By: Tom Gill, Frank Popielas and Fred Keith
The PLM consultancy, CIMdata, raised a prickly issue last November that precious few people in technology want to deal with. This issue is politics, specifically the ins and outs of cost-justifying a big project, securing resources, launching the implementation, and sustaining its momentum.
The difficulties surface when several would-be project leaders vie among themselves for resources: funds, support from information technology (IT), and management backing. Industry analysts and marketing people usually posit that “silos of expertise” are the No. 1 problem. A recent workshop convinced us otherwise, that silos and their well-documented speed bumps are symptoms of a more fundamental problem, politics.
Department heads gathered around the jigsaw puzzle of a PLM implementation. Each person's puzzle piece is different, so politics emerges to resolve the differences. (Image source 3d Clipart Of.com)
Enterprise Projects are Fraught with Politics
No one in technology wants to address the politics of projects and programs; exposing internal rivalries to the light of day rarely turns out well for anyone. Hence enterprise system projects are quietly halted, often by a veto from management. The veto traces back to departmental rivalries, disbelief of return-on-investment (ROI) claims, and justifications that are weak, phrased wrongly, or using incorrect terminology.
Is politics a real problem? Yes. The manifold frustrations caused by politics to projects attracted a roundtable of industry managers to CIMdata's workshop.
The roots of the workshop are illuminating: a break-time discussion during a PLM certification class in 2016. A sales vice president from a solution provider was asked whom PLM deals are lost to. The reply: rarely to a rival but very often to a lack of priority at the prospect or to someone with higher rank or more clout for a bigger project or a pet project.
Getting the go-ahead for new technology projects usually boils down to cost justification, benefits analysis, and a solid sponsor. Occasionally, however, even the soundest justification and the most astute analyses are shoved aside by clout, charisma, and personal contacts (think “friends and family” within the org chart).
“It's all wrapped around politics,” the executive told us. In some potentially big accounts, “the internal champions, the people who experience the pain and develop the proposals, tell us they are always getting squelched at budget time. They'll work on a project for a year and a half only to be told, 'Sorry, no.'” Some engineers and IT staffers tell us, “project justifications and planning 'are almost like busy work.'”
Another way of saying this is: The earliest stages of the implementation go smoothly until someone “downstream” from the group leading the project asks, “Show me how this will work.” Or someone in finance says, “Prove it.” That's when the political problems emerge.
Unfortunately, it's usually safer and better for one's career to cut costs a little further than to try to hit the rare innovation home run.
Authors from Consultancy CIMdata: Fred Keith (left), Senior Business Development Manager, Industrial; Tom Gill (center), Senior Consultant and PLM Enterprise Value & Integration (PEVI) Knowledge Council Manager; and Frank Popielas (right), Executive Consultant, Simulation-Driven Systems Development.
Support for PLM Projects Relies on Revenue Estimates
Corporate accounting systems reinforce this reality. Cost savings go right to the bottom line and are easily verified. Revenues even from the most exciting and promising new products are projections into the future ... and thus always open to question. This leads to raw costs like head count being too big a factor in competitive positioning. Meanwhile, other costs such as overhead are heavily discounted, may be arbitrarily allocated, and may be open to negotiation. Less tangible but still very real costs may be zeroed out entirely—stalled automation projects, the loss of innovative people, and missed windows of opportunity.
In too many of today's business environments, skepticism greets revenue estimates. Dollar projections have always run into doubters and always should. But when projections are constantly argued over, defined, and redefined even some of the most promising technology project justifications crumble.
A significant part of challenges to PLM project justifications is in its CAD file management roots. This leads directly to another workshop insight: justifications for enterprise-level solutions, such as PLM are in jeopardy if they use value propositions that also could be attributed to product data management (PDM) or to other product-development enabling technologies.
The industry’s apparent difficulty in putting credible values on PLM implementations (i.e., values that are understood and widely accepted) has created challenges for PLM proponents. This is not a shortcoming of the PLM solution providers or of the industry's consultants. The problem is that nearly everyone interprets value statements in terms of his or her own job—that is, differently.
