Typical PLM Roles. Source: Tribold Limited. 38

    Table 6 With and Without PLM. Source: Telecom New Zealand. 50

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    Product Lifecycle Management - An Introductory Guide

    Executive Summary

    Product Lifecycle Management (PLM) has long been the reserve of the retail and manufacturing industries.

    When you are constructing something physical, it is easy to see how the idea and design of individual

    component parts and their successful assembly into a single saleable product depend directly on clear planning

    and definition, end-to-end process coordination, and ongoing delivery management, all of which are key

    aspects of a PLM framework.

    The benefits are obvious too assured interoperability during production, an end-state product that closely

    resembles the upfront requirements and design specifications, and a common understanding of what is being

    sold and what is required to sell and support it.

    Applying these same principles to the communications industry, however, was not so obvious in the past. One

    could point to a number of reasons why operators did not feel the pressure to institutionalize PLM: limited

    product complexity and features, homogenous network/provider landscape, monolithic infrastructure, and so

    forth.

    Fast forward to todays digital world, and the environment is anything but simple and static. With the

    convergence of technologies and markets, the abstraction and virtualization of services, and a truly global

    market of over 6 billion people, digital services are exploding. Thus the traditional landscape of the

    communications industry has been forever changed.

    With the seemingly infinite number of moving parts that require coordination in order to produce a seamless

    offering for the market, against the backdrop of a rapidly changing ecosystem, PLM is becoming an essential

    enabler of the Digital Economy.

    PLM, if implemented correctly, can have significant operational, financial, and customer experience benefits:

    Operating cost reduction. Decrease execution cost, increase human resource performance, and

    decrease churn rate.

    Time management. Decrease time to market, decrease waiting time, and decrease delay in delivery to

    the customer through improved collaboration and establishing a consistent product development

    process across the business.

    Innovation. Organizations are looking for PLM to improve the business by enabling more innovation at

    the idea stage, producing better product designs, increased reuse, improved standards and consistency,

    and clearer visibility and management of product data.

    Product and process quality improvement. Increases can be observed in product management process

    performance, customer value performance, value net performance, information availability and

    accuracy, product launch quality, provisioning performance, service quality, and reductions in technical

    defects.

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    Product Lifecycle Management - An Introductory Guide

    Implementation of a PLM strategy should and can be underpinned by sound financial targets. These targets help

    to quantify the benefits of a transformative or improvement PLM project. Examples of benchmarks that have

    been proven by referenceable case studies in the marketplace include:

    50% reduction in the time to market

    20% increase in revenues by widening the product portfolio

    20% increase in revenues by introducing products faster

    40% increase in revenues by introducing new products/services on existing offerings

    35% increase in product quality

    60% reduction in cost to market

    This guide explores the rationale for PLM in the Digital Economy, the maturity of the frameworks available, and

    how such organizations can deploy PLM fit for their purposes.

    About the authors

    This guide was co-authored in collaboration between Tribold Limited and Telecom New Zealand. It was

    compiled based on the experience of both organizations in defining, tailoring, adopting, and deploying PLM

    frameworks in the digital world:

    Catherine Michel, Tribold

    Sharon Lynch, Tribold

    Kiran Amin, Tribold

    Ella Obreja, Telecom New Zealand

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    Product Lifecycle Management - An Introductory Guide

    1. PLM in the Digital Economy

    Competing in the increasingly commoditized digital service industry, providers are

    commercially compelled to seek more ways in which they can reduce their time- and cost-to-

    market, while improving innovation and quality.

    With subscriber saturation in the communications sector at an all-time high, the emergence of

    multi-service providers from non-traditional sources, the convergence of user interfaces, and

    increasing network abstraction, the pressure is on to execute a product strategy that delivers

    simplification and accuracy, personalization without customization, reliability, and flexibility at

    a low cost.

    These objectives are demanding a strategy that specifically answers a multitude of business

    critical questions, such as:

    How do I effectively exploit existing capabilities into more competitive and attractive

    market offers?

    How do I quickly introduce new capabilities on top of existing infrastructure?

    How do I ensure that my customers experience is a satisfactory one, from the point of

    order to the point of use?

    What can help me manage existing product lines, while launching new ones, without

    disrupting business as usual?

    How do I simplify the product development process to reduce the cost and time it

    takes?

    How do I bring the business and IT factions together to collaborate on more effective

    offerings?

    How do I assure compliance with tax and regulatory rules for transparency and

    traceability?

    To answer these questions and respond to the intensifying pressure, service providers are

    increasingly focused on deploying a discipline that is turning under-managed capabilities and

    fractured processes into a coordinated effort to design, develop, deploy, and maintain the

    products around which their business is centered.

    In this context, Product Lifecycle Management (PLM) is the key to effectively and efficiently

    innovate and manage a companys products and related services and resources to assure

    ongoing sustainability and profitability.

    1.1. The Background to PLM

    PLM has its roots back in the 1960s, when product marketing was becoming better

    understood and managed. The marketer and university professor E. Jerome McCarthy

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    Product Lifecycle Management - An Introductory Guide

    proposed a simplified version of the previously published Marketing Mix concept, suggesting a

    four Ps classification to articulate a companys market offering: Product, Price, Place, and

    Promotion:1

    Product An item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service.

    Price The amount a customer pays for the product.

    Promotion The methods of communication that a marketer may use to provide information to different parties about the product.

    Place The distribution of the product at a place that is convenient for consumers to access.

    The 4 Ps have evolved into the 4 Cs (Consumer, Cost, Communication, and Convenience), but

    the implications are the same: these are the fundamentals with which a company defines

    what it is selling and how it goes to market with it. How to manage these fundamentals is at

    the core of any companys Product Management strategy.

    A few years on from the 4Ps, the Product Lifecycle Model was first published by Harvard

    professor Raymond Vernon. Vernon observed five stages in the lifecycle of a product, with

    each stage having specific implications on how products are manufactured and traded across

    local and international markets2:

    Stage 1: Introduction

    Stage 2: Growth

    Stage 3: Maturity

    Stage 4: Saturation

    Stage 5: Decline

    Figure 1 Product Maturity Lifecycle. Source: Tribold Limited.

    1 McCarthy, Jerome E. (1960). Basic Marketing. A Managerial Approach. Homewood, IL: Richard D. Irwin. 2 Raymond Vernon (1966). International Investment and International Trade in the Product Cycle, The Quarterly Journal of Economics, Vol. 80, No. 2, pp. 190-207.

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    Product Lifecycle Management - An Introductory Guide

    This model was gradually adopted by economics and marketing theorists as a way to describe

    and define more generically the product lifecycle management concepts and principles in the

    product development and product management domains.

