Detecon Study Next-Generation Telco Product Lifecycle Management: How To Overcome Complexity in Product Management by Implementing Best-Practice PLM

Study
Next Generation Telco

Product Lifecycle
Management
How to Overcome Complexity in Product Management
by Implementing Best-Practice PLM
In Cooperation with:
We make ICT strategies work

Product Lifecycle Management Study <
Next Generation Telco

Product Lifecycle Management
How to Overcome Complexity in Product Management
by Implementing Best-Practice PLM
September 2010
In Cooperation with:
© Detecon International GmbH 1

> Study Product Lifecycle Management
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2 © Detecon International GmbH

Table of Contents
1. Management Summary 5
2. A Wind of Change in the Telecommunications Industry 10

2.1 Status Quo and Changing Fields 10
2.2 A New Challenge on the Horizon: Product Complexity 10
3. PLM Framework for Communication Service Providers 13
4. Study Goals and Design 16

4.1 Study Goal 16
4.2 Research Design 17
4.3 Respondents Structure 18
4.4 Complexity Metric for Clustering 19
5. PLM Design Elements for Coping with Complexity 21

5.1 Design Domain ‘PLM Strategy’ 21
5.2 Design Domain ‘PLM Process’ 25
5.3 Design Domain ‘Product Architecture’ 29
5.4 Design Domain ‘PLM IT Architecture’ 32
6. PLM Impact on Complexity Management Targets 36

6.1 Target Domain ‘Time’ 37
6.2 Target Domain ‘Costs’ 40
6.3 Target Domain ‘Process Quality’ 42
6.4 Target Domain ‘Product Quality’ 48
7. Key Recommendations 52
7.1 Key Recommendations Applicable to All Groups 53
7.2 Key Recommendations Applicable to ‘Global Elephants’ 56
7.3 Key Recommendations Applicable to ‘Emerging Zebras’ 58
8. Achieving PLM Excellence 60
9. Acronyms 62
10. The Authors 63
11. The Company 64

Table of Figures
Figure 1: Impact of a Holistic PLM on Complexity 5
Figure 2: Three complexity groups of participating carriers 6
Figure 3: Overview of 23 PLM Design Elements and 16 Target Elements 7
Figure 4: Overview of Key Recommendations for ‘Global Elephants’ and ‘Emerging Zebras’ 9
Figure 5: Effects of Unmanaged Complexity on Time, Cost, Process and Product Quality 12
Figure 6: Holistic PLM Framework 14
Figure 7: Study Goal 16
Figure 8: Worldwide Coverage 18
Figure 9: Demography of Participants 19
Figure 10: Definition of Three Complexity Groups 20
Figure 11: Overview of 23 PLM Design Elements 21
Figure 12: Implementation Degree of PLM Strategy Design Elements 22
Figure 13: Implementation Degree of PLM Process Design Elements 25
Figure 14: Implementation Degree of Product Architecture Design Elements 29
Figure 15: Implementation Degree of PLM IT Architecture Design Elements 32
Figure 16: Overview of 23 PLM Design Elements and 16 Target Elements 36
Figure 17: Impact of Target Domains on PLM Curve 52
Figure 18: RAPIT Approach for PLM Optimization 61

1. Management Summary
The increasing convergence of markets and products, shifting business models as well as increased customer
expectations have created an unseen level of complexity for telecommunications providers. In the telecommunications
industry, complexity has literally exploded in the three dimensions of product, processes and IT – simply based on
the fact that carrier product portfolios have become much more diverse, and therefore have to be supported by
a historically grown complex process and systems landscape. In order to be in a position to cope with this new
complexity dilemma and to safeguard sustainable competitiveness, it is vital for carriers to implement an integrated,
holistic approach for managing the different dimensions of complexity.
Based on many years of consulting experience in telecommunications, Detecon International’s PLM experts have
developed a PLM framework in which the four functional design domains of strategy, process, product architecture
and IT architecture are treated as parts of an integrated PLM approach.
The study at hand “Next Generation Telco Product Lifecycle Management”, conducted by Detecon International and
by the Research Institute for Operations Management at RWTH Aachen University, represents the first international
empirical survey studying the current status of PLM implementations in the telecommunications industry in a
holistic and comprehensive manner. It was set up essentially with the objective to assess whether such an integrated
PLM approach can be effective in managing and controlling the rising complexity. In order to do so, we defined
target domains for complexity management with regard to time, costs, and process and product quality. The
following figure depicts the underlying principle of how these target domains impact the PLM curve:
Leveling the PLM Curve by Meeting Complexity Targets
Product Quality
Effects
Time Effects
Revenue/Profit
Benefit of product
+ Process Quality
0 Effects
-
Increase of re-usability
Cost Effects
Innovation
Realization Launch Growth Maturity Saturation Exit
Planning
Chronological Sequence
Legend: Cash-Flow Performance without PLM Cash-Flow Performance with PLM

Revenue Performance without PLM Revenue Performance with PLM
Figure 1: Impact of a Holistic PLM on Complexity

For each of the four design and target domains, detailed design and target elements were defined. The validation
of the integrated PLM approach was based on assessing whether plausible correlations exist between the design
and target elements. Essentially it was examined which design elements have the greatest impact on what specific
target elements. With this information at hand, carriers are able to evaluate which design elements are the most
critical for their specific context in order to leverage the potential of PLM in the target domains of time, cost,
process quality and product quality.
Naturally the complexity level of carriers varies, and it is obvious that a design element may have a completely
different impact at different levels of complexity. A sophisticated workflow management system (WFMS) for
example could work well for a global full service provider, whereas the same PLM design element might have a
rather contrary effect on an organzation that is only active on a regional basis.
So the participating carriers were divided into three groups according to their complexity, and statements were
derived for each complexity level. The complexity of each participating company was assessed in the dimensions
of multiplicity, variety, interaction and dynamics. Based on this evaluation, three groups were defined (figure 2):
Highly diverse
I
product and services portfolio

More than 30 million customers
I
Highly turbulent market

I
environment
(typically global player)
Moderately Product and

I
Global Elephants I
diverse product service portfolio

and services portfolio with low diversity
Less than
I
Less than
I
14 million customers 2 million customers

Semi-regulated
I
Less dynamic market and

I
environment or a market regulated environment

with limited penetration (typically regional player)
(typically multi-national or
national player)
Emerging Zebras Protected Penguins
Figure 2: Three Complexity Groups of Participating Carriers

In order to find answers to these questions, we developed a detailed questionnaire, covering all design and target
elements in the respective domains. Altogether, 23 design elements and 16 target elements were identified (see
Figure 3).
For the definition of the design elements, a factor analysis method was used in order to statistically verify the
underlying compositions. Based on these validated design and target elements, a correlation analysis was applied
to measure the interdependency between the implementation degrees of each design element with the complexity
management targets. The impact was measured by correlation indices between the PLM design elements and the
complexity targets. Lastly, the findings were organized in accordance to the three different complexity groups in
order to reach specific conclusions for each level of complexity. Interviews were conducted with PLM professionals
at the executive and senior management levels from more than 50 telecommunications carriers worldwide.
Time Cost Process Quality Product Quality

