Detecon Opinion Paper Next-Generation PLM - Strengthen Competitiveness in the Telco Business: An Introduction to the 4-Pillars Approach of Integrated Product Lifecycle Management

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Next Generation PLM – Strengthen Competitiveness

in the Telco Business An Introduction to the 4-Pillars Approach

of Integrated Product Lifecycle Management

2008 / 10

Next-Generation PLM

Opinion Paper 3 Detecon International GmbH

Table of Contents

1 Executive Summary.............................................................................................4 2 The Shift towards a New PLM Paradigm.............................................................5

2.1 The Increasing Relevance of PLM ..............................................................5 2.2 Requirements on an Integrated PLM Approach ..........................................9 2.3 Spotlight on Multi-Lifecycle Management ..................................................10

3 Integrated PLM Framework for the Telco Business ..........................................12 3.1 PLM Process and Organization.................................................................13 3.2 Product Meta-Model ..................................................................................18 3.3 PLM IT-Architecture...................................................................................21 3.4 Lifecycle Value Management ....................................................................23

4 The Proof of Next-Generation PLM ...................................................................25 4.1 The Challenge ...........................................................................................25 4.2 The Task....................................................................................................25 4.3 The Solution ..............................................................................................25 4.4 The Approach ............................................................................................25 4.5 Benefits for the Client ................................................................................27

5 Conclusions & Recommendations.....................................................................28 6 Outlook: Study ‘Next-Generation Telco PLM 2009’...........................................30 7 Reading on ........................................................................................................31 8 The Authors .......................................................................................................33 9 The Company ....................................................................................................34

Next-Generation PLM


1 Executive Summary

The telecommunications market has faced a great variety of challenges over the past five years. Tough competition, price war and regulatory risk exposure have been leading to decreasing price, declining revenues and EBITDA margins.

Product Lifecycle Management (short: PLM) is more and more regarded as a key to business excellence. Due to market dynamics and the rapid global availability of new technologies, telco providers have finally started to realize the necessity for holistic PLM as a highly critical business success factor for managing the increasing product complexity. Complexity, and the inability of an organization to manage it adequately, is a major obstacle for telco providers to proceed on their path towards operational excellence. The emergence of multi-layered product structures, as well as industrialization trends, call for new management approaches. Arising challenges have to be alleviated by an integrated PLM approach that encompasses a company’s product diversity, innovation efforts, globalization issues and continuously changing legal framework.

Over the past few years, consultants of the Telco Effectiveness & Product Lifecycle Management Group at Detecon have worked on the development of an integrated PLM concept that was successfully implemented in various projects within the telecommunications industry worldwide.

The objective of this paper is to provide an overview on the 4-Pillars approach of integrated PLM which, through its integrated and holistic nature, is capable of alleviating the multiple dimension of PLM complexity. The foundation of the approach is a process view put across four pillars of PLM that are to be integrated in a holistic sense. These include 1) PLM Process and Organization, 2) PLM Meta-Model, 3) PLM IT-Architecture and 4) Lifecycle Value Management. The model is based on best-practice experience from the telco industry and the adoption from existing frameworks from industries with a higher PLM-maturity level such as the automotive or manufacturing industry.

In order to make the effects of our approach quantifiable, Detecon has defined a set of PLM-relevant success factors and KPIs which enables our clients to evaluate the value of the implementation of the 4-Pillars approach. Currently, the Telco Effectiveness and Product Lifecycle Management Group of Detecon, in cooperation with the Research Institute for Operations Management at the RWTH Aachen, are conducting an international expert study on the status quo and perspectives of PLM in the telecommunications industry. The general objective is to validate and evaluate interdependencies between PLM parameters, success factors, and strategic company goals.

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Customer Migration

Duration of the Product Lifecycle

Number of Competitors (Global Markets)

Achievable Market Prices

1990 2000 2010

+50%

1990 2000 2010

+150%

1990 2000 2010

-50%

1990 2000 2010

-50%Cost

Pressure

RevenuePressure

QualityPressure

InnovationPressure

Source: Mercer Management Group Source: RegTP, 2004

Source: Federal Communications Commission, 2004Source: Christensen, The Innovator’s Dilemma, 2003

Customer Migration

Duration of the Product Lifecycle

Number of Competitors (Global Markets)

Achievable Market Prices

1990 2000 2010

+50%

1990 2000 2010

+150%

1990 2000 2010

-50%

1990 2000 2010

-50%Cost

Pressure

RevenuePressure

QualityPressure

InnovationPressure

Source: Mercer Management Group Source: RegTP, 2004

Source: Federal Communications Commission, 2004Source: Christensen, The Innovator’s Dilemma, 2003

2 The Shift towards a New PLM Paradigm

2.1 The Increasing Relevance of PLM

Due to the dynamic nature and momentum of the telecommunications industry, there are a variety of different market trends and developments that leverage the relevance of PLM. Reality has hit providers harshly, as they have to deal with the evidential intensification of competition, decreasing market prices, increased customer expectations regarding functionality and individuality of products, shortened product lifecycles and order lead time, simply in order to achieve and sustain competitiveness. The following graphic illustrates the aforementioned market trends and developments.

Figure 1: Market Trends

These challenges share a common evolutionary path due to recent technological and market-driven advancements, and immensely increased complexity. As a result, they have to be included in Next-Generation PLM considerations.

In the following sections, the main business drivers with the greatest impact on the telco business model are introduced. An effective PLM implementation helps to manage the challenges that these drivers impose on the industry.

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2.1.1 Management of the Extended Product

The dichotomy between tangible goods and immaterial services is subject to change. This development towards an extended product can be observed in both, telecommunications industries, as well as in the traditional industries (i.e. manufacturing or automotive).

An exemplarily critical success factor in the manufacturing industry is the ability to provide more suitable services along with the tangible good. The combination of tangible and intangible attributes in terms of the extended product increases the complexity in managing the product lifecycle.

The extended product (compare Thoben et al. 2001) can be characterized by the fact that it consists of a bundle of components/modules that in sum create the customer benefit - as this holds particularly true for products offered in the telecommunications sector. Each module embodies its own lifecycle, a high variance in functionality, and implies an additional product complexity in terms of module design, module management and module elimination from the product.

2.1.2 Globalization and Emerging Technologies

Global and deregulated markets result in global competition that every company is confronted with. This result in a shift from a suppliers’ market to a buyers’ market in which the customer has to be regarded as the focal point. This business driver forces companies to follow either a cost- and efficiency-leadership strategy or a differentiation strategy on a global scale.

In order to perform in the cost-leadership role, companies not only have to implement efficient processes for the development of complex products, but also need the ability to efficiently handle the order management process. Simultaneously, companies have to cooperate with numerous business partners resulting in significantly higher coordination efforts.

