Boston, MA December 4, 2002 Worldwide spending on product lifecycle management (PLM) technology will increase from $3.38 billion in 2001 to $5.12 billion by 2005, according to a new report by technology consultancy Aberdeen Group.
PLM technologies help manufacturers make improvements in product innovation and quality and speed up time-to-market.
"Product lifecycle management is the first business strategy to affect the core value proposition of the manufacturing enterprise, the products they build and sell," said Jack Maynard, research director at Aberdeen and author of the report, "Worldwide PLM Spending: Forecast and Analysis 2001-2005."
Maynard said that since its introduction, PLM has enabled executives to drill down into the more granular, multi-faceted dimensions of the product lifecycle process and yielded significant benefits to companies in terms of resource utilization, project timeliness, financial management and risk management.
"Our historical observation is that when the economy is down, manufacturers have frequently taken the opportunity to re-think, rebuild and re-tool their operational resources," Maynard continued. "This situation is primarily driven by the fact that with reduced customer orders, resources can be diverted to improvement projects instead of meeting customer demand. This redirection will help the PLM market and ready those savvy manufacturers for the next market upturn with a powerful, efficient and reactive productive development and delivery process."
Aberdeen research indicates that total spending on PLM solutions will grow at a compound annual growth rate of 10.9 percent through 2005. The general growth of PLM will be motivated by continued adoption of PLM as a business philosophy and buttressed by mid-market usage that will be driven as solutions become more "packaged."
Despite this promising overall trend of increased levels of IT spending, the report also notes that the PLM industry has several challenges to meet, including near-term growth prospects though 2002 that will be dampened by reductions in capital expenditures. Nevertheless, the report indicates that the majority of these issues will be resolved, resulting in a favorable outlook for the PLM market.