PLM Targets
Process & System Provisioning

Time-to- Flexibility of Efficiency in Product Market
Waiting Time Implementation Churn Rate Performance in
Market PLM-Process CNM Launch Quality
Costs the Value Net
Human Effectiveness Reduction of
Delay in Value Net
Delivery
Resource of PLM Performance Technical FAB Quality
Performance Processes Deficits
Reliability of
Information
Availability PLM
Processes
Support
PLM Strategy PLM Process Product Architecture PLM IT Architecture
Transparency Modular Extended

PLM- Strict Empowerment Modular FAB Technical Data
PLM Design Elements
of Product & Collaboration

Governance Stage-Gate of Employees Processes Production Management
Portfolio Perspective Tools
Engineering Workflow
PLM Process Customer Need Retirement Process Modular Market Application
Change Management
Variants Management Management Standardization Perspective Integration
Management System
Functional Integration of
Alignment of Product Model with Product Portfolio
PLM Reporting & Controlling Integration of Value-Adding
Product Data Analysis Tools
Departments Partners
Manageability of
PLM Process
Value-Adding
Competence
Partners
Figure 3: Overview of 23 PLM Design Elements and 16 Target Elements

Through the study, it could be validated that there is indeed an impact of PLM design elements on the target
domains. PLM should no longer be understood solely as a matter of IT or product development, but recognized
as a comprehensive and highly critical management approach which can potentially lead to effective gains across
an entire enterprise. As such, PLM has to be addressed in an integrated and holistic fashion in order to achieve
sustainable competitiveness and market success in a highly dynamic industry such as telecommunications.
The following design domains should be targeted for an integrated PLM implementation:
s PLM Strategy – ensures alignment of products and portfolio with actual and potential market demands,
and provides the guiding framework for PLM process execution.
s PLM Process – facilitates execution of the collaborative process (efficiency goal) and the alignment of
activities with the strategic PLM goals of the company (effectiveness goal).
s Product Architecture – enables product component reusability by defining constraints and rules for
decomposing product functionality into modules with product data models.
s PLM IT Architecture – increases PLM process execution efficiency by providing a best-of-breed framework
of IT components that ensures an optimal IT-to-process fit.
Overall the study has revealed severe shortcomings with regards to PLM implementation in most carriers surveyed.
To begin with almost 80% of the participating carriers do not have a systematic approach to retirement management
in place – this is a huge problem, because it creates more complexity and it is counterproductive to the general
objective of achieving lean product development. Moreover, 40% of carriers do not have a modular product
concept implemented, and over 60% of carriers only evaluate their product portfolio once a year – or even less
often.
Among all correlations between design and target elements that were identified, the most interesting and revealing
highlights are listed below. These recommendations are applicable to all groups – independently of the complexity
level of a carrier:
Time Improvement Action Points:

s )MPLEMENT7&-3TOREDUCEWAITINGTIMEBETWEENDIFFERENTDEPARTMENTS
s )NCREASEYOUR0,-PROCESSCOMPETENCETOREDUCETIME TO MARKET
Costs Improvement Action Points:

s )MPLEMENTAMODULARMARKETPERSPECTIVEFORPRODUCTSTRUCTURINGTOREDUCECHURN
s )MPLEMENTENGINEERINGCHANGEMANAGEMENTMETHODSTOINCREASESTAFFPERFORMANCE
Process Quality Improvement Action Points:

s 5TILIZEPRODUCTPORTFOLIOANALYSISTOOLSTOINCREASE0,-PROCESSEFFECTIVENESS
s )NTEGRATEYOURVALUE ADDINGPARTNERSTOINCREASERELIABILITYOFYOUR0,-PROCESSES
Product Quality Improvement Action Points:

s 2EDUCEPRODUCTDElCITSBYOPTIMIZINGINTEGRATIONOFFUNCTIONALDEPARTMENTS
s )MPROVEPROVISIONINGPERFORMANCEINTHEVALUENETUSINGMODULAR&!"PROCESSES

Besides these general findings and recommendations applicable to all groups, it was also found that the impact of
design elements does vary according to the specific complexity level of a carrier. For the ‘global elephants’ group
the overarching principle is to “harmonize, enable diversity and conquer.” Since complexity is steadily rising due
to increasing product diversity accompanied by complicated IT and process structures; it should be considered
mission-critical to implement means that demystify complexity and drive harmonization in the first place. With
increased transparency, ‘global elephants’ should then focus on creating diversity in order to fend off the threat of
losing revenue through commoditization of traditional services. In order to do so, it is vital to enforce the concept
of modularization in the relevant dimensions of product structure, processes and IT.
For the ‘emerging zebras’ group the overarching objective is to “standardize, enable integration and conquer”.
Coming mostly from a background with voice-centric product portfolios, standardization and integration within
all design domains will become increasingly important in order to increase effectiveness and efficiency, and it will
empower the carrier to address customer needs correctly by adequately managing its PLM implementation. The
‘protected penguins’ were not assessed any further in terms of correlative measures, as increasing complexity is less
of an issue for this group of participants.
The main findings for the two dominant complexity groups within the pool of participants are summarized in the
following table.
Complexity Groups
Global Elephants Emerging Zebras
Harmonize, enable diversity Standardize, enable integration

Overarching Principles
and conquer and conquer
Harmonize and integrate your Increase integration of your

Time application landscape to reduce application landscape
waiting time between departments to reduce time-to-market
Complexity Management Targets
Utilize KPIs to increase Standardize your processes to

Costs portfolio transparency and increase customer satisfaction
reduce launch costs and reduce churn
Create process variants to improve

Ensure empowerment of employees
Process Quality information logistics in
to improve information availability
product development
Manage your value-adding partners Improve your strict stage-gate

Product Quality actively to improve implementation to increase
overall product quality product market launch quality
Figure 4: Overview of Key Recommendations for ‘Global Elephants’ and ‘Emerging Zebras’

2. A Wind of Change in the Telecommunications Industry

2.1 Status Quo and Changing Fields
The telecommunications market has changed significantly over the past decade. Traditional products and
services offered by carriers – such as voice communication and data messaging – have become more and more
commoditized, resulting in declining prices and new communication models shifting customers away from the
traditional telco core business. Voice over IP (VoIP), unified communications, social media – all of these represent
a new communication paradigm that is characterized by a shift towards allowing users to interact in a many-to-
many, collaborative and multi-modal fashion in real-time from any place at any time by the use of multiple means
of personalized IP-based digital information and communications services.
Based on the evidential convergence bringing together once-separated markets, lots of new players have entered
the original playing field of carriers and have thus moved into the telco value chain. The market is slowly transitioning
from a telco-controlled environment to an open ecosystem that is essentially controlled by consumers having a
variety of access channels available to them – with non-telco players being well-positioned to become integrated
platforms with a direct and steady customer relationship providing new kinds of integrated services.
Telco carriers nowadays are faced with competition not only on a network and access level (e.g. mobile network
vs. fixed network vs. cable network), but also from the content delivery side (e.g. Google), social networking
services companies (e.g. Facebook, LinkedIn) and from original equipment manufacturers (OEM; e.g. Apple, Nokia,
Samsung). This development mainly results from two driving forces: the standardization of technologies (network
and device convergence) and the increasing customer need for personalization.
In order to alleviate the threat of quickly getting outpaced by these changing market dynamics, carriers are forced
to generate additional revenue and to grow and diversify into new lines of business. Carriers must adopt the new
communications paradigm fast in order to defend their present position in the future market of IP communications.
The ability to master these dynamics on a management level is a critical success factor for carriers, and it is strongly
linked with the implementation of the appropriate management methods and tools for coping with increasing
product and service complexity.
2.2 A New Challenge at the Horizon: Product Complexity