A product differentiation strategy implies processes that ensure short time-to-market on the one hand, and a high degree of freedom in process definition for increasing the effectiveness of innovation activities on the other hand.

Due to the rapid developments in the telecommunications industry and shorter product and service lifecycles, providers are forced to increase their level of flexibility and agility. From a PLM perspective, emerging technologies have to be assessed thoroughly as they present the fundamental basis for the introduction and launch of new services, applications and product opportunities. However, it is vital to maintain a healthy balance between complex lifecycle management and innovation initiatives to maintain competitive advantages, protect market position and remain profitable.

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Technologies shape customer expectations and requirements that have to be addressed by the offered services. The concretion of such abstract concepts like miniaturization, seamless interaction or Evernet, provides enough space for carriers to pursue various product development opportunities.

In the course of the telecommunications industry turning into a global marketplace, a possible internationalization of services should not be disregarded. It is highly important to manage lifecycles of product modules on a global scale as increasing customer expectations call for the flawless functionality of end-devices all over the world. The strategy of international cooperation and service offering is to be put in place, and coordinated with respect to the integrated PLM-approach.

2.1.3 Legal Frameworks and Organizational Impact

Increased regulations such as safety, environmental and product reliability will further influence a company’s PLM process. Especially the resulting effort for ensuring traceability will have an impact. Traceability has two dimensions in the PLM context.

First of all, it is related to the PLM process itself. Effective measures have to be put in place in order to ensure the seamless flow of transactions to identify where material misstatements due to error or fraud could occur (Sarbanes-Oxley Act).

Further, traceability in the order-delivery process is about the tracking of individual product units or components. Legal frameworks like the TREAD Act (for the automotive industry in the U.S.) or REACH (for the chemical industry in EU) can be subsumed under this dimension. Affected companies have to arrange the implementation and integration of these regulations in the existing processes at the lowest possible lifecycle costs.

Another aspect of this business driver describes the fact that service providers have just started to realize that the vertical alignment of organizational business units on the basis of network technologies for fixed, mobile voice, data and content services, presents a mere relict only suitable for the historical context in which those services had been in fact separated from one another. From a Next-Generation perspective, the necessity for each independent unit to assume the role as a network, service and content provider proves to be highly inefficient.

As historically bundled monopolies got unbundled in the course of market deregulation process, providers now have to meet the challenge of re-bundling their units horizontally along the entire integrated value chain with a stringently implemented customer orientation instead of technology orientation. The result is a functional layer-oriented organization (NetCo, ServCo, SalesCo) similar to traditional industries such as automotive or manufacturing.

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In closing this section, following table summarizes the business drivers:

Strategy Impact Impact on Processes Impact on IT Business Driver 1: Mgmt. of Extended Product

Less vertical integration, more horizontal integration of the value chain

Focusing on product modularization and utilisation of product and service platforms to enable the re-use of components

Collaborative PLM-process with defined interfaces

Process readiness for the management of complex products and services

Data exchange standards

IT-representation of complex products

Appropriate fulfilment of the information need

Business Driver 2: Globali-zation

Commitment to either a product individualisation or product standardisation strategy

Focus on innovations

Improvement in the process automation

Inter-company wide process standards

Enterprise Application Integration with external business partner

Support of the process execution by providing appropriate IT-functionality

Business Driver 3: Legal Frame-works

Comply to regulations e.g. Sarbanes Oxley Act, TREAD Act

Support for traceability of products by standardised and well documented processes

Support for traceability of processes

Management of product related information during the whole lifecycle

Table 1: Business Drivers and Their Impact

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2.2 Requirements on an Integrated PLM Approach

Cost reduction initiatives and revenue generating strategies are vital for the achievement of common business goals in a time marked by tough competition and price reduction. Management aspects such as the proper positioning in the market, innovation initiatives, introduction of new products, and customer satisfaction combined with the cost efficiency measures, are becoming more important than ever.

PLM can be defined as the activity of managing a company’s products across the entire lifecycle, from the early stages of conception to the final withdrawal or recycling of a product. By this definition, a strong interrelation between the value creation process and PLM can be deduced.

In order to support such value creation process, an integrated PLM approach has to be followed, which holds the mandate to encompass and optimize all aspects required to leverage the efficiency and effectiveness of the company’s PLM.

An integrated PLM approach is necessary to counter the multitude of challenges placed on telecommunications companies. Such an approach is characterized by the consideration of process models and consistent IT-support, as well as by the ability to structure products or their components in a form that provides commonality on product level in particular (such as by means of same parts management as an analogy from the automotive or manufacturing industries), but also on process and technology level to support the provisioning of such products across their lifecycle. With singular optimization of PLM processes without any consideration of the IT-architecture for instance, such implementation efforts would have to be regarded as incomplete, eventually leading to suboptimal results.

Taking the current globally changing business environment into account, PLM can be considered as a strategic weapon for enabling companies to provide an additional value to customers, and thereby gaining a competitive advantage over their competitors. Especially in the telecommunications industry which experienced a significant change in its environment over last five years, PLM is considered to be essential for coping with shortening innovation cycles.

The key to achieving innovation and customer satisfaction at reasonable costs is a holistic view out across the company and its processes, enabling an enterprise organization to meet the new challenge of managing multiple lifecycles for providing one product to the customer. Until now, no such holistic PLM-approach addressing the real challenges of the modern business environment in the realm of telecommunications has been developed.

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2.3 Spotlight on Multi-Lifecycle Management

The aforementioned challenges pressure telecoms to achieve operational excellence while providing mass-customized services to an evermore demanding customer front at the same time. The increasing relevance of the concept of product individualization results in two complexity levels. On one hand, customer expectations become more complex on a global scale; on the other hand, internal complexity increases as well since heightened product expectations lead to more complex product structures with varying lifecycles and functionalities that have to be encountered with the efficient and effective management of multiple module lifecycles.

Multi-Lifecycle Management (MLM) can be considered as a key challenge within the PLM context that holds especially true for the telecommunications industry due to the multi-layered nature of its products. For the purpose of this paper, we define MLM as follows:

MLM is the activity to manage a company’s extended product that is characterized by consisting of product modules with individual lifecycles, across the complete product lifecycle in order to provide the customer with a unified product experience.

Providing a unified experience to the customer, requires the synchronisation and coordination of multiple lifecycles that in sum are perceived as one product from the customer perspective. According to the TM Forum 2007, this synchronization has to occur on several layers (Figure 2).

InfrastructureLifecycle

DeviceLifecycle

ApplicationLifecycle

Time

Product Layer

Variance

PerceivedProduct

Product (v1.0) Product (v1.5)

Service Lifecycle

Figure 2: MLM in the Telecommunications Industry

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By considering MLM as an increasingly important aspect of an integrated PLM approach, following potentials can be leveraged:

Realization of mass customization improving customer satisfaction by meeting the exact micro segment-specific customer requirements

De-coupling of development process and thereby reducing internal complexity

Increased internal efficiency through synchronization of multiple layers from a consolidated perspective

In the following chapter, the 4-Pillars approach will be introduced along with relevant implementation principles for each layer.

