CIMdata PLM Industry Summary Online Archive

30 April 2010

CIMdata News

Opinion Poll Results for the Role of PLM in Coping with Economic Downturns

NOTE: This is an opinion poll and therefore is anecdotal, not scientific.

In CIMdata’s latest opinion poll, participants were asked to indicate how PLM can best help them cope with economic downturns. Just over one-third (36%) of the poll participants indicated that PLM can be used to help enable fewer resources to do more, and just under one-third (30%) indicated that PLM can help reduce the cost of development. In many ways, these two choices go hand-in-hand. During recessions, companies often downsize to cut costs, but still expect the same work to be accomplished. As a result, they often require those who are left to do more. In reality, for many companies this is usually difficult to accomplish (i.e., to produce the same work product with less people). This is especially the case when many of the people let go in a recession are those that are close to retirement and hold a significant amount of corporate, product, and process knowledge.

The economic downturn that much of the world is currently experiencing has caused many companies to thin their resources across the board. Often, the first to go are their support staff, e.g., information technology (IT), administrative assistance, etc. Typically, companies then look to thin staff numbers by offering early retirement packages. Unfortunately, this usually results in a significant loss of knowledge. CIMdata’s experience actually indicates that this often results in the loss of domain expertise that can take years to learn and recapture into the organization. Unfortunately, cutting staff can only do so much—product and process innovation and the knowledge associated with it will still be critical in the years to come. Fundamentally, the short-term gain in the reduction of costs can be far outweighed by the long-term loss in productivity and perhaps even an increase in product issues that result from the loss of key knowledge.

It is clear from this opinion poll that the participants understand that PLM can be used as a way to help reduce costs as well as increase productivity. For those that understand how PLM can be used as a process-enabler and as a knowledge management solution, this should be of no surprise. What is surprising is that 10% of those who responded to the opinion poll indicated that they felt that PLM could not help them cope with economic downturns. This is somewhat disappointing given all the documented PLM benefit examples and implementation case studies that can be found on vendor websites, in conference presentations, and even on CIMdata’s site. Clearly, this indicates that more PLM awareness is required in the market.

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