The concept of complexity management has arrived in the telecommunications industry. Interwoven product
bundles pressure carriers to achieve operational excellence while providing mass-customized services to evermore
demanding customers at the same time.
Until recently the matter of complexity was not much of an interest for product management professionals in
the telco industry, because the symptoms of badly managed complexity were mostly addressed through short-
term revenue assurance or cost-cutting programs on support activities. However, fighting the symptoms with
these measures cannot be sustained over the long run in a hypercompetitive environment – hence the increasing
importance of complexity management. Complexity that is not being managed from the very beginning of a
product lifecycle leads to higher costs in the later lifecycle stages (e.g. not having anticipated the overall complexity
of offering a triple play product, and therefore neglecting the crucial role of customer care management in the
launch phase). In consequence, customer satisfaction decreases as the telco provider fails to live up to customer
expectations.
Due to the specific telco industry characteristics, complexity is inherent and therefore cannot be eliminated in its
entirety – only a state of unmanaged complexity has to be avoided by all means. Therefore the main objective of
complexity management is to take control over the growing complexity and to make it manageable. This study
introduces and validates a holistic and integrated PLM approach as a means to counteract the prevailing complexity
dilemma.

The main sources for product lifecycle complexity can be categorized in three dimensions: product, process and IT
complexity. These complexity dimensions are briefly described in the following sections.
Product Complexity
Providing a unified product experience to the customer requires the synchronization and coordination of multiple
lifecycles that in sum are perceived as one product from a customer perspective. Therefore carriers have to
ensure that all product components delivered by 3rd party suppliers are fully integrated in a seamless fashion and
provisioned at the same global quality standards as the rest of the product. At the same time further constraints on
the integration of products have to be overcome.
The growing need to deliver mass-customized products and services in order to satisfy more and more niche
markets with diversified customer segments makes product and service modularization a necessity in order to be
able to achieve high reusability rates of product components. With increasing relevance of managing the interfaces
between product components, the management of partner collaboration becomes a critical requirement of PLM.
However, coping with these challenges is a Herculean task, and not meeting these requirements can lead to serious
consequences.
Process Complexity
The complexity of PLM and operational service processes such as fulfillment, assurance and billing processes
increases with the number of interactions with subscribers or partners and the variety of the product bundles. A
more complex product has other requirements on PLM and service processes than a traditional voice product.
An increasing product variety usually brings with it an increased variety in the types of complexity aspects involved.
The development, launch and retirement processes become more complex due to increased coordination
requirements and due to the multiplicity of product components that have to be assembled. Moreover different
products typically require several service processes that are handled via multiple ordering channels such as on-site,
call center or online catalog. In terms of billing, the management of highly dynamic tariff structures as well as of
inter-company invoicing and mediation increases the complexity of billing processes.
IT Complexity
The business application landscape of a telco carrier is typically characterized by the use of multiple different IT
systems, since standard enterprise solution systems that would meet all business requirements are generally not
available. Apart from heterogeneous bundles of IT-Systems, another IT complexity aspect can be found in the fact
that multiple silo-like data sources are typically in place – managed separately from one another without being
aligned or integrated. This diversity on the IT-system level as well as on the data level is the main driver of IT
complexity – leading to high maintenance costs.
Due to the fact that processes and product service bundles in telco are getting more and more complex, the need
for IT support increases exponentially. One example is the increase in the automation level of complex processes, as
well as seamless and real-time application integration within a fragmented systems landscape. Therefore a critical
task of integrated PLM is to maintain consistent information logistics of products and customer data throughout
the product lifecycle and throughout all relevant processes.

The effects of unmanaged complexity in these three perspectives are diverse and can roughly be categorized in
time, cost, and process and product quality. The most critical effects are listed in the following table:
Lead to issues
with regards to
Q Risk of delayed Q Hidden Costs Q Unmanaged Q Product deficits

product launch customer needs leading to
Q Cross
Unmanaged Q Risk of subsidization Q Reduced
customer
Product interruptions to complaints
Q Limited
employee &
Complexity clarify unknown customer Q Churn ratio
reusability
errors satisfaction
Q Time-consuming Q Overhead in Q Inconsistent level Q Unpredictable

interim & process execution of knowledge revenue
Unmanaged delivery Q Cost intensive Q Missing process
assurance results
Process processes delivery & interim Q Risk of non-
transparency
Complexity Q Risk of increased processes reproducible
Q Risk of
manual override quality
interruptions
Q Unknown Q Missing trans- Q Complex Q Service

processing parency and realization of Interruptions
duration hidden cost driver implementations Q Critical
Unmanaged related to IT- utili-
Q Unknown Q Interoperability performance for
IT Complexity reliability and zation, interfaces
testing becomes end-user
performance and maintenance
more challenging
Figure 5: Effects of Unmanaged Complexity on Time, Cost, Process and Product Quality
As the starting point to alleviate and resolve this complexity dilemma, it is important to identify the complexity
drivers at first, and to continuously monitor and control them. Complexity that is well managed will improve
time, costs, and quality both on the process and product levels. The ability to correctly manage complexity will
increasingly determine business performance and lead to a competitive advantage in the long run. Hence, gaining
control over the effects of unmanaged complexity turns these four dimensions into targets.
In the following chapter, a holistic PLM framework is introduced that can be considered as an effective weapon for
coping with complexity.