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3 Integrated PLM Framework for the Telco Business

The integrated PLM-Approach consists of four components as depicted in the figure below.

Defines the overall product structure and enables effective management of product components

Increases efficiency of PLM-process by the provision of best-of-breed software components to support product development

Ensures product and service quality aligned with requirements of the relevant market along with consistent reporting infrastructure

Builds the basis for the PLM success by facilitating an operational excellence to the highest degree

4-Pillars Approach

Product-Development Marketing Management Product Exit Management

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ModulesBasic Module

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PLM Process and Organization

Definition of overall process model

Classification of business activities and their organizational purposes

Description of roles and responsibilities

Reduction of product complexity

Introduction of modular product structure

Facilitation of product components reuse

Enabling higher degree of process automation

Seamless integration of Information

Provision of consistent IT-based view of the product

Definition of product portfolio

Enabling Lifecycle Costing Approach

Facilitation of consistent reporting infrastructure

Product Meta-Model

PLM ITArchitecture

Lifecycle Value Management

Class.

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Figure 3: 4-Pillars Approach of Integrated PLM

The foundation of the 4-Pillars approach is a process view put across four dimensions of PLM that are to be integrated in a holistic sense. Extensive consulting experience with PLM implementation and optimization projects has shown that the actual pain points for telecommunications companies circle around these four major areas:

PLM Process and Organization – facilitating the execution of the collaborative process (efficiency goal) and aligning the activities with the strategic goals of the company (effectiveness goal)

Product Meta-Model – enabling product component reusability by defining constraints and rules for decomposing the product functionality into meaningful modules with coherent data models

PLM IT-Architecture – increasing the PLM process execution efficiency by providing a best-of-breed framework of IT-components and their interrelations

Lifecycle Value Management – ensuring alignment between product and service portfolio and market by continuously identifying the requirements and demands of actual and potential markets

These pillars are subject to further elaboration in the following sections.

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Long HighRadical-Inno-vationArchitectural Innovation

Long HighRadical-Inno-vationArchitectural Innovation

Medium Medium-high ModularinnovationMedium Medium-high Modularinnovation

Short Low IncrementalInnovationShort Low IncrementalInnovation

Component characteristicLifecycle-duration

Product-Complexity

Innovation-Level

Component characteristicLifecycle-duration

Product-Complexity

Innovation-Level

3.1 PLM Process and Organization

Companies in the service industry should take a disciplined, analytical approach for the development of new products relying on targeted customer input. The main design goals of this approach is to facilitate the execution of this collaborative process (efficiency goal) and, equally important, to align the activities with the strategic goals of the company (effectiveness goal). In the following sections, PLM process variants and principles are introduced which present the foundation of the process pillar of our integrated PLM approach.

3.1.1 PLM Process Variants

Long-living products with a limited variance in their product structure along their lifecycle are becoming less and less relevant. Those products have been replaced by a new type of product: the extended product. It is characterized by the fact that it consists of a bundle of components/modules, each with a different lifecycle and a high variance in functionality. As the product concept has changed, the PLM process has to be adapted accordingly. Based on the typical characteristics of product components, several specifications of a PLM process have to be defined.

PLM-Flex: This process variant ensures an efficient and effective PLM with the highest possible degree of freedom for product design and pricing. Typically, radical innovations with an associated high risk of failure can be managed with this process variant (i.e. new network technology).

PLM-Max: Based on standardized activities, this process variant focuses on efficiency improvements and the simplification of knowledge-intensive development processes for products for which boundary conditions are known.

PLM-Fast: This process variant is characterized by the highest level of standardization and simplification of the decision-making process. It focuses on the highest possible reduction of processing time under known conditions.

Figure 4: PLM Process Variants

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3.1.2 PLM Process Principles

Our PLM process approach is based on following four principles which have to be considered when implementing PLM processes:

Enhanced Stage-Gate approach

Multi-perspective view

Metrics-based management

Process modularity

Principle One: Enhanced Stage-Gate Approach

Most telecommunications companies utilize the Stage-and-Gate approach as a conceptual and operational model for the development, marketing and elimination of a product during its lifecycle. The Stage-and-Gate approach is very significant to the management because it restricts investment and expenditures in the next stage until the management is comfortable with the outcome of the current stage. The gate can be effective for monitoring and controlling product quality, as well as development progress and costs.

The typical PLM-Max process in the telecommunications industry consists of several stages - from idea generation to withdrawal from the market. Every stage consists of a distinct number of activities that have to be accomplished by specific process stakeholders at the given phase. The entrance to each stage is a gate; these gates control the process much like quality control checkpoints. Each gate is characterized by a set of deliverables as input, a set of exit criteria and an output. Gates are manned by senior managers that form the so-called product board. The product board acts as a gate-keeper that evaluates the results from one stage by a given set of criteria. Based on this evaluation, the product board can either decide whether the product idea is ready to proceed to the next stage, should be re-started at the previous stage, or is completely rejected.

The standard Stage-and-Gate PLM process with its frozen gates has several characteristics that lead to significant problems in the development of low-complexity telecommunications products, as well as highly innovative extended products and solutions (i.e. time-to-market delay). Weaknesses of the Stage-and-Gate model - such as narrow criteria, long review preparation time, slow and serial decision making process - provide reason for the necessity of introducing hereby two additional approaches: the aforementioned PLM-Flex and PLM-Fast process variants.

The process solution for standardized products could be a simplification and automation of gate decisions, and elimination of some gates/stages.

Stage-Gate approach

A Stage-Gate process is a conceptual and operational roadmap for moving a new-product project from idea to launch. Stage-Gate divides the effort into distinct stages separated by management decision gates. Cross-functional teams must successfully complete a prescribed set of related cross-functional tasks in each stage prior to obtaining management approval to proceed to the next stage of product development.

Source: Stage-Gate Inc; www.stage-gate.com

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For highly innovative extended products, the Stage-and-Gate approach exhibits some additional weak points. Stage-and-Gate processes force fundamental project decisions to be made earlier than necessary, and hence, resulting in increasing costs of change, as well as inflexibility in regards to adequate reactions to possible changes. Moreover, flexible development techniques are more suitable for development projects rather than phased approaches. The introduction of “fuzzy gates” that allow “go-forward” decisions to be made in spite of shortage of certain information (with prospect to achieve certain results at a later date) does not solve the issue completely.

A further developed alternative to Stage-and-Gate processes – Bounding-Box approach – is essentially a management-by-exceptions technique by which certain critical parameters of a project,

such as profit margin, project budget, product performance level and launch date, are negotiated in form of a bounding-box. By this, the team is free to move ahead unimpeded as long as it stays within the box (Doyle, 2003).