    Institutionalized adoption of PLM, however, did not occur until the 1980s, when it was taken

    up primarily by the automotive industry. This effort was in response to the cyclical market

    reality, as defined above, that the U.S. automotive industry was facing and therefore its need

    to compete at lower costs.

    In other words, in the face of stiff competition and changing market conditions, companies

    asked, How do I take my companys 4 Ps and improve upon them using a process that

    reduces my time and cost to market, while preserving innovation and quality?

    The answer was found in the use of tools such as CAD (computer aided design), CAM

    (computer aided manufacturing), CAE (computer aided engineering), and PDM (product data

    management). Eventually, PLM as a discipline in practice emerged from the tools and activities

    geared specifically towards engineering.

    As these technologies evolved and moved beyond just the automotive industry, they became

    the backbone of modern day PLM, which is the creation and central management of all

    product data and the technology used to access this information and knowledge. But PLM has

    grown to mean more than just the use of these tools; it is now viewed as the integration of

    these tools with methods, people, and processes through all stages of a products life.3

    The same pressures weighing on the automotive industry of the 1980s challenge the Digital

    Economys communications, media, and high-tech providers of today.

    1.2. PLM Defined

    In the broader organizational context, PLM is considered one of the core competencies of the

    Product Management domain, which is the overall area responsible for the organizations 4 Ps.

    As defined by TM Forums Frameworx Application Framework (TAM), Product Management

    contains four key facets4:

    Product Strategy/Proposition Management

    Product Catalog Management

    Product Lifecycle Management

    Product Performance Management

    3 Teresko, John (21 December 2004). "The PLM Revolution". IndustryWeek. Retrieved 26 September 2012. 4 TM Forum document GB929, GB929-CP. www.tmforum.org.

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    Product Lifecycle Management - An Introductory Guide

    Figure 2 Application Framework Product Management Domain. Source: TM Forum.

    In practice, PLM actually extends across the other Product Management competencies in

    terms of managing how those activities interoperate to produce a successful strategy around

    the 4 Ps. The transcendence of PLM underpins the premise of this document:

    Figure 3 PLM across the Product Management Domain. Source: Tribold Limited.

    1.2.1. Product Data Management at the PLM Core

    As previously mentioned, Product Data Management (PDM) as a discipline and as a capability

    existed before PLM. For manufacturing, managing the underlying data that defines the

    specifications of a product was seen as a critical component to managing the production of

    that product.

    PDM for the digital economy can be viewed as the equivalent to the Product Catalog

    Management competency in the Application Frameworks Product Domain, as identified

    above. PDM is an even more fundamental competency in the digital world, where products

    Product Management

    PLM

    Product Strategy Product Catalog Management

    Product Performance Management

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    Product Lifecycle Management - An Introductory Guide

    are largely intangible services and therefore data driven in their logical design, physical

    composition, and customer use.

    So a large portion of managing the product in this case is really managing the data that

    comprises the product specification, which can be viewed as the following elaboration of the 4

    Ps:

    What is being sold

    What it comprises

    How it is sourced, fulfilled, and supported

    To whom it is being sold

    For what cost is it being sold

    How it is sold

    How it is used

    How it is tracked

    How it is rated, taxed, and invoiced

    How it is paid for and booked

    How it should perform

    The resources that support the products services are important as well. So when referring to a

    product in the digital economy, the product is often more of a product composite that can be

    depicted by the following model:

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    Product Lifecycle Management - An Introductory Guide

    Figure 4 Product Model. Source: Tribold Limited.

    In essence, the product composite is ultimately made up of attractive commercials (Offer),

    with great features (Product), that are based on the latest technologies (Service), using the

    best devices and networks (Resource).

    Each of these elements, including Offer, Product, Service, and Resource, contains Data

    (information) made up of discrete logical entities with characteristics, values, and rules that

    together deliver or enable a specific experience for the customer.

    These elements together comprise the Product Model. Delineating the product composite into

    a clear model on which specifications can be defined, stored, and managed is a core objective

    of PDM. The Product Model is the blueprint for structuring the product data in a modular,

    flexible, and most importantly, reusable way.

    As a common reference source to illustrate the model, the Frameworx Information Framework

    (SID) offers a set of standard definitions for the Offer, Product, Service, and Resource data

    entities relevant to the digital industry5:

    5 TM Forum document GB922 0-P, GB922-CP. www.tmforum.org.

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    Product Lifecycle Management - An Introductory Guide

    Figure 5 Information Framework (SID) Data Domains. Source: TM Forum.

    The data definitions from the Information Framework can be used as a comprehensive

    guideline for establishing the organizations common model for Product. They can be tailored

    to suit the organizations physical implementation of the PDM model:

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    Product Lifecycle Management - An Introductory Guide

    Figure 6 Information Framework Product-Service-Resource Associations. Source: TM Forum.

    Specifically, the Information Framework provides the following support for a common Product

    Model:

    Standard way of structuring, defining, and implementing information and behavior

    Consistent common terminology

    Reuse of investment

    Single representation from which technology-specific data models can be derived

    ServiceUti lizes

    CustomerFacingService

    Product

    0..n0..n 0..n

    ProductReferences

    0..n

    0..1

    0..n

    0..1

    0..n

    ProductHasCustomerFacingServices

    ResourceFacingService

    0..n1..n 0..n1..n

    CFServiceRequiresRFServices

    ServiceSpecification

    0..n0..n 0..n

    InvolvedServiceSpecs

    0..n

    Service1 0..n1 0..n

    SpecifiesService

    ProductOffering

    1 0..n1 0..n

    ProdOfferDescribes

    CustomerFacingServiceSpec

    10..n

    10..n

    SpecifiesCustomerFacingService

    PhysicalResourceSpec

    ProductSpecification

    0..n0..n 0..n0..n

    ProdSpecReferences

    1

    0..n

    1

    0..n

    ProdSpecMadeAvailableAs

    0..n

    0..n

    0..n

    0..n

    ProductSpecDefinesCFSSpecs

    0..n

    0..n

    0..n

    0..nProductSpecDefinesPRSpecs

    Resource

    0..n

    0..n

    0..n

    0..n

    ResourceSpecification0..n

    0..n

    0..n

    0..n

    InvolvedResourceSpecs

    1 0..n1 0..n

    SpecifiesResource

    ResourceFacingServiceSpec

    1 0..n1 0..n

    SpecifiesResourceFacingService

    0..n 1..n0..n 1..n

    RequiresResourceFacingServiceSpec

    1

    1..n

    1

    1..n

    RFServiceSpecHasResourceSpecs

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    Product Lifecycle Management - An Introductory Guide

    The data reproducibility and repeatability of the Product Model is critically important for when

    specifying products with the aim of supporting the key goals of PLM:

    Standardization: a common design language between customers, product managers,

    and the rest of the organization

    Simplicity: a single repository for all products

    Profitability: leveraging reusable components to deliver low cost/high yield offers

    Intelligent customer solutions: from a reactive to a proactive solutions set

    Hence, the PDM application is considered one of the most important elements of a strong PLM

    practice. It can manage the entire Product Intellectual Capital created and used in the PLM

    environment, most importantly the Product Data. PDM gets the Product Data under control.

