SAP describes road ahead for its PLM software

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August 8, 2007 (IDG News Service) -- SAP AG today laid out the future path for its product life-cycle management (PLM) software over the next three-plus years.

As companies across the board struggle to differentiate themselves from their competitors, how they come up with new products has become an increasingly important area to monitor and refine. Once the domain of a company's engineering department, PLM tools are now in use across organizations to help them better track the development of products as well as to document and support those processes.

PLM is already a significant business for SAP; the company has about 5,500 customers that use its SAP PLM software, according to Hans Thalbauer, vice president of PLM solution management at SAP.

Users are looking to do more with their PLM software. They especially want the ability to draw upon information held in other applications such as ERP, customer relationship management, supplier relationship management and supply chain management tools.

At the same time the competitive landscape is heating up. SAP rival Oracle Corp. in May announced plans to acquire PLM specialist Agile Software for $495 million. That's a way for Oracle to get more serious about the technology, given that its own PLM offering attracted only a small number of customers. Other companies that have recently made major investments in PLM include German industrial giant Siemens AG, which purchased UGS for $3.5 billion, and computer-aided design software vendor Dassault Systemes SA, which acquired MatrixOne for $408 million.

Customers told SAP they want PLM to be more flexible, so the vendor decided to apply a page of its ERP playbook to SAP PLM, Thalbauer said. In September 2006, SAP committed to keeping the current version of its ERP software, mySAP ERP 2005, in place through 2010 and to provide new functionality through optional enhancement packages instead of issuing completely new releases every year or so. SAP will take this same approach with PLM going forward, providing regular extensions to the software, which customers can then choose to adopt (or not adopt) on their own schedules, he added.

The first PLM enhancements will appear by the end of the year, when new processes for portfolio planning will be introduced. Then in 2008, SAP plans to simplify the software's user interface and tailor the display of information to reflect the role of the individual accessing that data, Thalbauer said. There will also be upgrades designed to provide more contextual information, he added. For instance, after changing a component in a product design, an engineer would be able to easily view data such as the inventory on hand for components and the locations of suppliers of those components.

In addition to working on new products in-house, many companies collaborate with external partners, and PLM software needs to better facilitate that type of usage. Capabilities designed to support collaboration on a global basis will appear next year, Thalbauer said.

Coming in 2009 will be the ability for users to centrally manage all of their product-specific information, including ideas, designs and requirements, and then move that data around the company. An enhancement package due in 2010 will help companies bring in information from products already out in the field via RFID tags, bar codes or other sensors and use that data in the design of new offerings.

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