The adoption of Stage-and-Gate and Bounding-Box models allows for the development of a new approach for designing variants of a PLM-process in the telecommunications industry

Principle Two: Multi-Perspective View

PLM-related projects are often accompanied by a conflict of objectives between the product marketing and the technical units within a company. Several case studies have documented that this conflict can eventually lead to higher probability of product failure in the market. This can be grounded on several reasons. Either the product specification is far from actual market demands and too much technology-driven, or the product marketing has specified a conceptual product without considering the technical feasibility of the idea. The key is to take on a multi-perspective view - three perspectives on the process have to be taken into account in order to ensure efficient coordination and collaboration between the relevant departments or business partners. The three perspectives are focused on marketing, technological and financial aspects.

In the market perspective, all activities related to product marketing, such as the definition of product specifications and the management of the product in the market-place, are included. The technical perspective subsumes all technical or production-oriented activities. Finally, all financial aspects and implications are categorized in the financial perspective.

Fuzzy Gates

Fuzzy Gates approach introduces more flexible stage-gate requirements model that allows keeping reasonable balance between time-management and risk-management goals. It focuses on the quicker decision-making which implies possible suspension of decision-making body approval, introduction of decision- making tools and project supervision on the final steps of every stage.

Robert G. Cooper, ‘Winning at New Products: Accelerating the Process from Idea to Launch’

Bounding Box

A further development and simplification of the Fuzzy Gates Concept is Bounding Box. The Bounding Box represents a strictly defined zone with clear parameters/KPIs within which a program team is allowed to operate. As long as the program is within the zone, the team on its own meets day-to-day decisions, otherwise issues are expected to be escalated to management/ product board. Important to mention is that bounding box should be implemented for innovation process before the launch phase starts.

Source: Laura Doyle, Using the ‘Bounding Box’ to Accelerate Product Development

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At each stage and for every perspective, a distinct deliverable is specified. Before entering the gate, the deliverables - at least one for each perspective - are conflated and presented as a whole to the product board.

For the purpose of achieving a higher degree of process standardization, the deliverables should be created on the basis of pre-defined and agreed templates.

Principle Three: Metrics-based Management

In addition to process definition, the organizational and business components must not be neglected. Since products, and consequently the PLM process, become more complex and involve internal as well as external partners along the value chain, there is a greater need to balance top-management control with the empowerment of self-managed, cross functional teams. As a prerequisite for achieving this balance, the company has to implement a metrics-based management approach by which teams are measured on strategic performance indicators such as development cost, time-to-market and customer satisfaction.

The definition and selection of the indicators is critical for the successful implementation of the PLM process. Our developed and tested metrics-based framework can be used to systematically make business decisions about implementing PLM and maximizing the return on investment (ROI).

The metrics-based framework to assess and monitor the efficiency and effectiveness of an implemented PLM process includes four dimensions:

Business Metrics: All market-based and competitive metrics fall under this category, including metrics of strategic relevance such as market share, revenue growth, operating costs or margins.

Process Metrics: This category includes all metrics that are focused of the performance and quality of the process itself, including time-based metrics (i.e. time-to-market, time-to-prototype, time-to change, time-to-access-data, change process cycle time), as well as quality-related metrics such as design error rate, number of quality rejections or number of deviations or waivers.

Product Metrics: All metrics that related directly to the quality of the product are subsumed under this category, including such metrics as unit costs, reliability of the product, number of defects, number of requirements met or number of product modules.

Soft Metrics: Due to the abstract nature, soft metrics are probably the hardest dimension to measure. However, this category has to be considered as well since all culture-related aspects are included that have an impact on the PLM process. This fourth dimension includes metrics such as employee satisfaction, supplier relations or customer satisfaction.

Implementation of such a framework enables a company to define and establish success metrics that could be used to measure the effectiveness of an implemented PLM process.

By setting the weights properly, the development teams are capable to self-steer for the greatest short-term and long-term profit, resulting in less coordination efforts and efficiency gains especially for cross-departmental teams in particular.

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Principle Four: Process Modularity

In accordance to the modularization of products, production processes have to be modularized as well in order to enable for the flexible assembly of product modules at the interface to the customer. A process framework encompassing the strategic and operational business requirements for telecommunications companies is required.

The overall objective reflected in this principle is the achievement of the highest possible degree of two aspects at once: market flexibility and internal efficiency. Modularization in regards to process design allows the management and PLM force to decompose complex PLM tasks into modules of process chains that can be flexibility re-adjusted and re-arranged as needed, thus imposing a scaling effect on production efficiency. Through the streamlining of processes, innovation cycles can be shortened – ideally in continuous sync with changing market, technological or financial drivers.

Process modularization can be regarded as an enabler for increasing the efficiency and effectiveness - however, following aspects have to be considered and followed in order to be able to fully capitalize on the potentials benefits:

Architecture defining production and process modules and their functions.

Interfaces describing the relationships and input/output parameters between modules.

Set evaluation criteria or standards for the modules assessment in regards to conformity within the entire system and relative to one another.

The requirement for standardized interfaces especially presents a critical point. In order to allow for the flexible rearrangement of interchangeable process modules, the input and output parameters have to be defined and described precisely in a detailed fashion across all process modules. A valid approach to such demand is presented by data modelling which will be further explained in a subsequent section.

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3.2 Product Meta-Model

The product meta-model (PMM) is essentially based on the consistent product definition from a product engineering perspective, as well as from a customer (market-oriented) perspective - which is crucial in nowadays hyper-competitive environments. The PMM serves as a regulatory framework for managing the vast amount of information that relates to the product during its lifecycle. Its purpose is the organization of all relevant information pieces in order to ensure efficiency of the production process through re-usability of components, in hand with an effective customer response that can be established by enabling product individualization concepts.

Many present quality deficiencies originate from a diffuse definition as well as from an inconsistent view on the ‘product’. The extended product should be clearly and precisely defined, efficiently developed, valuably commercialized and reasonably understood by the customer. There should be a constant product definition across the entire lifecycle and its coherent business and operational processes.

3.2.1 Definition and Categorization of Products

The product as the main subject of the process needs to be defined, and this definition of product should take the perspective of the customer into account. A product is defined as anything that can be offered on a market for attention, acquisition, use or consumption that might satisfy a wish, demand or need. It can be of physical or intangible nature, such as services for information, communication or entertainment. A product is an entity the customer perceives in its entirety.

The precise definition of the complete product range and their categorization remains a considerable problem especially in the telecommunications industry. For as telecommunications, there are four essential product categories that can be differentiated: market product (service), standard solution, customized solution (or individual solution) and bundle. All offered products and services can be assigned to one of these four categories.