    There are many different functions that the PDM application can provide, from data federation

    (configuring and storing product models) to actual lifecycle management (sign off and approval

    workflows, project management, updates, and design and build integration).

    Below are some of the key benefits of a PDM application, which is the equivalent of the

    Product Catalog Management facet of the Application Frameworks Product Management

    domain6:

    Description Benefit

    Product data

    management

    Provide a single, controlled vault for product data.

    Maintain different views of product data structure e.g.

    Product Model.

    Provide fast, real-time access to product data.

    Manage complex Product Model configurations.

    Reuse of product data Reuse existing Product Model designs for new products.

    Reduce duplication of product data.

    Workflow management Ensure the appropriate PLM process is followed.

    Improve distribution of product data to relevant

    functional areas.

    Provide transparency of PLM activities and PLM stages

    related to a product.

    Ensure PLM engagement and RACI is followed.

    Enable agile PLM governance and decision-making

    processes.

    6 John Stark. Product Lifecycle Management, 21st Century Paradigm for Product Realisation. Springer, 2011 content has been adapted from the book.

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    Product Lifecycle Management - An Introductory Guide

    Description Benefit

    Overall business

    performance

    improvement

    Improve product quality.

    Reduce overhead costs.

    Functional performance

    improvement

    Increase PLM productivity.

    Reduce product inventory.

    Develop better cost estimates.

    Better management of

    PLM activities

    Improve project coordination.

    Increase the reliability of PLM plans and roadmaps.

    Provide high-quality management information.

    Automation of PLM

    activities

    Automate the PLM process, including approvals and sign-

    offs.

    Automate the exchange of product data.

    Integration of OSS/BSS Integrate Islands of Data and Automation.

    Link databases and systems, for example, PDM with

    Business Intelligence.

    Remove unnecessary systems.

    Table 1 Benefits of PLM. Source: John Stark.

    1.2.2. Holistic PLM

    Products define a company. Without products, there will be no customers and no revenues. So

    without its products, a company would not exist.7

    PLM enables a company to be in control of its products across the different stages of their

    maturity and marketability.

    As such, PLM can be defined as a controlled framework for managing the entire lifecycle of the

    product and its underlying components. This includes all of the processes required to design,

    build, deploy, maintain, and ultimately, retire the product.

    7 John Stark. Product Lifecycle Management, 21st Century Paradigm for Product Realisation. Springer, 2011 content has been adapted from the book.

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    Product Lifecycle Management - An Introductory Guide

    Figure 7 Simple PLM Framework. Source: Tribold Limited.

    Generally, these activities require a significant degree of collaboration across the company.

    When thinking about the company itself, in simple terms, it is organized into functions sales,

    marketing, manufacturing, customer services, operations, and so forth. Peoples jobs have

    been created and defined based on those specific functions, for example, sales representative

    or customer service representative.

    As business models evolve, a great deal of effort and focus is placed on increasing efficiencies

    in these functional areas by introducing information and information systems to help these

    functions do their work.

    Although operational improvements can be made individually in each of these areas, such

    initiatives suffer from the law of diminishing returns: while one factor is improved or

    enhanced, all the other factors stay the same. You then battle against the silo approach,

    disjointed business processes, a mishmash of systems and lack of collaboration among

    organizational departments and teams.

    It is a common occurrence across many organizations, grappling with oceans of information

    and complex technology ecosystems, for functional areas to become isolated silos with little

    communication and coordination between them. This is an especially critical challenge in fast-

    moving industries such as ours, which are struggling to catch up with ever-changing customer

    demands at the expense of shrinking margins.

    PLM holds the promise of improving product efficiency through a cross-functional, holistic

    approach. By linking different functional areas through shared information, PLM can help

    Idea

    Plan

    Design

    Build & Test Launch

    Maintain

    ReVre

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    Product Lifecycle Management - An Introductory Guide

    break down the silo perspective and unlock the organization.8 Sharing of information through

    an integrated PLM framework is especially powerful: once the information capital is in place, it

    can be reused, reconfigured, and reutilized, and ultimately easily replaced without braking or

    reconstructing the whole system, thus enabling a flexible, dynamic, and agile business model.

    More holistically, PLM combines people, technology, processes, and data into a strategic

    business approach for developing and managing products across the enterprise, taking them

    from the cradle to the grave. Holistic PLM is therefore underpinned by five core building

    blocks:

    People Puts product practitioners at the center of the approach with clear, simple,

    and usable functions across the entire lifecycle. It empowers people and teams to

    develop ideas that are meaningful to customers.

    Product Information Securely stores and manages the integrity of product

    information (product-service-resource) and all the outputs (for example, internal

    documentation, collateral, service agreements) to allow management of product,

    including performance at the product-line level.

    Process Facilitates execution of the collaborative process used across the product

    functions to drive the lifecycle of products from initiation to retirement, including

    strategy, planning, product management, product service, and experience.

    Governance Enables an agile, fit-for-purpose PLM Framework with clear roles,

    accountability, and a lean governance and decision-making model.

    Tools Enable an integrated and collaborative product management ecosystem.

    8 Michael Grieves. Product Lifecycle Management. McGraw-Hill, 2006.

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    Product Lifecycle Management - An Introductory Guide

    Put into practice as part of a broader, more holistic PLM Framework, these building blocks

    provide the basis on which the organization can strategize, implement, and manage products

    according to market and competitive demands:

    Figure 8 Holistic PLM Framework. Source: Tribold Limited.

    Develop Product Strategy. The activities necessary to develop the product strategy to

    meet the overall company revenue and competitive targets. The organization will

    analyze product and market data in progress and future product initiatives and

    operational objectives to arrive at the desired product portfolio. This desired product

    portfolio is matched up with the budget planned for product development, and a

    product development plan is created for a period of time (quarter, annual, etc.). The

    product strategy is a fundamental function of PLM because it ensures that the

    organizational resources (people, technology, and budget) are focused on developing

    and managing the products that are the most profitable for the company.

    Design and Develop Products. The activities necessary to execute the product

    strategy. Resources from across the organization work together to deliver the new

    and updated products as outlined in the overall product portfolio plan and strategy.

    The organization works together across functional areas, according to the pre-

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    determined responsibilities and processes to meet the product marketing and launch

    plans.

    Monitor and Update Products. The activities related to ensuring that the desired Key

    Performance Indicators (KPIs) are measured and monitored to achieve the desired

    operational results. Includes continually reviewing and analyzing product performance

    data to make intelligent, quantified decisions about the lifespan of a product and any

    changes that should be made prior to full retirement.

