Large-scale PLM initiatives typically involve so many stakeholders and changes across the enterprise that keeping program in line requires a substantial effort above and beyond the actual work of process change, software implementation, and solution adoption.
Most business leaders readily acknowledge the importance of program governance when it comes to enterprise initiatives like PLM. Indeed, effective governance is one of the most important contributors to high performance with PLM investments, according to research by PTC Global Services and analyst firm Tech-Clarity.
In practice, however, many companies fall short because they do not dedicate sufficient effort to creating an effective approach. In successful initiatives, five steps in particular seem important:
The Right Structure. Without the right structure, a governance model is doomed to failure. Including the right people is the first requirement; most likely this means a strong executive sponsor, senior representatives from all relevant business units, and an experience program manager. It is also critical to determine whether the program lives within IT or a business unit. There are pros and cons to either choice, but it is essential to make an informed choice and to make sure that both sides are fully represented whichever choice is made.
Aligned Vision. The next step for effective governance is defining a clear vision for the program and building alignment across all stakeholders to make sure everyone is focused on the same goals. The vision should include a clear definition of the current state as well as the desired future state once the new PLM solution is in place. This sounds obvious and basic, but is too often not fully achieved with the clarity and alignment required to minimize conflicts or confusion once the program is underway.
Value Scorecard. Planning for value may also seem like an obvious step but companies often manage programs to achieve implementation milestones rather than the actual value required to ensure program payoff. To help ensure that payoff, program governance needs to pinpoint and document the specific value required, create a scorecard, and review key metrics throughout the program to gauge how well the company is realizing its goals.
Executive Escalation and Review. Complex programs like PLM require critical decisions on a regular basis to maintain momentum and keep everyone on track. Program managers and teams should make most of these decisions, but some need to be elevated to reduce the changes of infighting and gridlock as different stakeholders focus on their own relatively narrow agendas. Effective governance requires a well-designed process to escalate important issues and decisions at a corporate level to ensure the overall progress and value of the program.
Consistent Communication. Finally, effective governance needs to include a substantial, ongoing communication program to ensure that the whole organization understands program goals, timelines, scorecards, governance, and requirements for organizational change, learning, and adoption. It’s no use making all the right decisions if no one knows about them!
Effective governance may not be enough to ensure program success all by itself. You still need great technology, implementation, and adoption. Absent effective governance, however, the hurdles to success become a great deal higher.