Product definition is not simply a reflection of the engineering design. It also includes the entire set of information that defines how the product is designed, manufactured, operated and managed in the market, and finally withdrawn from the market when it becomes obsolete. This product definition is continually updated throughout the entire lifecycle and its coherent business processes. For PLM in general, the product has to be regarded as the core information object (CIO).

3.2.2 Data Modelling as a Prerequisite for Meta-Model

Data modelling represents one of the key fundamentals for a successful implementation of product and process modularization. It can be defined as the analysis, definition and description of data objects and their interrelations to allow for the interoperability and consistency of data objects. The main objective is to ease and simplify communication between different business entities.

As data objects are transformed by processes modules, a clear and consistent picture on the varying states of these data objects is required across all relevant processes on a high-granular business, as well as detailed operational level, for achieving internal efficiency and market flexibility. The Unified Modelling Language (short: UML) is commonly used as the notation standard for data modelling.

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Product and process modularization goes hand in hand with data modelling, and therefore a systematic approach for such should be followed for the efficient implementation of the Product Meta Model pillar. An illustrious example for such model is given with the Shared Information and Data Model (short: SID) which is based on UML, and widely applied as the de-facto standard for data modelling in the telecommunications industry.

SID can be regarded as an information model, providing a high level business oriented view, as it defines entities (representing objects) that are of interest for the service provider, as well as the associations between entities.

In regards to PLM, several benefits can be realized if such data modelling standards like SID are applied. All involved entities, be it internal division or external partners, are in position to share a common understanding in terms of functions, relationships and the associated information requirements of each business entity. The overall objective is to increase effectiveness and efficiency of system interaction.

3.2.3 Separation of Concerns – the Need for a PMM

A product model can serve several purposes. In regards to the telco industry, a product model is necessary for the definition of products from two distinct perspectives: the production point of view (telco factory) and from a customer perspective.

A product model from the latter perspective is necessary for providing the customer with the possibility to configure the product in exact accordance to one needs (compare to the car configurator in the automotive industry). In an ideal case, the product configurator from the customer perspective is directly integrated with its counterpart on the production side, and vice versa. The bi-directional integration ensures consistency and thereby efficiency improvement in the maintenance of product data.

The purpose of PMM lies in the definition of the underlying linking rules, as well as the type of modules in both perspectives. In Figure 6, module types have been defined from the production point of view. These module types can be instantiated for the definition of a product. The same principle is applied for the definition of the product from the customer perspective. The alignment, or as mentioned before, the bi-directional integration, is achieved by the consistent use of the PMM.

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3.2.4 Benefits of Product Structure Standardization

The definition of the product as a CIO based on a PMM is the fundament for the standardization and modularization of products in the telecommunications industry. Product standardization changes the process landscape and reduces costs. Modular product data structure ensures linking the sales perspective to the internal (production) perspective in relation to the offered products and services. The main objective of introducing a modular product structure is the optimization of the product development and the sub sequential production.

Consequently, applying the concept of modularization with all its advantages regarding reusability refers not only to the market but also to the technological side. Therefore a modular product structure is to be followed by a modular production structure. This poses a critical aspect since in order to achieve efficiency, competitive pricing and rapidness in terms of production, the product processes have to be industrialized through modularization. This enables providers to flexibly serve a heterogeneous customer base with a relatively stable product portfolio re-arranged in a customer-specific fashion.

The product database and the corresponding processes should be implemented by considering the existing processes, company structures, and cultures. Requirements from the affected functional areas flow into the definition of the product data structure. One master product data management fits all needs of the main processes and its interfaces. Using modular product structures leads to simplification and cost optimization of product engineering.

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3.3 PLM IT-Architecture

The basis for the evolution of a product through its complete lifecycle is a solid PLM IT-architecture that is customized for the company-specific PLM requirements. Since systems and applications primarily serve to support the business and operational processes, such has to be implemented as a holistic enterprise architecture to support the PLM process in all relevant dimensions: (1) decision support, (2) process support and (3) enterprise architecture integration. A standardized off-the-shelf PLM system is therefore not the tool of choice as Ausura and Deck (2007) point out.

As previously mentioned, it deems important - following the concept of product and process modularization - that also IT components should be implemented in a modular structure within an integrated enterprise architecture to allow for efficiency and flexibility.

Instead of a one-size-fits-all approach (meaning one software system for the support of the entire PLM process), it appears advantageous to rely on an IT-architecture that reuses and respectively customizes existing components as far as possible. In following sections, an overview on the essential IT components that a PLM IT-architecture should consist of is provided.

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3.3.1 Decision Support System (DSS)

The main purpose of a DSS is to gather and consolidate data from operative systems in order to provide aggregated information on the product lifecycle to the senior management. It is mainly based on three components: The Computer Aided Selling (CAS) provides functionality for product configuration and product pricing. Aspects regarding the planning of long-term resource capacities are handled by the Strategic Resource Management component. The Value Management component covers product portfolio management aspects.

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3.3.2 Process Support System

On the operational level, the PLM process execution is supported by the Process Support System, consisting essentially of 5 components. The Workflow Management Systems (WFMS) enables a higher degree of process automation. Especially in the context of distributing and releasing unstructured content like product specifications in cross-functional teams, the WFMS plays an essential role through a strong link to the Product Data Management System (PDM). The Product Modelling System and the PDM are closely coupled. The former defines the product structure, providing an overview on the types of modules a product is composed of. In a database context, this functionality is similar to a scheme definition. The PDM system stores all product relevant data according to this definition, and provides different views for each stakeholder, be it from a marketing and engineering department. The Multi-Project Management System and collaboration tools are instruments for the management of the product in different phases in a collaborative environment.

3.3.3 Enterprise Architecture Integration

A PLM IT-architecture is supposed to hold the promise to seamlessly integrate and present all information produced throughout all phases of a product’s lifecycle to everyone in an organization including external business partners. For ensuring this functionality, an EAI-approach has to be implemented. According to recent research activities, a Service Oriented Architecture (SOA) is most suitable to integrate business applications across company boundaries, allowing for an increase of efficiency.

In order to ensure end-to-end interoperability between modules, the implemented technology architecture components have to be consistent, or at least, interoperable to one another. The challenge lies not in the selection of single solutions which might work well in a silo context, but in the holistic implementation of an integrated modular enterprise architecture, which allows for flexibility through its modularity and an increase of process performance on grounds of its integrated nature. Hence, the technology architecture roadmap has to be in sync with the product roadmap, and vice versa.