    PLM brings together an eclectic mix of organizational responsibilities, information, and

    workflows in a structured and holistic way to deliver on the 4 Ps. The efficiencies, or

    improvements, triggered from a PLM implementation across the enterprise often relate to

    four key areas:

    Figure 9 Goals of PLM. Source: CIMdata.

    Cost Reduction. Organizations are looking for PLM to increase business value through

    higher revenue margins against the bottom line profits.

    Time Management. By improving collaboration and establishing a consistent

    product development process across the business, organizations are looking to

    reduce the time required to define and deliver new products and manage existing

    ones.

    Innovation. Organizations are looking for PLM to improve the business by enabling

    more innovation at the idea stage, producing better product designs, increased reuse,

    improved standards and consistency, and clearer visibility and management of

    product data.

    Quality Improvement. Organizations are looking for PLM to produce a better end

    result that meets the market and customer requirements and uphold a reputation for

    excellence and reliability thus reducing any faults through the design, implement, and

    testing stages.

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    2. Making PLM Happen

    The practice of PLM is based on an information-driven approach to managing a companys

    Product Intellectual Capital, represented as Product Data (the fabric of products: product

    model/product architecture) and Product Knowledge (analytics, collateral).

    When deploying PLM across the organization to manage these aspects of the Product, PLM

    deployment should be considered across three dimensions:

    Figure 10 Dimensions of PLM Deployment. Source: Telecom New Zealand.

    Mechanics: the Data and Systems domain. The capture, structure, storing, and

    maintenance of the Product Intellectual Capital in the Product Data Manager vault,

    where the Product Data and Product Knowledge are stored.

    Dynamics: the Process domain. The flow and exchange of Product Data and Product

    Knowledge across the organization and how it is managed and maintained throughout

    the lifecycle of the product.

    Humanics: the People domain. The functions that own, exchange, and maintain the

    Product Intellectual Capital and the processes that are used to manage it.

    Mechanics: Data Domain

    Dynamics: Process Domain

    Humanics: People Domain

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    Product Lifecycle Management - An Introductory Guide

    Standing up a successful PLM practice across the organization therefore involves:

    A simple, structured Product Model to organize product intellectual information and

    eliminate complexity where the Product Model is used for all products and stored and

    managed in the Product Data Manager.

    A dynamic, flexible set of Product Workflows with clear functions to manage the

    Product Intellectual Capital from cradle to grave, where Product Workflows make up

    the Product Lifecycle Management for all products.

    An organizational alignment to ensure a resource focus on effectively managing the

    product model and the product workflows.

    2.1. PLM Reference Frameworks

    Rather than starting from a blank page to define and deploy the different facets of a holistic

    PLM approach, your best bet is to start with a pre-defined reference framework.

    Depending on the industry, there already exist relevant reference frameworks that help to

    decompose the different facets of PLM. For communications, media, and high tech providers,

    there are at least three reference points available.

    These reference points are not mutually exclusive, but rather complementary in defining the

    dimensions of PLM across the different functions of the organization, and can be used as

    valuable input into determining how PLM should be deployed into your organization:

    eTOM (Business Process Framework)

    ITIL (Information Technology Infrastructure Library)

    SDLC (Software Development Lifecycle)

    Each of the above frameworks is only briefly described in the subsequent sections, primarily to

    delineate their relevance to PLM. The source material is extensive and should be examined for

    use as benchmarks and blueprints.

    2.1.1. Business Process Framework (eTOM)

    The Business Process Framework (eTOM) is a comprehensive, industry-agreed, multi-layered

    view of the key business processes required to run an efficient, effective, and agile enterprise

    specifically for the Digital Economy. It is the most widely accepted and adopted standard for

    business processes in the industry, providing a business process model/framework for use by

    operators, service providers, and other organizations in the ecosystem. The Business Process

    Framework, a critical component of Frameworx, has been created and agreed by industry

    leaders and practitioners.

    PLM is a well-defined domain in the Business Process Framework, which identifies key PLM

    business processes across a number of organizational competencies that support the

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    Product Lifecycle Management - An Introductory Guide

    marketing, offer, service, and resource management of the product, the relevant components

    of which are highlighted in blue in the diagram below9:

    Figure 11 Business Process Framework with PLM Designations. Source: TM Forum.

    Figure 12 Business Process Framework PLM Domain. Source: TM Forum.

    9 TM Forum document GB921-P, GB921-CP. www.tmforum.org.

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    Product Lifecycle Management - An Introductory Guide

    PLM in the Business Process Framework is formally defined as end-end processes to manage

    products to the required profit and loss margins, customer satisfaction, and quality

    commitments, as well as delivering new products to the market. These lifecycle processes

    understand the market across all key functional areas, the business environment, customer

    requirements, and competitive offerings in order to design and manage products that succeed

    in their specific markets. Product Management processes and the Product Development

    process are two distinct process types. Product Development is predominantly a project-

    oriented process that develops and delivers new products to customers, as well as new

    features and enhancements for existing products and services.

    Ultimately, the utilization of the Business Process Framework is intended to:

    Create a common language across the organization

    Add standard structure, terminology, and classification

    Apply discipline and consistency across departments

    Understand, design, develop, and manage IT applications in terms of business process

    Create consistent and high quality end-to-end processes

    Identify opportunities for cost and performance improvement

    The Business Process Framework highlights that PLM is a core process of the overall functions

    vital for the operations of a company. The Framework is aligned to the Information Technology

    Infrastructure Library (ITIL).

    2.1.2. Information Technology Infrastructure Library (ITIL)

    The Information Technology Infrastructure Library (ITIL) is a set of practices for Information

    Technology Service Management (ITSM) that focuses on aligning IT services with the needs of

    the business. ITIL describes procedures, tasks, and checklists that are not organization-specific,

    which organizations use to establish a minimum level of competency. It allows the

    organization to establish a baseline from which it can plan, implement, and measure. It is used

    to demonstrate compliance and to measure improvement. ITIL advocates that IT services must

    be aligned to the needs of the business, allowing for the organization to establish a baseline

    from which it can plan, implement, and support the IT services.10

    10 itSMF. An Introductory Overview of ITIL V3. Published 2007.

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    Figure 13 ITIL Service Lifecycle. Source: ITIL/itSMF.

    The relevance of ITIL to PLM is the generic service lifecycle that ITIL seeks to manage. ITIL

    publishes five core guides that map the entire ITIL Service Lifecycle, beginning with the

    identification of customer needs and drivers of IT requirements, through to the design and

    implementation of the service into operation and finally, on to the monitoring and

    improvement phase of the service.

