PLM on the Uptick

IDC: Project lifecycle management services market heats up

Framingham, MA  December 18, 2001  Faced with the perfect storm of increased product complexity, increased customer demands for product performance and decreased product life cycles, manufacturers will increasingly turn to product lifecycle management services to help them deliver better products cheaper and faster, according to a new study out this week from technology consultancy IDC.

Product lifecycle management (PLM) services encompass a host of other B2B acronyms, including CPC (collaborative product commerce), technology infrastructure build-out for supply chain management (SCM) and customer relationship management (CRM), and product data management (PDM), as well as functional design.

The eight PLM service providers that IDC profiled in its study reported PLM-related revenues ranging from $34 million to $209 million for fiscal year 2000. The alphabet soup of providers in the IDC study included Accenture, Andersen, CGE&Y (Cap Gemini Ernst & Young), CSC (Computer Sciences Corporation), EDS, IBM, KPMG and PwC (PricewaterhouseCoopers).

With a recent report from tech consultancy AMR Research predicting that the PLM applications market would increase by double-digit percentages in 2001 and 2002, it looks like these providers will have their hands full.

The providers reported to IDC that their target customers include a range of different company types. The top companies include Fortune 100, 500 and 1000 corporations, as well as other major global companies. Other targeted organizational types include small enterprises, governmental offices and public and public/private exchanges. According to IDC, PLM services fees range between $150 and $325 per hour, depending on a range of factors, including staff level, solution type, client, project difficulty and firm policy.

"Our research shows that PLM services fees are generally at the higher end of the fee scale because they are viewed as cutting-edge, high-level solutions intended to assist primarily large companies in achieving demonstrable competitive advantage in their respect marketplaces and industries," said Ting Piper, program manager with IDC's supply chain services research.

From a regional perspective, the IDC study showed that the Americas had the largest revenue percentage dedicated to PLM services, followed by Europe, the Middle East and Africa and Asia/Pacific. The majority of PLM revenue by services activity was focused on systems integration and consulting, with only minor participation in custom application development, operational outsourcing, support and training.