3. PLM Framework for Communication Service Providers

As discussed in the previous chapter, the telco business is getting increasingly complex due to a number of reasons.
Complexity is evident in the different perspectives of product, process and IT – so an integrated approach to
counteract complexity is needed. Product Lifecycle Management (PLM) is a key to operational excellence for
carriers as it offers companies a systematic approach to coping with the complexity challenge.
Definition of PLM
PLM is a strategic business approach for managing a company’s products and services throughout their lifecycle
in the most effective and efficient way: starting with the original idea, through the design, marketing and
withdrawal phases. Holistic PLM is characterized by an integrated view on PLM strategy, PLM process, product
architecture and PLM IT architecture, as well as their alignment to one another in order to monitor and control
complexity along the product lifecycle.
Based on many years of consulting experience in telecommunications, Detecon International’s PLM experts have
developed a PLM framework in which the four functional design domains of strategy, process, product architecture
and IT architecture are treated as parts of an integrated PLM approach:
s 0,-3TRATEGY
s 0,-0ROCESS
s 0RODUCT!RCHITECTURE
s 0,-)4!RCHITECTURE
This PLM approach provides telco management with best-practice management tools that are collectively exhaustive
and mutually exclusive in the four design domains – enabling management to evaluate and to integrate the right
components within their organization according to the specific complexity level of the company. The strengths and
opportunities inherent in such a PLM approach can be summarized as follows:
s )TISHOLISTICINASENSETHATITREmECTSALLlELDSFORACTIONFROMAMANAGEMENTPERSPECTIVE
s )TPROVIDESAWIDERANGEOFBEST PRACTICEMANAGEMENTTOOLSTHATSIMPLYNEEDTOBECONlGUREDACCORDING
a company’s individual complexity level.
s )TSAFEGUARDSTHEBUSINESS TO BUSINESSALIGNMENTAS0,-ISACOLLABORATIVEPROCESSWHICHINCLUDESTHE
coordination of departments within a company, as well as the management of external parties.
s )TSPANSTHEENTIREPRODUCTLIFECYCLESTARTINGWITHTHEEARLYPHASEOFINNOVATIONMANAGEMENTTHROUGH
launch and market management all the way to the retirement phase.
In figure 6, the PLM framework is depicted illustrating the interdependencies of each domain and showing the
interrelations within the organizational environment.

Corporate Strategy
Enterprise Innovation Strategy Marketing Strategy

Processes
Innovation Output Innovation Potential Product Portfolio Management
PLM Domains
Enterprise
PLM IT IT Architecture
Customer Needs Management Lifecycle-oriented
Strategy
Portfolio Management Architecture

PLM
Strategic PLM Process Management

Process Controlling Process Organization Process Optimization
Strategic
DSS Business IT
Determines
Landscape
Multi-Project
Integration with Partners on Vertical, Horizontal and Lateral Level Management
System
Document
Market
Process
Integration
Management
Supply Chain Development
patterns
PLM
System
Ressource Development
IT-Service Development
Marketing
Idea Evaluation Planning Implemen- Launch Management Retire-
Technology Generation tation ment
Mgmt.
Supports
Collaboration
Business Tools
Operational
....
Empowerment of People Workflow Business IT

Management Landscape
Shapes System
Product Data
Product Management
Product Meta Model (Market Perspective) Catalogs System
Instantiation
Architecture
Product
Fulfillment
Defines
Process Meta Model

Assurance Integra-
CRM
Middleware
ERP
tion-
Resource Meta Model (Production Perspective) Billing
Layer /DBS/OS
(SOA)
Resource
Product Data Information Framework (PDIF) Model
Enterprise Data Model Legend
Customer Domain Employee Domain ….. Controlling Information flow
Customer Contract Invoice Employee Customer Products A

Interdependency Alignment
Figure 6: Holistic PLM Framework
PLM Strategy
The purpose of the design domain ‘PLM strategy’ is the alignment of the innovation and marketing strategy with
the overall PLM strategy to allow for a synchronization of the product development, market management and
retirement processes. In order to do so, a strong link to customer needs management has to be ensured, as well
as the safeguarding of lifecycle-oriented product and project portfolio management – controlling and monitoring
the innovation and product pipelines. A strategic PLM process management defines the cornerstones of the PLM
process by introducing PLM process variants according to innovation level and by implementing consistent PLM
process reporting.
PLM Process
The purpose of the design domain ‘PLM process’ is to facilitate the execution of collaborative processes (efficiency
goal) and the alignment of activities with the strategic PLM goals of the company (effectiveness goal). The PLM
process specification includes the definition of the relevant activities and their sequence and configuration. In
addition, the functional integration of relevant departments needs to be defined in order to ensure proper process
execution – this is especially important since numerous departments are involved and have to work collaboratively
as determined by the interdisciplinary nature of PLM. The operational PLM process can be split into 7 phases
starting with the product idea phase and ending with the retirement management phase. In all of this the focus is
on the definition of organizational interfaces within the company, as well as with external parties, such as content
or component suppliers.

Product Architecture
The purpose of the design domain ‘product architecture’ is to enable product component reusability by defining
constraints and rules for decomposing the product functionality into meaningful modules with coherent product
data models – critical for ensuring mass customization of telco products. For communication service providers,
the product structure includes modelling the product service modules from a market perspective, as well as FAB
processes and technical resources modules. A product data information framework ensures efficient information
logistics in order to translate the conceptual models into operations.
PLM IT Architecture
The purpose of the design domain ‘PLM IT architecture’ is to increase the efficiency of PLM process execution by
providing a best-of-breed framework of IT components that ensures an optimal IT-to-process fit. Instead of a one-
size-fits-all approach (meaning one software system for the support of the entire PLM process), it is more effective
to rely on an IT architecture that reuses and respectively customizes existing components as far as possible. These IT
building blocks can be categorized in three layers: decision support system, process support system and integration
layer.
Together these four design domains represent a framework that covers all management-relevant aspects that need
to be considered in a holistic manner in order to ensure an optimal complexity management.
Before detailing each of the four design domains to assess the underlying design elements, the study goal and
research design and methodology are described first in the following section. Please note that in the Detecon
Opinion Paper “Next Generation PLM – Strengthen Competitiveness in the Telco Business” (2008/10), the
framework is described in more detail.

4. Study Goals and Design

Having identified the need for a systematic management approach for coping with increasing complexity, this
study was set up with the objective to identify proper PLM design elements and to evaluate their impact on PLM
targets – ultimately leading to operational excellence and helping carriers to achieve a state of managed complexity.
Within the next section, the study goals are outlined in more detail. Based on these goals, the derived research
design methods are presented that ensure the reliability and consistency of the statements given. Following that,
details about the respondents’ structure are provided as evidence for the representativeness of this study.
4.1 Study Goal

The goal of the study is to provide carriers with a comprehensive list of the right PLM design elements that help
to achieve operational excellence and to take control over an increasing complexity. We also defined the following
two subordinate objectives:
s %VALUATINGTHECOMPLEXITYLEVELOFCARRIERSASAPREREQUISITEFORCLUSTERINGTHEPARTICIPANTS
s )DENTIFYINGANDVALIDATINGTHE0,-DESIGNELEMENTSINCONJUNCTIONWITHVARYINGDEGREESOF0,-TARGET
implementation
Path to PLM Operational Excellence
Appropriate alignment of complexity

PLM 3 level and PLM design element
Operational implementation and configuration
Excellence
enables
Ladder of success
Impact on PLM Targets

% PLM target
Specific PLM design elements

High 2 achieve PLM targets for a given
Mid complexity level
Low % PLM Design element
Leverage
PLM Design Elements
Evaluate potentials of
Have been 1
implemented
PLM design elements
Element a Element b
PLM Design Elements Candidates
Figure 7: Study Goal
Our underlying hypothesis is that companies with a higher complexity level are more prone towards a more
sophisticated and varied set of design elements than companies that provide products and services in less complex
environments. Based on this, it is assumed that the appropriate set of PLM design elements for a specific company
depends on their complexity level. So the participating carriers were divided into groups according to their
complexity, and statements were derived for each complexity level. Based on the findings of this study, carriers will
be able to select the appropriate design elements according to their specific complexity level.