    Where ITIL focuses on the activities to deliver within IT against business requirements, the

    Business Process Framework focuses on the overall organizational processes that drive out

    those activities.

    It is in this IT Service-to-Business Process vein that the ITIL standards around service lifecycle

    and change management comfortably complement the Business Process Frameworks PLM

    process standards. ITIL highlights that the detailed processes of PLM need to be incorporated

    into the overall IT fabric of the organization.

    This relationship is supported by the recent efforts by both TM Forum and ITIL to map the

    mutual process models to each other:

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    Product Lifecycle Management - An Introductory Guide

    Figure 14 ITIL to PLM Mapping. Source: TM Forum.

    ITIL ultimately seeks to deliver benefits similar to the Business Process Framework:

    Improved IT services

    Reduced costs

    Improved customer satisfaction through a more professional approach to service

    delivery

    Improved productivity

    Improved use of skills and experience

    Improved delivery of third-party service

    2.1.3. Software Development Lifecycle (SDLC)

    Software Development Lifecycle (SDLC) is the process or method applied to create or alter

    software projects. It defines the way to create a new software module or program11. The

    different models of SDLC (Waterfall, Spiral, Agile, Incremental, and so forth) each have a

    process flow that defines the design, build, and test efforts that guide the software

    development project. For this reason, SDLC is typically a model that is adopted primarily by IT

    organizations:

    11 http://www.sdlc.ws/what-is-sdlc/.

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    Product Lifecycle Management - An Introductory Guide

    Figure 15 Software Development Lifecycle. Source: Wikimedia Commons.

    In the context of PLM and the broader organization, SDLC can be viewed as a subset of

    processes within the whole PLM framework. When the delivery of a products capabilities

    depends on the creation or modification of software, the activities of SDLC support the Design

    and Implementation stages of PLM.

    It is logical that the SDLCs flow conceptually mirrors that of PLM: software has a lifecycle that

    needs to be managed in and of itself but also in the context of the broader purpose it serves,

    which is the Product.

    Getting the organizations product management activities working in concert with the SDLC

    models activities is a key objective of the Holistic PLM Framework.

    There are also some synergies between the SDLC framework and the service development

    principles established in TM Forums SES TR168, Software Enabled Services Management

    Solution and Frameworx Relationships, Version 1.5. Of particular relevance are the lifecycles

    and roles defined here:

    http://www.tmforum.org/browse.aspx?linkID=46857&docID=15788

    Note: additional work is expected to align the SES Lifecycle Management work included in TM

    Forums SES TR168 and the PLM work outlined in this document.

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    2.2. Standing up PLM

    2.2.1. Establishing the PLM Foundation

    The purpose of the PLM Framework is to streamline the organization through a structured,

    dynamic, and human way to make Product change happen faster while enabling value creation

    for the customers and the company.

    So any discussion on how to deploy PLM within an organization to achieve that value creation

    needs to begin with what the product lifecycle actually is and means to the company.

    One example of how to understand the implications of PLM for the organization is to refer

    back to the five building blocks of Holistic PLM described earlier.

    When taken in turn, each building block can comprise specific components or bite-sized

    chunks that make a specific contribution to the design and maturity of PLM:

    Figure 16 Holistic PLM Building Blocks. Source: Telecom New Zealand based on Detecon Model12.

    As the building blocks are further decomposed, you can ensure correct alignment with key

    processes to organizational responsibilities. The net result is to deliver a connected Product

    operating system with the building blocks working together to achieve a common purpose:

    12 Building Blocks Design Blueprint based on the Detecon Consulting PLM Framework; Detecon Consulting. Next Generation Telco Product Lifecycle Management: How to Overcome Complexity in Product Management by Implementing Best-Practice PLM. September 2010.

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    Product Lifecycle Management - An Introductory Guide

    Figure 17 Organization & Process Alignment. Source: Telecom New Zealand.13

    The outcome is a PLM Framework that brings together all of the stages of the product lifecycle,

    from idea through to retirement. The framework connects all the touch points of the product

    lifecycle across the organization, from customer through to IT platform, ensuring that that

    product information is captured, shared, and managed without any gaps.

    The ultimate objective is performance improvement in the way of14:

    Time Decrease time to market, decrease waiting time, and decrease delay in

    delivery to the customer

    Cost Reduce execution cost, increase human resource performance, and decrease

    churn rate

    Process quality Increase PLM process performance, increase customer value

    performance, increase value net performance, and increase information availability

    and accuracy

    Product quality Improve product launch quality, increase provisioning performance,

    reduce technical defects, and increase service quality

    2.2.2. PLM Design Principles

    When developing a PLM Framework for your organization, it is important to establish a set of

    principles to guide the design of the framework. The design principles need to be specific and

    then socialized, agreed to, and endorsed by the appropriate leadership and bought into by the

    key stakeholders.

    Examples of such principles are as follows:

    13 Organization & Process Alignment Local & Global. Julian Lonsdale, Telecom New Zealand. 14Detecon Consulting. Next Generation Telco Product Lifecycle Management: How to Overcome Complexity in Product Management by Implementing Best-Practice PLM. September 2010.

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    # Principle Description What this means to the

    organization

    1 PLM is strategic

    and holistic

    Spans across all Product

    functions, and all lifecycle

    stages of the product, from

    cradle to grave.

    A consistent set of processes,

    methodologies, and tools to

    manage the lifecycle of products

    and product-related initiatives.

    2 PLM Is designed

    with the end in

    mind

    Focus is on the outcomes,

    with the aim of creating a

    path to mature the Product

    practice.

    A clear set of outcomes to

    ensure an efficient realization of

    the PLM process across all

    domains and workflows.

    3 PLM realization

    uses prototyping

    and

    human/customer

    centered design

    Connects the company with

    its customers through co-

    creation and an agile,

    iterative approach to

    product development.

    Best practice methodologies and

    tools to be able to turn

    opportunities and ideas into

    value for the customer and the

    company.

    4 PLM is information

    based

    Delivers a structured,

    information-driven approach

    to managing the Product

    Intellectual Capital, aligned

    with best practice

    international standards, e.g.

    eTOM.

    A structured, consistent and

    repeatable methodology to

    manage the Product Intellectual

    Capital in a Single Source of

    Truth Product Data Manager.

    5 PLM is a process

    with a human-

    centered design

    Puts product creators and

    managers at the center of

    the new model with clear,

    simple and usable processes

    across the entire lifecycle.

    A simple, usable PLM framework

    that is optimized to match the

    needs of peoples roles.

    6 PLM creates a path

    to maturity

    The PLM process can be

    both manual and

    automated.

    An introduction to the PLM

    framework in bite-size chunks

    to minimize disruption and

    complexity.

