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  • CFO.com | US

ROI Trumps Innovation for Software Users

The providers of complex software used in manufacturing industries may trumpet the high-level attributes of their applications, but ''the users appear to be a little bit more down to earth."

Software applications that reduce the costs of making complex products have found great favor with the software vendors that provide them and the companies that use them. However, the two most common names used to describe these applications — product life-cycle management (PLM) software and digital manufacturing (DM) software — hint at two distinct viewpoints on the technology’s ultimate payoff.

PLM/DM software provides tools for the definition, visualization, simulation, and analysis of each step in a manufacturing process. According to a recent survey by research firm Manufacturing Insights, nearly 40 percent of PLM/DM providers took a “high-level” view of their software, maintaining that enabling product innovation (that is, introducing new items into the product life cycle) was a major benefit. Users of PLM/DM applications, which in the survey spanned the automotive, aerospace, electronics, and telecom-equipment industries, tended to favor software that provided faster ROI (i.e. that dealt with the nuts and bolts of the digital-manufacturing process).

Indeed, none of the customers who responded to the survey considered innovation a valuable attribute. “The users appear to be a little bit more down to earth,” says Joe Barkai of Manufacturing Insights.

The survey found that most customers would like to see PLM/DM products that focus on such everyday matters as configuration management, product data management, enhancing supplier collaboration, and design brainstorming. “Manufacturers and vendors need to work together to define and deliver measurable value,” maintains Barkai.

Bob Merlo, a marketing vice president at PLM/DM vendor Autodesk, claims his company does a good job of working with its customers to develop tools that meet their needs. “Innovation is not a top-tier issue,” he says. “Innovation is important, but you also want to leverage an existing product base as much as you can.”

Vendors and customers who responded to the survey did agree on one key point: PLM/DM products can reduce the number of engineering change orders, the potentially costly need to redesign a process or component. Other areas that showed near-consensus between the two survey groups included the need to reduce prototyping and the ability to discover errors early and easily.

Barkai notes that while vendors and customers may view the PLM/DM field from different vantage points, the market is wide enough that a manufacturer should be able to find the product, or set of products, that will allow it to achieve its goals. But many customers simply haven’t selected the right tools or gained the ability to fully use the highly complex software they already possess. “It appears that vendors give the users what they need and more,” observes Barkai, who also acknowledges that “it’s hard to say if the users are happy about it.”

Daniel Hartley, senior business systems analyst at Advanced Digital Information — a manufacturer of computer storage devices and a user of PLM/DM software — agrees. Hartley feels that many customers fail to adequately research the market or fully analyze their needs. “Understand your processes,” he says. “PLM/DM tools can do a lot, but you need a staff that knows how to unlock and implement useful features.”

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