Product Lifecycle Management Information
Product Life Cycle Management
an informational guide to understanding PLM

Product Life Cycle Management

| PLM Implementation



PLM Cost

The overall cost of a PLM solution varies depending on the provider and several factors, such as the number of users and your individual business goals. In a comprehensive chart provided by PLM Technology Guide, the elements of PLM are shown with their percentage of the total initial cost of implementing a PLM solution. This chart also shows the type of cost for each element — whether it is a one-time capital investment, annual recurring expense, one-time expense, or initial post-go-live support.


One-time capital investment:


Software - 30% of initial cost1
Cost dependent on:
  • Number & type of users
  • Required functionality or functional modules
  • Deployment option: On-premise or on-demand
  • Floating licenses or named user licenses
  • List price and discount
Hardware - 8% of initial cost1
Cost dependent on:
  • Number of users & sites
  • Configuration & performance requirements
  • Quantity of data and required disk space
  • Required system availability and uptime
  • Deployment option: On-premise, hosted or on-demand
  • List price and discount

One-Time General Expenses:


Education and Software Selection - 8% of initial cost1
Cost dependent on:
  • Understanding of PLM & PLM Market
  • Duration & thoroughness of evaluation
  • Involvement of an external PLM consultant
Process Optimization - 8% of initial cost1
Cost dependent on:
  • Number of processes & methodology
  • Size of organization & understanding of PLM
  • Documentation of existing practices and processes
  • Involvement of an external PLM consultant
Implementation Services - 25% of initial cost1
Cost dependent on:
  • Required configuration and/or customization
  • Contract terms: Fixed price or time & material
  • Hourly rate and discount
Training - 5% of initial cost1
Cost dependent on:
  • Training delivery: Vendor or Train-the-Trainer
  • Training material: Standard or custom
  • Training location: Vendor, on-site, and/or web-based
Data Migration - 5% of initial cost1
Cost dependent on:
  • Approach: Manual or automated
  • Number of source systems
  • Type of data: Metadata, structured data and files
  • Quality & quantity of data

Annual Recurring Expenses:


Software Maintenance - 5% of initial cost
Cost dependent on:
  • Number & type of users
  • Required functionality or functional modules
  • Deployment option: On-premise or on-demand
  • Floating licenses or named user licenses
  • List price and discount
Post-Go-Live Support - 5% of initial cost1
Cost dependent on:
  • Duration
  • Type and level of support
  • Response time and system availability requirements
  • Hourly rate and discount
1Approximate share of total initial cost (one-time capital investments, first-year software maintenance, one-time expenses and initial post-go-live support)



A research study conducted by AMR/Gartner shows the typical range of PLM cost, based on a multimillion dollar investment plan with deployments being supplier facing, customer-facing, or internally oriented.


PLM Costs High Average Low
Core PDM, per user seat license* (net) $6,000 $2,600 $500
Implementation Costs (multiple of SW) 2X 1X 0.5X
Maintenance Costs (per year, percentage of license) 22% 18% 12%
Additional Costs
Database Licenses $200,000 $125,000 $50,000
Internal Allocations (multiple of SW) 3X 2X 1X
Specialty Applications (per deal)
Product Portfolio Management $1.5M $500K $50K
Implementation Costs (multiple of SW) 2X 1X 0.5X
Component Supplier Management $2M $500K $100K
Implementation Costs (multiple of SW) 4X 3X 0.5X
Configurators $3M $600K $120K
Implementation Costs (multiple of SW) 4X 2X 1X

* Deployments may be supplier-facing, customer-facing, or internally oriented


In a separate research study by AMR/Gartner of PLM projects, the results (displayed in the figure below) showed the typical fully budgeted PLM project costing $750K for midsize companies and $2.6M for large companies.


PLM Cost - Project Budgets Source:  AMR/Gartner


Consider All The Costs

On the cost side, there are two basic areas of consideration: up-front costs (e.g., software configuration, data migration, licensing fees, employee training) and ongoing costs (e.g., system support, license renewals, and maintenance fees). These costs are not especially difficult for organizations to determine, but actual costs will vary according to the number of sites, users, and business functions entailed, among other factors.

Companies would do well to consider "soft costs," such as the time spent by management teaching, leading, and encouraging staff, as PLM implementations get underway. According to analysts, these costs are typically underestimated. Primary among expected benefits—and criteria for evaluating ROI—are the following:

  • Reducing engineering change orders to drive up productivity and reduce time to market
  • Lowering product costs; particularly during recent times, top-down benefits have taken a back seat to bottom-up benefits such as cost reductions
  • Improving quality and regulatory compliance

  • Sources:
    AMR/Gartner | www.gartner.com
    PLM Technology Guide | www.plmtechnologyguide.com
    Managing Automation | www.managingautomation.com