    7 PLM enables

    Product process

    and practice

    harmonization

    with the wider

    company

    ecosystem

    Is in synergy with the

    relevant processes and

    functions within the wider

    company ecosystem.

    Interfaces and tools working

    seamlessly with the wider

    company ecosystem.

    Table 2 PLM Design Principles. Source: Telecom New Zealand.

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    2.2.3. Example PLM Process Models

    Understanding what PLM processes to execute on to deliver the Product and its resulting value

    creation is the ultimate goal of a PLM framework.

    It is the PLM process model that helps to define those processes, how they are to be executed,

    and by whom.

    A process model encompasses a functionally similar grouping of processes together into a

    complete set of activities. It is intended to be used repeatedly against the grouping of

    functions. In this case, the PLM process model is the set of repeating processes grouped

    together to achieve an organizational PLM practice. A process model helps to depict how the

    processes will work together, while the detail lies within the actual processes. A process model

    should be descriptive, prescriptive, and explanatory.

    Some example process models are highlighted in the following sections.

    Tribold PLM Process Model

    The Tribold PLM Process Model breaks down the Holistic PLM Framework described earlier at

    the Level 1 and Level 2 layers into an increasingly detailed layer of processes. The resulting

    Level 3 processes are grouped within key functions in the order in which they logically flow. At

    a high level, you can then understand how the PLM processes would flow through the

    organization.

    Figure 18 PLM Process Model. Source: Tribold Limited.

    The detail that underpins the Level 3 processes forms the activities that deliver on those

    process objectives:

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    Product Lifecycle Management - An Introductory Guide

    L2 Process L3 Process Description

    Develop Product

    Strategy

    Analyze Market

    Data and Product

    Portfolio Data

    Gather and analyze market and competitive

    data as an input to the product portfolio

    strategy.

    Establish Market

    and Product

    Strategy

    Focus on the strategic, long-term vision and

    product plan for the future.

    Develop Product

    Portfolio

    Manage the product portfolio roadmap and

    make decisions that align with the strategy.

    Develop Product

    Plans

    For each product that has been included in the

    product portfolio, develop the implementation

    plan including effort, timeline, and resources.

    Manage Product

    Portfolio

    Manage the product implementation plans to

    ensure the products are delivered as scheduled.

    Design &

    Develop

    Products

    Generate Product

    Ideas

    This is a continuous, systematic search for new

    product opportunities involving sources of new

    ideas and methods for generating them.

    Includes the capture of requirements.

    Develop High-

    Level Concept

    Turning the idea /mockup of requirements into

    a high-level design that screens the suitability of

    the new idea into a realistic form/feasibility.

    Develop Detailed

    Concept

    Enhancing the high-level concept through

    further analysis that clearly and accurately

    describes the business and technical design to a

    lower level of detail to meet the requirements.

    Implement

    Product

    Build and test the product design ensuring the

    development and ultimately the testing carried

    out ensure the product is fit for purpose.

    Product Launch

    The distribution of product data from Tribold to

    target applications.

    Monitor &

    Update Product

    Data

    Develop &

    Generate Product

    Reports

    Create product reports that provide useful

    information.

    Track Product

    Performance &

    KPIs

    Through the use of analytical tools to asses and

    analyze product performance against the KPIs.

    Analyze Product

    Report Data

    Performing a deep dive of product reports that

    determine ongoing product development but

    also as input to innovate new product

    development.

    Identify Product

    Update

    Opportunities

    Following any analysis, the outcome that

    identifies product change, including retirement

    and grandfathering opportunities.

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    L2 Process L3 Process Description

    Submit Updates to

    the Product

    Portfolio

    Steps carried out to implement the new

    changes.

    Table 3 Holistic PLM Framework Level 2/3 Processes. Source: Tribold Limted.

    Telecom New Zealand Process Model

    The Telecom New Zealand process model aligns what it terms as Pathways to the inputs and

    outputs of a particular stage in the lifecycle of products. A PLM Pathway has a clear purpose

    and describes the lifecycle of events that lead to the delivery of an outcome.

    Figure 19 PLM Pathways. Source: Telecom New Zealand.

    The process model provides a clear connection between the business PLM processes you are

    trying to execute as part of Product Management and the underlying IT processes that help to

    achieve the desired outcomes. It is then easy to understand at a high level the key functions of

    the PLM process model, the required inputs and expected outputs, and interactions with the

    required IT processes.

    IDEA DEFINE REALISE SUPPORT/ENHANCE RETIRE

    (1) Insight to Strategy

    (2) Strategy to

    Plan

    (7) Performance

    to Insight

    (3) Idea to

    Definition

    (4) Definition to Realisation

    (5) Realisation to Launch

    A PLM Pathway is a logical grouping of inputs and outputs within a specific functional domain. A

    PLM Pathway has a clear purpose and describes the lifecycle of events

    that lead to the delivery of the outcome.

    (6) Launch to Change

    PLM Pathways

    GLOBAL

    LOCAL

    PORTFOLIO STRATEGY

    PORTFOLIO PLANNING

    PRODUCT 2 MARKET

    PRODUCT MANAGEMENT

    PORTFOLIO PERFORMANCE

    PRODUCT LIFECYCLE MANAGEMENT FRAMEWORK

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    Product Lifecycle Management - An Introductory Guide

    Figure 20 PLM Process Model. Source: Telecom New Zealand.

    2.2.4. PLM Stages and Gates

    Product innovation begins with an idea and ends with the successful launch of a new product. The stages between the idea and launch can be check-pointed by gates.

    Stages are where the action occurs. Gates are where the decisions are made. The players on the project team undertake key tasks to gather information needed to advance the project to the next gate or decision point.

    Stages are cross-functional (for example, there is no specific Research and Development or Marketing stage), and each activity is undertaken in parallel to enhance speed-to-market. To manage risk, the parallel activities in a certain stage must be designed to gather vital technical, market, financial, and operations information to drive down the technical and business risks. Each stage costs more than the preceding one, resulting in incremental commitments. As uncertainties decrease, expenditures are allowed to rise and risk is managed.

    Gates are employed at major decision points in each stage, where a strategic decision should be made on whether and how to proceed with product development and deployment. Decisions at the gates typically involve executive or steering committee level personnel who are responsible for ensuring the products align with the organizations strategic goals and objectives:

    Figure 21 PLM Stages/Gates. Source: Tribold Limited.

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    Gate 0 The ideas technical, economic, and financial feasibility is scrutinized. In this

    way, it is possible to understand if the new product complies with the

    companys strategy and if an explicit customer benefit is in evidence.

    Typically, a governing board has a crucial role in this stage because it sees if

    the new ideas are in accordance to the strategic direction followed by the

    company.