4.2 Research Design

The challenging goals of this study imply a scientifically rigorous and at the same time pragmatic approach. The
fact that a multi-faceted topic such as PLM is investigated in a holistic manner, a cross-departmental view is required
which meant a high coordinating effort for the participating companies. Therefore the study was carefully designed
so that pre-defined goals could be achieved with accurate statements provided by a relatively small sample size –
minimizing effort on one hand, while maximizing explanatory power and validity on the other.
4.2.1 Approach
The approach can be separated into the following three phases:
Preparation Interview Management Analysis
Conduction
Grouping of
Elaboration Conduction of non-
participating Conduction Interpretation
of PLM Derivation Identification of 2h parametric Evaluation of
companies of factor of statistical
design and of study interview tests correlations
into clusters analysis analysis and
elements validation of participants session comparing between
according to for PLM derivation of
and targets questionnaire and interview on-site or the means design
identified design key findings
by industry with coordination via web of design elements and
complexity element
experts pre-tests conferences elements targets
level and targets
Step 1: Preparation
The holistic PLM framework for carriers was developed based on previous consulting experience. This framework
was used as an analysis raster for identifying the relevant PLM design elements within each of the four building
blocks, as well as the most important PLM targets which impact complexity.
With the definition of PLM design elements and targets as a starting point, a questionnaire was developed and
validated via pre-tests with industry experts. Based on this feedback, the final questionnaire was developed. The
questionnaire consisted of 90 questions and was structured according to the four design domains of the framework.
Step 2: Interview Management

More than 1,000 senior managers from leading telecommunications providers worldwide were contacted for
participation. A typical interview session was conducted either on-site or via web-conference with an approximate
duration of 2 hours. On average, two managers from the participating company attended these meetings. After
the interview, all answers on the questionnaire were reviewed by the participating company and final feedback was
incorporated accordingly.
Step 3: Analysis
Based on the complexity metric, a cluster analysis was carried out segmenting the companies into three complexity
groups (see section 4.4). Afterwards, a factor analysis was conducted for the PLM design elements and targets
defined in phase 1 in order to confirm their composition. In order to evaluate whether the implementation degree
for a given PLM design element depends on the complexity level of the company, a non-parametric test comparing
the means was conducted. These statistical findings along with the correlations between PLM design elements and
targets were interpreted as a final step to derive key recommendations for coping with complexity by means of a
holistic PLM.

4.2.2 PLM Design Elements and Complexity Management Targets

During the initial conception phase, all relevant PLM design elements and targets were identified and carefully
selected along with interrelated metrics based on prior consulting and research projects. The PLM framework
outlined before with its four design domains served as an analysis raster in order to ensure completeness, consistency
and mutual exclusiveness of each PLM design element.
4.3 Respondents Structure

Most of the interviews were conducted from May to October 2009. The pool of participants consisted of a large
number of carries including fixed line, wireless and broadband providers with varying degrees of telco value chain
coverage. The participating companies were selected from more than 30 countries. As shown in figure 8, the
study is to be regarded as a global endeavor as companies from all around the world have participated. However,
companies from Central and Eastern European countries were overrepresented with a quota of 50% of the total.
Figure 8: Worldwide Coverage
Besides the importance of achieving participation on a global scale, it was critical to interview the right people in
the respective companies. Since PLM is an interdisciplinary topic, interviews were conducted on average with two
senior managers. In most cases, one representative from the marketing department and one representative from a
technical department were interviewed, mostly members of top or senior management (figure 9).
Another important aspect for evaluating the outcome of the study is the degree of experience of the interviewed
representatives. More than 61% have more than 10 years of experience in the telecommunications sector. Through
the participation of senior managers with a long track record in the international telco business it was possible to
record a multifaceted understanding of PLM implementation within the study.

Organizational Unit Position of the Interviewee Years of Experience
5% 7% 5% 2%
3%
10% 12%
30% 3%
37%
20%
43% 61%
18% 46%
R&D Production Strategy Executive board Head of department Other Less Between 3 More than
than 3 years and 10 years 10 years
Service Marketing Other Board of directors Team leader Staff member
Company Statistics
Key Company
Segment Amount Percentage Min. Avg. Max.
Statistics
MNO 18 33% Number of Customers 400 k 14 Mio 140 Mio
FNO 33 67% Revenue $56 Mio $3.789 Mio $26,8 Mrd
Figure 9: Demography of Participants
4.4 Complexity Metric for Clustering

In order to be precise in the statements and to derive specific recommendations, the interviewed companies had
to be clustered into different complexity groups. Accordingly a complexity metric was applied in order to compile
homogenous groups. The metric used for measuring complexity originates from the manufacturing industry, and
it was adapted here with specific telco characteristics in mind. The dimensions used to describe complexity can be
summarized as follows:
s -ULTIPLICITYnMEASURINGTHENUMBEROFCUSTOMERSANDCUSTOMERSEGMENTSOFACARRIER
s 6ARIETYnMEASURINGTHEPRODUCTANDSERVICESPECTRUMOFACARRIER
s )NTERACTIONnMEASURINGTHEAMOUNTANDINTENSITYOFPARTNERSHIPSOFACARRIERACROSS
the entire product lifecycle
s $YNAMICSnMEASURINGTHETECHNOLOGICALANDECONOMICDYNAMICOFANECONOMY

Based on this complexity metric, the participating companies have been evaluated in the respective dimensions. In
order to identify representative groups of companies with a homogenous complexity level, a statistical method was
applied to cluster the companies based on their characteristics in the four complexity dimensions. As a result, three
different complexity groups were defined as shown in figure 10.
Very limited Limited Multifaceted Very multifaceted

Variety product spectrum product spectrum
Standard
product spectrum product spectrum
2.1 Mio 5.8 Mio 14.1 Mio 35 Mio 85.5 Mio

Multiplicity customers customers customers customers customers
Above the level

To a strong To a far To a Level of a large
Interaction lesser extent lesser extent lesser extent European carrier
of a large
European carrier
Turbulence Index Turbulence Index Turbulence Index Turbulence Index Turbulence Index
Dynamics 0.0 – 0.2 0.2 – 0.4 0.4 – 0.60 0.6 – 0.8 0.8 – 1.0
Regional Carrier (Multi-)National Carrier Global Carrier

Protected Penguins Emerging Zebras Global Elephants
Figure 10: Definition of Three Complexity Groups
Protected Penguins
“Protected penguins” represent the group with the lowest level of complexity. This group typically has a limited
number of products or value-added services and an inflexible tariff structure. The degree of interaction across the
product lifecycle is limited and hence a limited vertical integration is typical for this group. The low level of dyna-
mics, as indicated by the relatively low turbulence index value, results mainly from a regulated environment, as well
as from a limited penetration of ICT within the overall economy.
Emerging Zebras
“Emerging zebras” represent the group with an average complexity level. Companies within this group offer a
greater variety of products and services, focus more strongly on the customer, and create additional revenue from
niche markets. Such telecommunications companies typically have a medium number of customers and are associ-
ated with a higher level of interaction than the penguins’ – implying higher coordination efforts. The dynamics of
the markets in which emerging zebras’ participate are medium – with a medium degree of ICT penetration as well.
Global Elephants
“Global elephants” are characterized by a huge variety of their product and service portfolio. A big spectrum of
product components is offered to markets where they are adapted at the fastest rate due to the high market dynamics.
The tariff structure provides for greater choices and flexibility. Other characteristics of “global elephants”are very
high numbers of subscribers, as well as strong and multiple interactions with partners within their value network
and throughout the lifecycle of their products. The high turbulence index indicates a strong penetration of ICT in
the respective markets.