KPI Confusion Stems from the Different Languages that Separate Departments
Even in the same organization, when we drill down we find that people in different departments and with different responsibilities do not speak the same language. It is with engineers and technologists that the biggest PLM issues lie. Those working in projects and programs use the jargon of their jobs, making the problem much bigger than outdated glossaries, or fuzzy taxonomies, or careless syntax.
The accounting people may confuse the picture further when they use sets of numbers as metrics that users and managers don't comprehend or agree with. Calculating any of these metrics requires fiscal expertise, knowledge of technical business processes, and IT-oriented PLM solutions.
Moreover, the numbers themselves take many forms. In addition to the widely-cited return on investment (ROI) and varying payback periods, justifications may also use discounted cash flow, net present value, and internal rates of return. All, of course, are flavored with company terminology and conventions that add up to obtuseness.
On metrics, we shared a warning with workshop attendees. In the words of a retired aerospace executive, “The problem with any metric is that you maximize what you ask for at the expense of everything else. Be very careful what you ask for: you just might get it. Generally, optimizing any single metric or small cluster of metrics results in a sub-optimal solution overall.”
Other metrics recommendations shared by the workshop participants included choosing a handful of project justifications that are meaningful to both users and management while also measuring what is important to customers. Also, we recommended selecting a variety of metrics (delivery and cycle times, e.g., along with quality and reduced waste or rework) and relating them to the business's key process indicators (KPIs).
Attendees were also cautioned to avoid over-analysis. One tongue-in-cheek workshop slide noted that, “If you torture data sufficiently, it will confess to almost anything.” Also espoused were AGILE software development methods that overturn some traditional practices.
The Most Common Challenges in PLM Implementations
Issues confronting PLM implementations were summarized for the workshop as:
- Products are complex and getting more so but data is fragmented and may be widely dispersed.
- Users may be uncertain if they have the latest data or the correct version, especially when processes are unclear, inconsistent, and slow.
- Sharing is hard, collaboration is harder, and compliance is even harder.
- Approvals and authorizations take too long and costs are too high.
Discussing these issues led directly to several workshop takeaways:
- Persuasion is a useful tool to add to your justification toolbox.
- A sound business case is necessary to get a PLM project approved, but presenting all the excruciating details is not necessarily the best way to get approval. Telling a persuasive story instead worked for more than one attendee.
- So-called people problems are usually “political” in the broad sense of alignment of jobs and tasks with business plans, ownership of problems and solutions as well as incentives, motivation, and accountability.
- The main challenges are culture and resistance to changes but that has many drivers. CIMdata President Peter Bilello often summarizes people problems as “doing the same things over and over and expecting a different outcome, which is the definition of madness”—a quote from Albert Einstein. Bilello usually adds, “Those who do not change will be left behind.”
- Value propositions can be the new clothes of the emperor-invisible to the untutored eye.
- Even in companies with very competitive products, technologies and projects may be mismanaged internally. Eventually this mismanagement emerges, but rarely before those who were responsible have departed.
- Facts may not matter very much but words always do. Decision makers often don't know all the words, let alone the facts, but they can be persuaded. Until they are, there will be confusion and delay.
- The overarching mantra for PLM—a strategic business approach that unites people, processes, and technology—is good as far as it goes. But it's well understood that people face challenges and political problems that run deep. If these are not addressed, a PLM project is likely to fail, if it even gets started.
- Positioning PLM at the top of the enterprise may be doomed to failure. PLM does, however, need to be in the solutions portfolio along with all the other technologies for managing information and developing innovative new products.
- PLM, ERP, and related technologies are all changing radically. Some of this new technology is too disruptive; some people are scared. Moreover, complex new technologies challenge whether middle and upper management truly understands how to meet the emerging needs of the business.
- To get any new PLM / technology deal adopted, and to accomplish anything at all, like-minded people must ally themselves into a team.
The CIMdata PEVI Knowledge Council has its work clearly laid out.
CIMdata, a leading independent worldwide firm, provides strategic management consulting to maximize an enterprise's ability to design and deliver innovative products and services through the application of Product Lifecycle Management (PLM) solutions.
CIMdata works with both industrial organizations and providers of technologies and services seeking competitive advantage in the global economy. To learn more about CIMdata's services, visit www.CIMdata.com.