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3.4 Lifecycle Value Management

In such a highly competitive market as telecommunications, lifecycle-oriented product planning is a necessity which is to be imple-mented as a robust and systematic process combined with the right organizational environment. Life-cycle Value Management (LVM) can be defined as a holistic management approach for plan-ning, steering and controlling the development, marketing and retire-ment of products and portfolios across the entire value creation process and lifecycle. The overall objective is a maximization of a company’s value by striving for an optimal degree of coverage

between customer and market demands and product and portfolio functionalities. Within the context of the overall value chain, LVM ensures that extended products that are developed and offered in the market place, fulfil the market requirements and reflect the market demand. LVM requires permanent attendance in regards to analysis and planning, orientation towards customer benefits and the alignment to overall company functions. In the following sections, the three supplementary building blocks of LVM in telecommunications are introduced. The implementation of these three building blocks, combined with a modular product data structure, ensures a ‘state-of-the art’ Lifecycle Value Management.

3.4.1 Value-Oriented Portfolio Management

The value-oriented portfolio management process consists of strategic alignment and value- based product portfolio management. Focusing on clearly defined and specified products makes a significant contribution to effective portfolio management. Products can be positioned without overlaps or threatening cannibalization effects, and in accordance with pre-identified market demands. Sales and marketing departments benefit from the increased transparency of the product range and enhanced comprehensibility for the customers.

The portfolio management can be achieved by either portfolio restructuring towards a modular structure or rationalization by means of product elimination. This analysis is to be carried out with a strict value-orientation based on qualitative and quantitative parameters, including aspects of budget allocation across products of a portfolio.

Value-oriented portfolio management should ideally be based on both quantitative and qualitative parameters. The quantitative dimension is focused on value contribution in monetary terms, as well as expected resource requirements, complexity costs and quantitative implementation risks. The qualitative perspective is based on a product performance assessment, including such aspects as customer benefits, reusability of modules, cross-selling potentials, degree of imitableness and strategic relevance.

Figure 8: Lifecycle Value Management Model

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In order to allow for a quantitative and qualitative assessment, portfolio management uses the tools provided by the IT-supported portfolio database. Within the increasing complexity of product marketing, it is highly important to rely on an appropriate and efficient data basis that compensates for the lack of business transparency and low synergies in the value network. The modular structure of the portfolio promotes the use of common parts in the production processes, increasing the ratio of mass production to overall production.

In addition, not only the current portfolio should be evaluated and in terms of qualitative and quantitative aspects, but also potential future portfolio scenarios. In praxis, several product innovations originate from technological advancements. The implementation of an innovation radar to realize the function of recognizing and assessing upcoming market and technology trends at an early point of time can be a helpful tool to include an outlook perspective in value-oriented portfolio considerations.

3.4.2 Customer Needs Management

Customer Needs Management is a discipline within PLM that ensures that customer needs or requirements are communicated to all product development stakeholders across the lifecycle. Customer Needs Management effectively decreases the potential of design flaws and delays associated with misinterpretation and discontinuous communication, while improving productivity, efficiency and quality at the same time.

A standardized product data structure forms the prerequisite for the continuity of the processes, spanning from production to sales and marketing. The development process for market products becomes faster and cheaper. A higher level of process automation improves production quality and process cost efficiency (i.e. by savings in IT operating costs and headcount). Besides process continuity, the data quality along with certain level of automation has to be ensured.

The development of an integrated database between the Product Lifecycle Management and Product Portfolio Management has to be regarded as a critical factor to achieve consistency in regards to information flow. A possible concept for this is the implementation of a Data Warehouse which enables consistent realization of data exchange between production and sales system, and provides for the opportunity to up-value the existing Product Data Management and to assure early identification of value creation opportunities.

3.4.3 PLM Reporting and Controlling

An effective PLM reporting and controlling solution is based on a successfully implemented IT database, as well as standardized product definitions. The main objective is to increase transparency by ensuring the availability, accuracy, timeliness and completeness of information for assessing and monitoring all relevant key metrics as mentioned in a previous section. The unambiguous correlation of basic data to business management indicators along the lines of a standard product structure provides staff and management with precise and timely information about all of the critical success factors that help staff and management to make the right decisions at the right time. Necessary information will have to be aggregated in a dynamic fashion and in real-time – fulfilling varying information needs by different stakeholders in different situations (i.e. development, launch, growth, maturity or withdrawal)

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4 The Proof of Next-Generation PLM

4.1 The Challenge

A renowned company in the telecommunications industry carried out an extensive restructuring program which would enable it to maintain its competitive position in a deregulated market environment. The objective was to convert the previously technically driven approach for the product design to an approach focusing more on customer needs and requirements. But even more important, the company had a strong interest to develop and implement an integrated PLM approach – following the 4-Pillars approach as described in this paper.

In the initial situation, the implemented PLM solution with its platform was not ‘state-of-the-art’ – due to a lack of both, product withdrawal concept and decision gates, as well as an unacceptable time-to-market ratio. Until then, no portfolio management process was designed and implemented.

The existing portfolio was oriented on the organizational or technical structure, and not organized from the customer’s point of view. The product portfolio was characterized by a large number of product variants and features. All of these products needed to be handled individually from the 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 sales information tools. Hence, the provider had to struggle with enormous complexity impeding the maintenance of IT-landscape and the management and optimization of the processes. Neither for the company itself, nor for its affiliates or partners, was an integrated IT-solution architecture available or implemented.

4.2 The Task

The product portfolio was subject to thorough analysis throughout the whole company. The aim was to balance product categorization, to understand the customers’ requirements and to broadly define the product itself that the company was expected to offer on the market. The precise definition of the product was expected to support and enable accurate reporting.

The integration of several standalone IT-solutions into one integrated IT-architecture was vital to enable effective decision-making procedures and to reduce the complexity and inefficiencies.

4.3 The Solution

During the project the integrated PLM approach valid for the company and its affiliates was developed. The implementation of the 4-Pillars approach at this particular company resulted in valuable benefits for solid product development, marketing and strategy.

4.4 The Approach

The approach was based on the four pillars of our approach of integrated PLM. Following a thorough analysis to assess the status quo of the implemented PLM solution and identify potentials for optimization, a wide range of activities was defined for each specific dimension as a work package.

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‘PLM Process Introduction was carried by designing specific PLM processes for the financial, technical and market perspectives with set key deliverables for each. The steps taken included:

Design and implementation of three variants of Stage-Gate PLM-processes (PLM-Fast, PLM-Max, PLM-Flex) for different types of products

Introduction of fuzzy gates concept for a lean decision-making process.

‘Implementation of the Product Meta Model presented a highly critical aspect since the company specifically demanded the shift towards more customer orientation. Following this mandate for the redefinition of the product portfolio from the customer’s point of view, the integration and harmonization of the decision-making process in which various stakeholders from different departments are involved, presented another key aspect. The steps taken in this regard constitute:

Adoption of easier know-how exchange and the guaranteed usage of the “common language” throughout the product development, as well as fast and efficient communication between international partners.

Definition of harmonized and modularized product portfolio for all national and international affiliate companies.

Introduction of innovative and effective materials reuse.