5. PLM Design Elements for Coping with Complexity

In chapter 3 we introduced the integrated PLM framework. It is the goal of this chapter to present the PLM
design elements that exist within each of the four respective design domains of strategy, process, product and IT
architecture. This will serve as the basis for chapter 6, in which the complexity management targets are introduced
– along with design elements that have shown the highest correlation in terms of target impact. The following
figure presents an overview of all 23 design elements that have been defined and assessed in the course of this
study:

PLM- Strict Empowerment of Modular FAB Technical Data
PLM Design Elements

Governance Stage-Gate Employees Processes Production Management
Change Management
Management System
Manageability of
PLM Process
Value-Adding
Competence
Partners
Figure 11: Overview of 23 Design Elements
In the following sections, a description of each design element will be provided along with empirical findings with
regards to its relevance and current degree of implementation. The empirical findings are represented in a radar
chart which is provided for each design domain in the respective introductory section. Each spoke within the chart
represents a design element that has been validated with a statistic. The data length of a spoke ranges from 0 to
100%. A data point refers to the average degree of implementation in one group for a given design element. The
details about the chosen indicators for each factor and its representation in each complexity group will be available
in a separate publication.
5.1 Design Domain ‘PLM Strategy’

In the context of PLM, an overall strategy is needed that sets the conditions for the operational execution of
PLM processes and for the design of the IT and product architectures. Therefore, a well-defined PLM strategy
is characterized by an optimal alignment of the different design domains without overemphasizing specific
elements. Since the product has to satisfy customer needs, the strategy has to ensure the translation of these needs
into products. Against this background, customer needs management and lifecycle-oriented product portfolio
management are to be considered as essential parts of a PLM strategy. For the purpose of the study, five design
elements were investigated. The aggregated results regarding the degree of implementation for all design elements
within each group are depicted in figure 12 – with one exception: The design element ‘PLM governance’ was
evaluated as a categorical variable, therefore it cannot be represented in the radar chart.

In the next sections, each design element is described in more detail.
5.1.1 Design Element ‘PLM Process Variants’

The importance of well-designed PLM processes was pointed out in the introductory chapter. As indicated there,
the requirements imposed on such a PLM process have changed. Long-lived products with a limited variance in
their product structure along their lifecycle are becoming less and less relevant. These products have been replaced
by a new type of product: a network-based product service system that consists of a bundle of components/
modules, each with a different lifecycle and a high variance in functionality. In order to provide for a unified
customer experience, these lifecycles have to be synchronized and the interdependencies between the components
and different network infrastructures need to be considered. PLM processes have to be designed in such a way that
they reflect the management of innovations on the module level (incremental innovations or modular innovations)
as well as on the architectural level (architectural or radical innovations), meaning that the product service system
is affected as a whole. In order to cope with varying degrees of innovation complexity, the PLM process has to be
adapted accordingly. Based on the typical characteristics of product components, variants of PLM processes have
to be in place.
Through the study it was found that the telecommunications industry strongly relies on PLM process variants.
In general groups with higher complexity have a higher degree of implementation, which makes absolute
sense considering the fact that the limited product portfolio of ‘protected penguins’ typically would not require
a sophisticated setting of process variants. It has to be carefully evaluated how many PLM process variants are
adequate for a given organization in a given market environment. More PLM processes come with more complexity
for coordination, and are only justifiable with an adequate product portfolio.
5.1.2 Design Element ‘Transparency of Product and Portfolio’

Metrics-based management helps project teams to meet commitments, but in order to do so, teams require the
right tools, processes and methods, as well as the capability to uncover and mitigate potential threats. Metrics-
based management uses similar systems, knowledge and rules-based functions, quantitative software management,
integrated software management and core measures to provide predictive capabilities.
Radar Chart für PLM Strategy
PLM Process Variants

1,00%
0,80%
0,60%
0,40%
0,20%
Transparency of
PLM Reporting &
0,00% Product and
Controlling
Portfolio
Customer Needs
Management
Legend: Global Elephants Emerging Zebras Protected Penguins
Figure 12: Implementation Degree of PLM Strategy Design Elements

The transparency of a product and the product portfolio as a whole can be measured by the number of key
performance indicators (KPI) that are used for assessments. KPIs reduce time in the decision-making process and
help to assess products correctly by providing standard criteria for approving or disapproving a product for the
product portfolio. Generally speaking, the more complex a company is, the more products will need to be managed;
therefore, an appropriate number of KPIs will be necessary.
Fact Box
How often do you evaluate your products and your portfolio?
Product 9% 28% 30% 33% 100
Portfolio 63% 20% 15% 2% 100
100%
Monthly Quarterly Twice per year Yearly or less often
Such a KPI set should ideally be based on both quantitative and qualitative parameters. The quantitative dimension
is focused on value contribution in monetary terms, as well as on expected resource requirements, complexity costs
and quantitative implementation risks. The qualitative perspective is based on a product performance assessment
including such aspects as customer benefit, reusability of modules, cross-selling potential, degree of imitation and
strategic relevance. As the empirical findings prove, the application of an extensive set of KPIs for ensuring the
transparency of the product portfolio varies between the complexity groups.
5.1.3 Design Element ‘Customer Needs Management’

In order to succeed in a highly competitive market like the telecommunications industry, it is necessary to identify
customer needs and expectations, and to evaluate the prices customers are willing to pay. To attract new customers
and to prevent turnover, a company must be able to recognize market trends and to that end systematic market
research methods are essential. To develop innovative products, customer expectations should be integrated in
the development process and solutions should be validated and adjusted in close contact with the customers.
Furthermore, to achieve continuous customer satisfaction, a company needs to monitor the lifecycle value of
products. An effective approach to customer needs management ensures that the product specification matches
customer requirements and allows for the delivery of more personalized products by facilitating mass customization.
The instruments for ensuring a well-balanced customer needs management vary with the complexity level.
Nevertheless it was observed that highly complex companies have customer needs management implemented
only at a relatively low level – leaving room for improvement.
5.1.4 Design Element ‘PLM Reporting and Controlling’

In a hyper-competitive environment transparency of current R&D activities affecting the innovation pipeline as
well as the profitability of the current product portfolio is crucial. Using the right management tactics in this highly
dynamic environment requires an all-encompassing reporting and controlling approach. Such an approach can be
characterized in the following four dimensions: (1) report generation (manual or automated), (2) sources (multiple
or single), (3) frequency of analysis and (4) analysis methods.

