Framingham, MA — June 3, 2003 — The market for product lifecycle management (PLM) information technology (IT) services is set to more than triple over the next five years, but companies are taking a cautious approach to their PLM projects, emphasizing an incremental approach and return on investment, according to a new research study from technology consultancy IDC.
The consultancy reports in the study, "Worldwide Product Lifecycle Management (PLM) IT Services Forecast and Analysis, 2003-2007," that spending on PLM IT services will expand from $3 billion in 2002 to $9.7 billion in 2007, representing a five-year compound annual growth rate (CAGR) of 26.1 percent.
"Relative to other solutions services markets, PLM had a good year in 2002," said Romala Ravi, manager for product lifecycle management services research at IDC. "More and more companies have been evaluating the benefits of PLM for their companies. For PLM IT service providers, this has translated mostly into requests for consulting engagements to help companies first identify how a PLM strategy would work for them and then break down a complex PLM project into small, manageable chunks."
However, IDC believes that as long as economic uncertainties continue to prevail, companies will take an incremental approach toward PLM, taking more time to scrutinize vendors and decide on projects and emphasizing upfront return on investment and self-funding projects.
Given this market environment, success factors for service providers, according to IDC, will include focusing on educating prospects about the benefits of PLM and helping them simplify the concept in implementation.
In addition, demonstrating the ROI and business case for each engagement, maintaining competitiveness and delivering on what's promised on time, within budget, and with the resources allocated to the project will be imperative.
Finally, responsiveness to clients' questions and concerns and building long-term relationships with clients by taking a long-term view on their engagements will also be key elements to a successful PLM services strategy.
The IDC study presents the annual update to the five-year forecast for the worldwide market for PLM IT services. The study identifies and quantifies the impact of recent trends and events influencing the PLM IT services opportunity through the fourth quarter of 2002 and their impact on the five-year forecast.
For more information on the PLM market, see the Global Enabled Supply and Demand Chain Series article "Product Lifecycle Management" in the October/November 2002 issue of iSource Business.
The consultancy reports in the study, "Worldwide Product Lifecycle Management (PLM) IT Services Forecast and Analysis, 2003-2007," that spending on PLM IT services will expand from $3 billion in 2002 to $9.7 billion in 2007, representing a five-year compound annual growth rate (CAGR) of 26.1 percent.
"Relative to other solutions services markets, PLM had a good year in 2002," said Romala Ravi, manager for product lifecycle management services research at IDC. "More and more companies have been evaluating the benefits of PLM for their companies. For PLM IT service providers, this has translated mostly into requests for consulting engagements to help companies first identify how a PLM strategy would work for them and then break down a complex PLM project into small, manageable chunks."
However, IDC believes that as long as economic uncertainties continue to prevail, companies will take an incremental approach toward PLM, taking more time to scrutinize vendors and decide on projects and emphasizing upfront return on investment and self-funding projects.
Given this market environment, success factors for service providers, according to IDC, will include focusing on educating prospects about the benefits of PLM and helping them simplify the concept in implementation.
In addition, demonstrating the ROI and business case for each engagement, maintaining competitiveness and delivering on what's promised on time, within budget, and with the resources allocated to the project will be imperative.
Finally, responsiveness to clients' questions and concerns and building long-term relationships with clients by taking a long-term view on their engagements will also be key elements to a successful PLM services strategy.
The IDC study presents the annual update to the five-year forecast for the worldwide market for PLM IT services. The study identifies and quantifies the impact of recent trends and events influencing the PLM IT services opportunity through the fourth quarter of 2002 and their impact on the five-year forecast.
For more information on the PLM market, see the Global Enabled Supply and Demand Chain Series article "Product Lifecycle Management" in the October/November 2002 issue of iSource Business.