Adoption of the product data platform in all international subsidiaries.

‘PLM IT-Architecture Development was regarded as the technical fundament which provides a range of useful utilities to ensure a successful and reasonably-priced integration of the PLM-process within the company. The steps taken included:

Concept development and implementation of DMS Management and Workflow Project Management system.

Implementation of the product concept within the ERP-system.

Implementation of the shared platform for documentation and entire project management.

Roll-out of the one-physical-server concept to support separate PLM processes in all divisions and subsidiaries.

Assurance of Effective Lifecycle Value Management was focused to accompany the product lifecycle from the market launch through to the market withdrawal of a product. Issues considered in this regard were:

Introduction of the value-based portfolio management process

Development of sound marketing strategy by means of early market needs recognition, standardized information and environmental issues.

Assurance of detailed input for controlling for the sake of exact allocation of revenues and costs to the products.

Introduction of simple allocation at cost centres and cost units.

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4.5 Benefits for the Client

Although particular benefits for the customers were to be expected for each of the four dimensions, due to the holistic and integrated nature of the implementation and the tight interdependencies between all dimensions, synergetic effects could be realized, thus increasing overall efficiency and effectiveness of PLM and innovation management.

The PLM Process and Organization solution was based on the introduction of all three variants of the Stage-Gate approach (PLM-Flex, PLM-Max and PLM-Fast) combined with the fuzzy-gates concept. Due to these processes, the time-to-market ratio was reduced by 25%, the product-success ratio was increased by 75%, and a customer-centralized product development was achieved.

The PLM Meta-Model solution helped to achieve precise and customer-oriented product definition that reduced the product portfolio complexity by 50%, and introduced the modularization of the product. The modularized product portfolio increased cost reduction chances by means of similar-components reuse.

The PLM IT-Architecture solution facilitated the introduction of an integrated IT-System supporting the processes across the entire product lifecycle. The optimization efforts included the implementation of Project Management System and the conceptualization of the product within the ERP-System, enabling a consistent view on the product in the future as a Core Information Object (COI). As a result, the CRM-system was completely renewed as well.

The PLM-Lifecycle Value Management solution included the introduction of an after-sales process to meet customer’s demands. As a very important step towards increased value-oriented efficiency, a precise reporting procedure was defined with focus on quality, functionality, performance and costs.

Enabling effective product controlling

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Enabling effective product controllingEnabling effective product controlling

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Introduction of Stage-Gate and Fuzzy-Gate conceptsIntroduction of Stage-Gate and Fuzzy-Gate concepts

Figure 9: Benefits for the Client

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5 Conclusions & Recommendations

1. PLM requires top management attention and has to be regarded as a strategic key to ensure sustainable competitiveness and growth in the telecommunications industry

The intensification of competition, decreasing market prices, heightened customer expectations, shortened product lifecycles and order lead time – these are just some examples that stress and leverage the relevance of PLM. PLM requires top-management attention as it will have to be increasingly regarded as the strategic weapon for counteracting these 21st century telco challenges. The 4-Pillars approach goes far beyond the traditional understanding of PLM based solely on IT-solutions. An integrated PLM approach will have to include all relevant dimensions that impact the management of product lifecycles: processes, systems, products and portfolio considerations.

2. The horizontal value chain integration with external partners becomes increasingly important as industrialization trends are coming into effect

One of the most important trends is that the telecommunications industry is becoming increasingly industrialized. Not only does the integration and synchronization of internal PLM processes and systems pose a critical issue, but more important, the value chain will further has to be horizontally integrated across company borders within the supplier and partner network. The concepts of process and systems integration, process modularization and value chain decomposition will play a key role in accompanying carriers in their journey towards the industrialized telco age and enable them to realize large-scale benefits.

3. The concept of multi lifecycle management helps to resolve increasing product complexity and allows for the synchronisation of multiple product layers

The products in the telecommunications industry typically consist of several modules that in sum create customer benefit. Each module embodies its own lifecycle, which implies an additional product complexity in terms of module design, module management and module removal from the product. Due to this increased complexity resulting from the multi-layered nature of telco products, approaches are necessary for the management of these multiple lifecycles and the coherent requirements. The integrated 4-Pillars PLM approach can provide a solid basis for the implementation of such approaches. The ultimate objective of MLM is to increase the degree of synchronization of the product layers in order to provide a unified experience to the customer through one perceived product.

4. Complexity management deems highly critical as it holds the promise to create transparency in regards to the involved processes and systems

As complexity increases, solid management approaches will have to be in place in order to encounter this trend and to reduce complexity. The implementation of the aforementioned process principles, especially process variants and process modularization, as well as of SOA-oriented fully integrated systems architecture for the support of high-complexity telco products, is important. The overall objective is to create transparency in regards to the functions of process and system components and their interdependencies through a structured and analytical approach, particularly in regards to the hand-off between innovation processes and implementation and operations processes.

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5. Effective innovation management has to follow strict customer-centric needs and create chances for service differentiation

Clear and precise product definition based on customer centricity and customer value has to be regarded as key for sustaining competitiveness in the telco business. Due to the complexity of product design and the multi-perspective lifecycles of its modules, it is highly important to understand the scope of the product and, subsequently, to adjust it according to the customer needs. As the competitive focus shifts towards customer retention, satisfaction, market share growth, effective innovation management within a company will further become a critical success factor for service differentiation. The challenge will lie in the ability to translate upcoming technological advancements into differentiated products in accordance to customer expectations and actual market demands.

6. The inclusion of market-oriented and production-oriented perspectives has to be accomplished through solid product and module management approaches

A fundamental concept for the achievement of internal efficiency and external flexibility is the incorporation of two perspectives: the market-oriented as well as the production-oriented view. Whereas the first view is focused on entities that are products or services actually offered to the customer, the latter is more focused on modules on which basis the marketed products are assembled and consist of. Both perspectives have to be brought operationally in sync through complementary product and module portfolio management, and in an ideal world, the product configurator from the customer perspective is directly integrated with its counterpart on the production side, and vice versa. The bi-directional integration ensures consistency and thereby efficiency improvement.

7. The implementation of PLM reporting and controlling systems presents a key fundament to enable effective monitoring and a continuous improvement process

The basis for the introduction of a continuous PLM improvement process is the implementation of a performance- and value-based PLM reporting and controlling system. By this, the performance and success can be monitored on an individual product level, facilitating the operative product management process across all relevant phases. But more important, management attention can be created and enhanced by this since all relevant information can be reported in a consolidated fashion to the top management, stimulating faster decision-making and more agility in response to market demands.

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6 Outlook: Study ‘Next-Generation Telco PLM 2009’

For the sake of unfolding the potential of PLM, it is vital to understand the success factors of PLM, their interrelation to one another, as well as the linkage to these factors in regards to the strategic goals of an organization.