Based on these four dimensions a maturity model was developed that distinguishes between five levels of PLM
reporting and controlling. For the purpose of the study, every company was evaluated with regards to these levels.
According to the findings of the study, a systematic reporting and controlling approach is generally missing.
Although ‘global elephants’ for instance are characterized by a complex product and service portfolio, an end-to-
end reporting system reflecting the listed dimensions has usually not been implemented.
5.1.5 Design Element ‘PLM Governance’

Creating the organizational structure for PLM is a challenging task for carriers. If a company has a dedicated
organizational unit for PLM, the location within the company hierarchy is significant. The coherent responsibilities
and the level of authority can influence the effectiveness and implementation of PLM methods significantly.
Fact Box
How is the PLM function implemented with the organization?

100%
Global Elephants
Emerging Zebras
80% Protected Penguins
60%
40%
20%
0
Staff division Functional department with No dedicated unit, responsibility
authority to issue directives split between different
PLM Governance along the complexity groups
The responsibility for PLM is in most companies located in a functional department, and it has the authority to issue
directives. Only for a small percentage of companies the PLM unit is defined as a staff division. No carrier within the
‘protected penguins’ group cluster has implemented a dedicated unit for PLM –the relevant responsibilities are split
between different functional departments instead.

5.2 Design Domain ‘PLM Process’

In order to act according to the given PLM strategy, a PLM process has to be defined that leverages the strategic
success potentials on an operational level. Therefore the PLM process organization and – from an organizational
structure perspective – the functional integration of the involved departments internally as well as with external
partners across the lifecycle have to be considered within the functional design domain.
For the purpose of the study, eight different PLM process design elements were defined and evaluated. The aggre-
gated results regarding the implementation degree in each group are depicted in figure 13.
Radar Chart for PLM Process
Strict Stage-Gate
1,00%
Empowerment of 0,80%
Employees Process Standardization
0,60%
0,40%
0,20%
PLM Process Retirement
Competence 0,00%
Management
Manageability of
Value- Adding Partners Functional Integration
of Departments
Integration of Value-Adding
Partners
Figure 13: Implementation Degree of PLM Process Design Elements
In the following sections, each design element is described in more detail.
5.2.1 Design Element ‘Strict Stage Gate’

A PLM process typically consists of several stages (or phases) in which certain activities are to be carried out. At the
end of each process stage a decision panel – typically comprised of high-level management representatives of all
involved departments – assesses whether the previously defined activities have been carried out to a satisfactory
level. If requirements are met, the project passes the gate and proceeds to the next stage. In the context of PLM in
the telecommunications industry, stage-gate structuring includes the design of the gate type, the evaluation criteria
and the decision date for each phase.
In this study the implementation degree of the strict stage gate approach was examined – meaning that there is no
more than one stage-gate concept implemented which applies the same criteria regardless of varying innovation
levels. As can be seen in figure 13, the strict stage gate approach has a rather high implementation degree – with
the exception of the ‘protected penguins’ complexity group.
Besides the strict stage gate approach, we also have to mention the concept of fuzzy stage gates. It was not possible
to confirm its existence; however, the authors believe that fuzzy stage gates will grow in their importance due to
the increased need of flexibility in the PLM process.

5.2.2 Design Element ‘Process Standardization’

The standardization of the PLM process is one of the most critical PLM process design elements as it comes with
a number of potential benefits. In the first place, it greatly reduces process complexity while increasing process
quality. It allows for the mass production of innovations, it leads to better performance with respect to collaborative
efforts and it serves as the basis of performance measurements by creating the opportunity for process monitoring
and for continuous improvements. Taking all of these aspects into consideration, process standardization – if well-
managed and implemented – can greatly increase the overall effectiveness of the PLM process and improve the
probability of product success by decreasing the risk of wrong decision-making.
The degree to which the PLM process is standardized differs between the complexity groups and increases with
the complexity level. As to be expected, the most complex ‘global elephant’ group has the highest degree of
implementation when it comes to process standardization – however, only to a maximum of 73% which is relatively
low considering the importance of this design element.
Fact Box
17% of participants do not have a standardized PLM process implemente d

Level 1:
2% No standardized PLM process is implemented
17%
17%
Level 2:
Collection of best-practices approaches exists for
specific PLM tasks but have not been integrated and harmonized
15% Level 3:
Processes and basis concepts are standardized
and documented
Level 4:
Monitoring and controlling of PLM process is established
49% Level 5:
Process and concepts have been refined to the level
of best-practice based on continuous improvement
5.2.3 Design Element ‘Retirement Management‘

Removing unprofitable products from the portfolio can strengthen the success of a company significantly. A lean
product portfolio lowers product complexity; therefore, it is necessary to take the retirement phase into account
and to make it an integral part of the PLM process model with clearly-defined activities and responsibilities. One
important key activity is that customers must be first migrated to potential substitute products before the production
technology for the “to-be-retired” product can be removed. Therefore customer migration concepts are needed
that identify alternative products and actively encourage the customer to switch.
In general, the implementation level for this is quite low across all complexity groups indicating that retirement
management has not been considered as an important aspect for most carriers so far. It is again the high complex-
ity ‘global elephant’ group which leads the way in terms of implementation degree – which makes sense from the
standpoint that due to their complex portfolio structures, the necessity is much higher than in the other groups.

5.2.4 Design Element ‘Functional Integration of Departments’

PLM-related projects are often accompanied by a conflict of objectives between product marketing and the technical
units within a company. Several case studies have documented that this conflict leads to a higher probability
of product failure within the market. This can have several reasons. Either the product specification is far from
actual market demands and too much technology-driven, or product marketing has specified a theoretical product
without considering the technical feasibility of the idea. A possible approach to solving this dilemma is to take
on a multi-perspective view – meaning that three process perspectives have to be taken into account in order to
ensure efficient coordination and collaboration between the relevant departments or business partners. These three
perspectives are marketing, technological and financial feasibility. The marketing perspective includes all activities
related to product marketing, such as the definition of product specifications and the management of the product
in the marketplace. The technical perspective subsumes all technical or production-oriented activities. Finally, all
financial aspects and implications are categorized in the financial perspective.
Fact Box
80% of participants do not have an active retirement management implemented
20%
Active retirement management is implemented
Active retirement management is not implemented
80%
Our study has shown that functional integration is quite common in the telecommunications industry, but again
the most complex companies have the highest degree of implementation. This clearly indicates that the industry
has addressed the collaborative aspect of the PLM process.
5.2.5 Design Element ‘Integration of Value-Adding Partners’

Due to the fact that value configuration in the communication service industry depends heavily on a value network,
the integration between the value-adding partners is highly critical. For the sake of this study, the integration of the
communication service provider with its hardware/equipment suppliers, as well as with content and application
providers was assessed. Since the existence of an efficient information flow between the partners is essential for a
collaborative development of complex products, it is assumed that a standardized process is also required in the
context of PLM.
The empirical analysis has shown that the integration of value-adding partners is far more advanced with complex
companies than with less complex companies – probably due to the higher interdependency of product com-
ponents in complex companies, leading to a higher integration with value-adding partners.