    Output: Idea is ready for Planning

    Gate 1 A rough concept with a description of the product and of the customers

    benefit in detail is presented. A coordination of the basic technical feasibility

    and a formulation of the first cost estimation take place. For the

    implementation of the project there is an approximate delineation of the

    operating plan. Setting the market estimation with market-intelligence tools

    and the product placement provides the initial information about the

    probability of success on the market. The valuation of legal and regulatory

    aspects is especially important and is estimated here.

    Output: Plan is ready for Design

    Gate 2 The product concept is completed and any other relevant conceptual design.

    Creation of business cases and formulation of KPIs are other significant

    cornerstones of this milestone. The general scope of the project is established

    with the detailed project plan (time, resources, efforts, reporting, and

    performances prosecution).

    Output: Design is ready for Build & Test

    Gate 3 The product is built and tested. An examination of possible deviations or

    differences in comparison with the plan (time and cost) is done here. In some

    cases, a project review at management level is necessary.

    Output: Build is ready for Launch

    Table 4 PLM Gate Definitions. Source: Tribold Limited.

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    The structure of each gate is similar:

    Deliverables: Inputs into the gate review. What the project leader and team deliver to

    the meeting. These are defined in advance and are the results of actions from the

    preceding stage. A standard menu of deliverables is specified for each gate.

    Criteria: What the project is confronted with to make the go/no go and prioritization

    decisions. These criteria are organized in a scorecard and include both financial and

    qualitative criteria.

    Outputs: Results of the gate review. Gates must have clearly articulated outputs

    including: a decision (go/kill/hold/recycle) and a path forward (approved project plan,

    date, and deliverables for the next gate agreed on).

    2.2.5. Typical PLM Roles

    Responsibility for executing the processes in each stage depends on the roles defined in the

    framework. Examples of common PLM-related roles include those that follow:

    Role Description

    Product Manager Designs new products (typically within a certain product line)

    and coordinates and manages all product-related changes.

    Typically this role leads any product-related implementation.

    Marketing Manager Coordinates and manages the marketing-related aspects of a

    product change, often involved with product decisions,

    including time schedule, budget, and issue resolution.

    Configuration Manager Manager responsible for creating and managing component

    specifications and managing the underlying data configuration

    of the application.

    Pricing Manager Manager responsible for creating and managing charges, prices,

    and price lists.

    Approvals/Staging

    Manager

    Manager responsible for approving and staging entities

    product entities, generic entities, and charge entities based on

    user permission.

    Launch Manager Manager responsible for launching entities product entities,

    generic entities, and charge entities based upon permissions.

    Business Manager Business Manager with read-only access to all areas.

    Project Manager Manager responsible for defining, tracking, and managing

    project entities.

    IT Lead Coordinates and manages all technical, IT-related changes,

    often involved with service and resource management and then

    product. Used to support Product Management.

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    Product Lifecycle Management - An Introductory Guide

    Role Description

    Customer Services Supports other roles for validation of all changes, being the

    forefront to customers before, during, and after a purchase.

    Communicates requirements for the sales and customer service

    aspects of the product.

    Corporate-Wide

    Operations

    A representative group from across the organization. These

    roles are typically involved in sign off gates in the process. Some

    of the groups are: Legal, Network, Operations, etc.

    Administrator Responsible for administrative aspects of the application,

    including security access.

    Table 5 Typical PLM Roles. Source: Tribold Limited.

    Other examples of relevant roles, specific to the Service Management domain, can be found in TM Forum document GB924, Service Framework Guidebook, V1.0. This guidebook describes the stages and the gates needed for the Service Lifecycle, which has a set of actors involved in the governance of the product composite lifecycle. http://www.tmforum.org/browse.aspx?linkID=28454&docID=2198

    2.2.6. Bringing It All Together

    PLM delivers a structured, dynamic, and human way to make product innovation happen

    faster and enables value creation, sustainably and profitably.

    It is structured, because it simplifies and organizes the Product Intellectual Capital to

    eliminate complexity.

    It is dynamic, because it creates an evolving, flexible system of end-to-end workflows

    to create and manage the Product Intellectual Capital from cradle to grave.

    It is human, because it puts product creators and managers at the center of new

    approaches with clear, simple, and usable functions across the entire lifecycle.

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    Product Lifecycle Management - An Introductory Guide

    Figure 22 PLM In Practice. Source: Telecom New Zealand.

    Most importantly, PLM is collaborative, iterative, and customer centered:

    Collaborative. All of us are smarter than any of us. The fundamental nature of PLM is

    interdisciplinary and therefore requires everyone to be involved in an active,

    participatory way. Today, a typical decision-making or project environment is

    multidisciplinary, and each individual is an advocate for their own function or technical

    specialty, and the idea or product becomes a protracted negotiation among them,

    likely resulting in a gray compromise. In an interdisciplinary team, there is collective

    ownership of ideas, and everybody takes responsibility for them.

    Iterative. Prototyping wins arguments. PLM enables building an idea in bite-size

    chunks rather than trying to get everything done all at once. Instead of debating for

    days whether a new idea is possible or what the best way to build something is, it is

    better to put the idea to the test and run a prototype. The Product Data Manager

    makes this possible. Both Simple (new Offer involving a price change) and Complex

    (new Product) ideas can be prototyped in the Product Data Manager to validate the

    concept. The idea can be tested further by taking the prototype concept from the

    Product Data Manager and building it in a live environment, such as a lab or a

    production network sandpit.

    Experience Centered. The value of the product transcends its basic utility. Customers

    dont need products. They need experiences to satisfy their needs. They apply their

    skills to generate an exchange of value (an interaction/encounter) and obtain

    satisfaction. PLM shifts the focus from the static, often isolated components of the

    marketing process and the mere physical aspects of the product (quality and

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    Product Lifecycle Management - An Introductory Guide

    functionality of the product, brand, price, delivery) to a far more dynamic, integrated

    system, where the customer is at the center of the exchange process, both as an

    active participant and as a co-producer. With this shift, which is part of a wider

    marketing transformation, the value creation process is realized through designing,

    engaging and lasting experiences for the customer.

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    Product Lifecycle Management - An Introductory Guide

    3. PLM Challenges and Opportunities

    As an organization turns its focus to improving its PLM process, it commonly faces some of the

    following cross-industry challenges. These pain points need to be turned into opportunities for

    growth and achieving a sustainable organization. It is important to note that an improvement

    in PLM can range from minor adjustments to major transformation. If an organization focuses

    wisely on the most inefficient areas of the process, broad benefits can be gained.

    3.1. Challenges

    Lack of executive commitment and enforcement of PLM.

    o PLM cannot be successfully implemented and then adopted throughout the enterprise without thorough commitment and endorsement from the

    executive management team. This team should be fully educated and aware

    of what PLM brings to the table.

    o All too often, PLM is something of which people are aware as a concept and principle but are unsure of in terms of the practicality of executing on PLM

    fundamentals. In addition, decision makers may not be clear on how adopting

    a PLM framework can help solve critical problems in the organization.