Basic questions in this respect include the following:

What is the current implementation state of PLM approaches in the telecommunications industry?

What impact does PLM have on profits and losses of an enterprise?

Is there any correlation between specific PLM goals and PLM design elements?

What are essential requirements for PLM in terms of multidimensional product management along the value chain?

In order to answer the aforementioned questions, Detecon and the Research Institute for Rationalization and Operations Management at Aachen University (FIR) are currently conducting an international expert study ‘Next-Generation Telco PLM 2009’ to assess the status quo and perspectives of PLM in the telecommunications industry. The objective of this study is to identify the success factors of PLM, and to assess their impact on organizational performance.

In the course of this research endeavour, telecommunications companies worldwide are encouraged to participate in order to obtain a complete and accurate view on a global scale. Experienced researchers will interview experts at senior management positions in the targeted industry. Based on the provided feedback, a statistical analysis will be carried out to validate PLM potentials, and to identify the key success factors that differentiate implemented PLM solutions within the telecommunications market.

Participants of the study ‘Next-Generation Telco PLM 2009” receive a package of valuable benefits:

PLM quick-check, carried out by the experts of Detecon and FIR to assess the maturity of the PLM implementation. This analysis should lead to constructive benchmarking for the particular PLM implementation.

Increased industry and in-house awareness of PLM.

Exclusive priority edition of the in-depth survey before publication date that should strengthen the competitive position.

The results of the study will enable participating companies to protect and strengthen their existing competitive advantages on grounds of validated PLM success factors and their organizational impact.

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7 Reading on

Abramovici, M.; Sieg, O. C. (2002): Status and Development Trends of Product Lifecycle Management Systems. In: Proceeding of International Conference on Integrated Product and Process Development, Wroclaw, Poland, p. 2122.

Ausura, B; Deck, M (2007): The new product lifecycle management systems: what are these PLM systems? and how can they help your company do NPD better? Visions Magazine. Online available at http://www.pdma.org/visions/jan03/plm.html, last visit 26.01.2007.

Doyle, Laura (2003): Using the ‘Bounding Box’ to accelerate product development: The Management Roundtable, Waltham, USA.

Golovatchev, J.; Budde,O. (2007): Next generation PLM - an integrated approach to product development in the service industry. In: Product Lifecycle Management: Assessing Industry Relevance, PLM-SP3: Interscience Enterprice Ltd, London, p. 555 - 564.

Golovatchev, J.; Budde, O.; Hong, C. (2008): Next Generation PLM-Process Management for the Development of Telecommunications Products in the Multi-Lifecycle Environment, In: Proceedings of the 2008 IEEE International Conference on Management of Innovation & Technology Singapore, p. 391-396,

Kim, J. and Wilemon, D. (2002): Sources and assessment of complexity in NPD projects. R&D Management, 33 (1), pp. 16-30

Koen P. et al. (2001), Providing clarity and a common language to the ‘fuzzy front end’. Research Technology Management, 44 (2), pp.46-55.

Kraemer, C.; Golovatchev, J. (2008): A Perfect partnership: Successful product innovations in the telecommunications market depend on the management of complexity: in DMR: Detecon Management Report, No.3, Bonn, p. 38-45

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8 The Authors

Dr. Julius D. Golovatchev is Managing Consultant for “Telco-Effectiveness- and Product-Lifecycle-Management” and Head of PLM Competence Team at Detecon International in Bonn, Germany. He holds diploma in Mathematics and a PhD in Economics. He has over 10 years of experience working as a consultant in the telecommunications industry specialising in innovation strategy and product lifecycle management. He is the author of numerous publications on the subject of innovation management and product lifecycle management, and often speaks at international conferences. He can be reached at: +49 228 700 2627 or

[email protected] Ralph Hiob is Managing Partner at Detecon International GmbH, Bonn, Germany. With over 18 years of experience in the telecommunications industry, he leads the group “Telco-Effectiveness- and Product-Lifecycle-Management” within the Competence Practice "Operations & Performance". He can be reached at: +49 228 700 2610 or

[email protected] Oliver Budde is Senior Researcher at the Research Institute for Operations Management at RWTH Aachen University, Germany. He holds a degree in Information Management. In his research, he mainly focuses on PLM and Business-IT alignment topics. He has a wide range of project experience in the telecommunications, automotive and manufacturing industries. He can be reached at: +49 241 477 05-512 or

[email protected] Chin-Gi Hong is Business Analyst for “Telco-Effectiveness- and Product-Lifecycle-Management” at Detecon International in Eschborn, Germany. He holds a diploma in Media Management, as well as a MS degree in Information and Communication Sciences. In the course of his academic and professional career, he has had extensive project and research experience in the ICT field. He can be reached at: +49 6196 903 218 or

[email protected]

The authors would like to thank Dr. Roland Keil, Sergei Holmeckis and James T. O’Neal for their great support in the preparation and development of this opinion paper.

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9 The Company

Detecon International GmbH

Detecon International is a leading worldwide company for integrated management and technology consulting founded in 2002 from the merger of consulting firms DETECON and Diebold. Based on its comprehensive expertise in information and communication technology (ICT), Detecon provides consulting services to customers from all key industries. The company's focus is on the development of new business models, optimization of existing strategies and increase of corporate efficiency through strategy, organization and process improvements. This combined with Detecon's exceptional technological expertise enables us to provide consulting services along our customers' entire value-added chain.. The industry know-how of our consultants and the knowledge we have gained from successful management and ICT projects in over 100 countries forms the foundation of our services. Detecon is a subsidiary of T-Systems, the business customer brand of Deutsche Telekom.

Integrated Management and Technology Competence

We possess an excellent capability to translate our technological expertise and comprehensive industry and procedural knowledge into concrete strategies and solutions. From analysis to design and implementation, we use integrated, systematic and customer-oriented consulting approaches. These entail, among other things, the evaluation of core competencies, modular design of services, value-oriented client management and the development of efficient structures in order to be able to distinguish oneself on the market with innovative products. All of this makes companies in the global era more flexible and faster – at lower costs.

Detecon offers both horizontal services that are oriented towards all industries and can entail architecture, marketing or purchasing strategies, for example, as well as vertical consulting services that presuppose extensive industry knowledge. Detecon's particular strength in the ICT industry is documented by numerous domestic and international projects for telecommunications providers, mobile operators and regulatory authorities that focused on the development of networks and markets, evaluation of technologies and standards or support during the merger and acquisition process.

Detecon International GmbH Oberkasselerstr. 2

53227 Bonn Telefon: +49 228 700 0

E-Mail: [email protected] Internet: www.detecon.com

Documents

Detecon Opinion Paper Next-Generation PLM - Strengthen Competitiveness in the Telco Business: An Introduction to the 4-Pillars Approach of Integrated Product Lifecycle Management