• Top 5 Ways to Measure Product Innovation, Choosing Metrics to Drive Innovation Performance shares the importance of measuring innovation to improve innovation capability and outcomes. Please enjoy the summary below, or click the report to download a PDF overview (free of charge, no registration required). For the full report, please visit our sponsor, Planview (free of charge, registration required). Why Measure Innovation? Companies know they’ll be rewarded for innovation. They’ve seen that product developers who set the agenda in their market and force their competitors to react have a distinct … [ read more ]

    Top 5 Ways to Measure Product Innovation (white paper)
  • This episode of Tech-Clarity TV explains how food and beverage companies can survive in the digital age as new, agile, innovative companies disrupt their markets.  It shares how these food and CPG companies can use analytics as a competitive tool to better sense and respond to customer needs and gain deeper understanding of their products, processes, and production. This video is part of a series of videos showing how digitalization can help food and beverage companies compete with innovative, digital industry competitors that are disrupting the status quo. The video series is sponsored by Siemens, a … [ read more ]

    The Analytics Opportunity for Food and Beverage in the Digital Age (video)
  • Tech-Clarity’s BOM Management Buyer’s Guide - Boost Performance with Digital BOMs provides criteria for manufacturers to evaluate software solutions to support their Bill of Material and product structure data and processes. Tech-Clarity’s Buyer’s Guides go beyond software functionality to provide a framework of requirements that impact implementation success and long-term ROI, including: Software requirements Implementation Integration User adoption Support Vendor characteristics / attributes Industry or unique business needs Please enjoy the summary below, or click the report to … [ read more ]

    BOM Management Buyer’s Guide
  • This episode of Tech-Clarity TV explains how digital food and beverage companies improve agility, innovation, and productivity through better connectivity between R&D and the plant, streamlined production operations, and analytics. This video is part of a series of videos showing how digitalization can help food and beverage companies compete with innovative, digital industry competitors that are disrupting the status quo. The video series is sponsored by Siemens, a leader in digitalization for the food and beverage industry. For more information, see Tech-Clarity's series of guest posts on how … [ read more ]

    Producing Food and Beverages in the Digital Age (video)
  • How do chemical companies apply digital to the chem lab? Digitalization is streamlining the way companies innovate and bring products to market. Tech-Clarity's Jim Brown will share findings from his research on how chemical companies leverage the digital enterprise to improve efficiency and reduce cost while dealing with mounting regulatory and sustainability pressure. Register for the December 13 webcast (free of charge, registration required). Sponsored by Dassault Systemes BIOVIA. … [ read more ]

    Digitalizing the Chemical Lab (webcast)

Research Rap: Complementary Roles of ERP and PLM in Innovation

Share

A quick peek into some research on … the respective roles that ERP and PLM play in product innovation. This is not brand new research, but I believe it is just as relevant today as when I initially wrote this almost 5 years ago. Why? Not much has changed – with a couple of notable exceptions (SAP and Oracle). I find myself coming back to this topic on a regular basis, and I am starting to do some research in this area again so I thought I would bring this one back to the surface. It also offers some insight that might be helpful for a recent discussion on PLMTwine that touches on the importance of integrating PLM with ERP.

Complementary Roles of ERP and PLM

The Research
The research identified two clear and distinct sets of business processes that companies use to drive product
profitability. These two sets of processes include:

  • The Innovation Cycle – characterized by rapid iteration
  • The Execution Cycle – characterize by a more linear, repeatable process

These cycles are different, and require different solutions. PLM and ERP were developed – and have since evolved – to meet the needs of each of these cycles. Is there overlap? You bet. Processes like engineering change are consistent challenges to coordinate between these two meta-processes. But for most companies, there is
a clear hand-off point where a design is released to manufacturing
(and external suppliers, for that matter)
where ERP takes over.

Below is a table extracted from the research that helps to show the differences between ERP and PLM. These differences are what make each the best solution for their respective set of processes – execution or innovation.

Comparing Characteristics of ERP and PLM

 

Updating the Viewpoint
So what would I change now that five years have passed? Not much. One other interesting fact from the research (and confirmed by a later benchmark I conducted at Aberdeen Group) is that most companies would really rather have one enterprise solution that covers all of their innovation and execution needs. Unfortunately, at the time none existed. I would love to say that five years later that had changed drastically, but it has not. What has changed? The desire for an integrated solution clearly has not changed, but:

  • PLM vendors such as Dassault Systemes, PTC and in particular Siemens PLM have progressed their integration to ERP, focusing mainly on SAP due to it’s market prominence in ERP
  • Oracle acquired Agile, giving them a PLM solution (two actually, including Prodika) that will be further integrated with Oracle ERP over time, but is also being sold into other ERP environments (again, including SAP)
  • SAP has announced and is progressing on their own SAP PLM roadmap (Update: Look for a One to One on SAP PLM in the near future, we have just had a good conversation with the SAP PLM team about their progress)

Having said that, none of the above are clearly differentiated enough to serve as the “one integrated
answer”
that many companies are looking for. So for now, the best solution is likely a hybrid of ERP, potentially some PLM from you ERP vendor, some best of breed PLM suite solutions, and some best of breed point PLM solutions. Sorry, I wish there were a cleaner answer than this.

So that was a quick peek into some recent research on the roles of ERP and PLM. I hope you found it interesting. Does the research reflect reality? Do you see it differently? Let us know what it looks like from your perspective.