    Without the executive commitment and understanding, it is difficult to

    enforce any PLM framework that is in place.

    o Individuals in the organization who are responsible for financial and productivity targets related to PLM and understand the benefits of PLM

    should focus on educating executives and decision makers on PLM and seek

    out and achieve endorsement from an executive. Ongoing organizational

    initiatives that support and drive the embedding of the PLM standard and

    areas for improvements should be common.

    Lack of control outside product management/definition process.

    o When a defined PLM process is in operation, it often only controls the activities related to the functional planning, design, and deployment of a

    product, for example product and marketing. There are critical, dependent

    IT/systems processes that are required to be completed or the functional

    product to be launched into market, but these processes are not governed by

    the PLM process.

    o PLM should span across the entire enterprise and typically involves many organizational departments working collaboratively to support all phases of

    the lifecycle. Because business organizations and IT organizations typically

    have different executive leadership, it is critically important that sponsorship

    is achieved from both organizations. Ideally the two (or more) organizations

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    Product Lifecycle Management - An Introductory Guide

    will jointly endorse the enterprise PLM process. The resulting PLM processes

    should encompass all areas in equal detail and understanding and ensure that

    touch points and handoffs between the organizations are clearly understood.

    Lack of definition of the idea generation and planning phase.

    o There is often little structure and rigor around the activities of gathering product ideas and planning and prioritizing those ideas into the strategic

    product portfolio. A fundamental objective for any organization to stay

    competitive and ahead of the ever-growing market needs and customer

    requirements is to be able to support new and innovative ideas and concepts.

    o PLM will help support what should be a repeatable upfront early product stage, allowing for all organizational departments to push forward ideas in a

    coherent, straightforward, and easy manner. A working area where this can

    be managed can pay huge dividends. All too often, good ideas are not

    developed and bad ideas end up in the market, because a process does not

    exist to effectively sift through the ideas to move forward the best, most

    competitive, and lucrative ideas. Innovative organizations are the sustainable

    organizations of the future.

    Synergy across product development projects is not capitalized upon.

    o Due to lack of centralized control, there is often an inability to gain synergy across multiple, related product development projects. This leads to duplicate

    work efforts as well as loss of efficiency.

    o PLM supports not only the governance and centralization of all projects across the organization but provides far better allocation of resources, time,

    and effort, so these projects can be managed and run much more efficiently.

    Also the information and data used across projects can potentially be reused,

    and therefore organizations can avoid reinventing what may already exist,

    whether it is an exact product copy or something very similar.

    Lack of true product data visibility.

    o When organizations are asked what data and information they have on their products and how this information is stored and managed, there is often

    confusion and no clear way of finding this information. It is not uncommon

    for this information to be uncoordinated and fragmented across a number of

    systems and documents and with people who have worked with the products

    for many years.

    o PLM gives clear visibility of this data and information, how it is being used, and for what purpose. With the access to this intellectual capital, the

    organization can manage its information far more accurately to be able to

    make better decisions.

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    No in-life processes that support retiring products.

    o The product portfolio of a company should only contain the products (and associated offers, services, resources) that are actively being sold to

    customers and being maintained for customers. All other products and

    supporting product data should be retired from the available product catalog.

    This retirement includes removing the data and functionality required to

    support those products from all systems, processes, and documentation

    throughout the organization. Unfortunately, this area of PLM is typically

    lacking in definition and execution. Understandably, many companies face

    the dilemma of investing time, budget, and resources towards new products

    to meet competitive demand or retiring a lean product catalog.

    o However, maintaining a lean product catalog that contains only the products that are currently sold and active in the customer base can lead to great gains

    in efficiency and decrease the cost of future software and product roadmap

    goals. It is recommended that a percentage of resources (time, budget, and

    people) are allocated annually to the task of retiring (removing from sale and

    internal support) or grandfathering (removing from sale but supporting for

    the customer base).

    3.2. Benefits and Potential Value

    Some of the financial targets that help to quantify the benefits of a transformative or

    improvement PLM project follow. They are benchmarks that have been underpinned by

    referenceable case studies in the marketplace15:

    Achieving a 50% reduction in the time to market. By reducing the time to market from

    idea to sale of products, organizations can stay ahead of the competition and adapt to

    market trends and customer requirements.

    Achieving a 20% increase in revenues by widening the product portfolio. By having

    more control and management, organizations can add many similar and new products

    onto the portfolio, increasing the customer product choice and attracting new

    customers.

    Achieving a 20% increase in revenues by introducing products faster. By offering

    products faster to the market, products stay in line with demand and increase product

    purchases.

    Achieving a 40% increase in revenues by introducing new products/services on

    existing offerings. By allowing for more variety and customer choice covering all angles

    a customers requirements

    15 John Stark Associates and SofTech, Inc. 10 Critical PLM Facts Every Executive Should Know - Executive Briefing White Paper. July 2006.

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    Achieving a 35% increase in product quality. By allowing for better control of the

    product designs and implementation stages, in particular the testing activities,

    organizations have more rigor, efficiency, and accurate throughput to meet the

    customers high expectations.

    Achieving a 60% reduction in cost to market. By reducing the overall project cost from

    idea to availability for sale, including the cost of resources and how they are being

    utilized, organizations save through the reduction of activities in the product design

    and implementation stages that can bear a heavy cost.

    A Case Study16

    A renowned company in the telecommunications industry carried out an extensive

    restructuring program that would enable it to maintain its position in a deregulated market

    environment. The objective was on the one hand to convert the previously technical-driven

    approach for the product design and an orientation towards technical performance features to

    an approach focusing on the customers needs and requirements. On the other hand, the aim

    was to develop and implement the integrated management approach Next Generation PLM.

    In the initial situation, the PLM and the platform were not state-of-the-art(e.g. no

    withdrawal phase, missing of decision gates, long time-to-market etc.). A portfolio

    management process was not designed and implemented.

    The current portfolio structure was oriented on the organizational or technical structure and

    not organized from the customers point of view. The product portfolio was characterized by a

    large number of product variants and features. All these products needed to be handled

    individually from an IT management perspective. This broad variety of products needed to be

    realized and implemented within all operative processes, IT applications, and systems, as well

    as in sales information tools. This led to an enormous complexity that impeded the

    maintenance of the IT landscape and the management and optimization of the processes. No

    integrated IT solutions were available at the company and at its affiliates.

    During the project, the integrated PLM approach valid for the company and its affiliates was

    developed. Implementation of Next Generation PLM at this company showed the valuable

    benefits for solid product development, marketing, and strategy:

    PLM Strategy

    Sound marketing strategy due to the early recognition of market needs, sta