What is the Cost of PLM Upgrade?

In my recent interaction with one of customers, customer  informed me about their plan to upgrade PLM system. Out of curiosity,

Cost of PLM Upgrade

Cost of PLM Upgrade

I asked him about the cost for the upgrade. To my great surprise the costs which were considered were only a very small portion of cost involved in an Upgrade. The customer responded that their project will be executed by internal resources. So the cost of upgrade is very low.  During the discussion informed him about “Cost due to  Loss of Business”. So the next question is why there should be loss of business if PLM system is upgraded?

I explained –  “Cost due to Loss of Business“:  Organizations generally take a decision of major system upgrade only when there are major changes to the PLM software.  A major upgrade brings many UI & functionality enhancements. For a user, it changes the feels of software, so user need to un-learning and re-learning way of working . Research shows, when there is a significant change in the way user need to perform day to day activity there is a huge drop in productivity of certain amount of time. Due to this change, organization’s response to business slows down.

But it is not easy to calculate the cost associated with loss of business, as it is not immediate most of the times. But some level of cost should be apportioned to loss of business which may occur due to disruption to business.

Change of Productivity over time

Change of Productivity over time

Other major cost  involved in a upgrade project are

1. Actual upgrade cost – Cost of Resources

2. Downtime cost

3. Licence & hardware cost

4. Data clean-up

5. Productivity Loss

 

Conclusion: To calculate total cost of upgrade project may not be straight forward, but when these costs are considered it gives a better picture of “Cost of Upgrade”. Upgrade for me is more critical than initial implementation most of times.

To know more about cost of upgrade, write us @ contactus@plmindia.com

 

Posted in:
About the Author

Rahul Deshpande

Rahul is Principal Consultant at Brainwave Consulting Group – a cutting edge domain consulting group for New Product Introduction and Product Lifecycle Management.   Rahul brings over 16 years of experience in developing Technology and Business Solution for the Manufacturing Industry. He has worked with several clients in the manufacturing space in multiple roles spanning consulting, account management , Solution Architect and Program Management roles across the New Product Value Chain from Requirement / Enquiry management to launch of Product. He brings in cross functional experience covering Pre-Sales& Marketing, Business Planning, &IT Solution deployment. Rahul has worked along with the PLM ISV & Customers to define innovative solution and developed products for BOM Cost analysis and Sourcing Analytics on ENOVIA platform. He has penned different papers on usage of PLM for different processes & industries while addressing their business challenges. He brings a unique 360o view of the IT industry, and has significant contributions in the areas of IT Strategy, Program Management & Product Management.   Apart from holding a Bachelor of Technology in Electronics Rahul holds a Management degree from SIBM(Symbiosis Institute of Business Management). Rahul is associated with SIBM as visiting faculty for Innovation Management & International Business

Leave a Reply