5.2.6 Design Element ‘Manageability of Value-Adding Partners’

The greater the differences in size and scale between companies in a partnership, the more difficult it becomes to
control the partnership actively. The way the collaboration with value-adding partners is managed varies by carrier
type and by portfolio – with much potential for conflict about aspects such as market success, pricing and customer
satisfaction.
In particular, very large component suppliers (i.e. infrastructure, device, application and content) with unique
features and major international market penetration (e.g. Cisco, Microsoft, Google etc.) are naturally difficult
to control for small businesses. In contrast, very large companies have advantages and often other means for
negotiating product customization or pricing aspects.
As to be expected, the amount of control carriers can exercise over their value-adding partners differs in relation
to the complexity of the company. Companies with higher complexity exercise more control on their components
suppliers, particularly when it comes to indicators such as end-user experience and pricing.
5.2.7 Design Element ‘PLM Process Competence’

Since the collaboration aspect is highly critical for PLM process execution, an adequate competence level has to be
ensured for all participating departments. In order to allow for seamless deputizing in the case of resource deficits,
a competence management for PLM needs to be in place. For the purpose of this study, the existence of PLM
trainings and process documentation was determined as an indicator for this design element.
The findings provide a clear indication that the degree of implementation varies greatly between the different
complexity groups. If complexity is high, companies use PLM trainings and process handbooks and they keep the
quality of process documentation high in order to actively manage the competencies of their employees.
5.2.8 Design Element ‘Empowerment of Employees’

The empowerment of employees describes the aspect of providing the PLM staff with the necessary freedom and
resources needed to carry out their duties and tasks. With respect to this interpretation, there is a close linkage to
the aspect of motivation and the matter of how PLM staff members can get motivated. The overall objective should
be to empower human capabilities in order to boost innovativeness. In general, motivation can be subdivided
into intrinsic and extrinsic motivation. Intrinsic motivation can be fostered through the transfer of responsibility,
e.g. by giving employees the opportunity to self-organize their work, to design product specifications for certain
components or to allocate project budgets within their own authority. Extrinsic motivation can be managed by
incentives that are offered for creating new product ideas. Additionally, senior management has to make sure that
individual goals of employees are linked to the PLM goals of the company.
Based on the empirical analysis, the motivation is independent from the complexity level and all complexity group
clusters have implemented this design element to a similar degree. According to the results of the study, the
management instruments and methods have not been fully implemented to ensure an intrinsic motivation.

5.3 Design Domain ‘Product Architecture’

Five distinct design elements for the design domain of product architecture were identified and evaluated in the
course of the study. Three of them address different perspectives of a telco product: the market, the technical
and the operations perspective – the latter mainly in terms of fulfillment, assurance and billing. In order to be in a
position to adequately manage the product lifecycle, all three perspectives have to be aligned across all phases. In
addition to these three perspectives, engineering change management and product data aspects present relevant
design elements as well.
Radar Chart Product Architecture
Modular Market
Perspective
1,00%
0,80%
0,60%
Alignment of
0,40% Modular FAB
Product Model with
Processes
Product Data 0,20%
0,00%
Engineering Change Modular Technical

Management Perspective
Figure 14: Implementation Degree of Product Architecture Design Elements
5.3.1 Design Element ‘Modular Market Perspective’

The modular market perspective encompasses several highly critical aspects for a carrier to achieve PLM excellence.
In the market perspective design element, all activities related to product marketing are considered, including the
definition of product specifications and after-launch management. Seen from a modularized market perspective
market segment differentiation can be taken into account, as well as the differentiation between a market-focussed
and a production-focussed point of view. A higher implementation degree of the modular market perspective
enhances the time-to-market ratio and allows for better price discrimination (rule-based pricing for defined
customer groups). Furthermore it addresses the issue of customer needs management.
Through a well-implemented approach to product modularization there is a chance to offer cross-bundles and to
combine product modules for the customer in a flexible manner. Additionally, the computerization of the product
model gives the opportunity to automatically generate sales catalogues based on the product model.
Based on our empirical analysis, it can be concluded that the complex ‘global elephants’ have implemented the
modular market perspective to 70% on average, which seems not very high considering the great benefits of this
design element. We found that the degree of implementation declines with the degree of complexity.

Fact Box
40% of participants do not have a modular product concept implemented ─

neither on market nor on production side
No modular product concept implemented

40%
Modular product concept implemented to some degree
60%
5.3.2 Design Element ‘Modular FAB Processes’

The modularization of FAB processes – dealing with fulfillment (provisioning), assurance and billing – is another
important element of product architecture. For the purpose of this study, a categorization model for the modularity
of FAB-processes has been developed and applied:
Fact Box
Degree of Modularization
No modularity Product individual processes
Limited modularity Product type dependent processes
Rudimental modularity Defined process modules on a high level
Modularity Re-usability of all process modules per product type
Managed modularity Re-usability of all process modules independent of product type
Inter process modularity Process modules are used throughout the whole value chain
The empirical analysis provides a similar picture here as that of the modular market perspective. The degree of
implementation increases with complexity, but it remains rather low despite its importance for improving efficiency
in process execution.
5.3.3 Design Element ‘Modular Technical Production Perspective’

The modular technical production perspective is the logical counterpart to the modular market perspective. This
design element focuses on the production view – especially on the similarity of production modules in terms of
product design. If modular technical production is in place, it is considerably easier to develop new products or to
adapt existing ones.

The focus lies on a reduction of production costs and on an increase of flexibility with regards to production
elements – thus potentially improving time-to-market. The implementation degree of the modular technical
production perspective is determined by the existence of a production view as well as by the conformity of physical
products with their design and specifications.
A modular technical perspective on the product requires the implementation of specific engineering methods
dealing with the modularization of tangible components (such as the network or end devices) and intangible
components (such as software or content). Because these kinds of engineering methods, and especially their
interrelation, are not so widely explored and used, a modular technical perspective has not been implemented on
a high level.
5.3.4 Design Element ‘Engineering Change Management’

Engineering change management refers to the process of managing and implementing changes to existing pro-
ducts. It describes functions and processes that are implemented in an organization to control and document
product changes – including all activities dealing with the collection, evaluation, decision-making, planning and
consolidation of product changes. Based on new requirements resulting from errors found or on newly acquired
knowledge, it might be necessary to undertake adjustments accordingly.
In order to allow for a classification of the surveyed companies, a maturity model for engineering change
management was developed. Within this maturity model, a distinction is made between five different levels of
maturity in engineering change management – ranging from ad-hoc-based and informal change management
at the low end, via a company-wide standardized approach and automation in the middle, all the way to a cross-
company (inter-partner) implementation of engineering change management at the top end.
According to our study, the business function of engineering change management is not implemented on a
broad scale – even within the highly complex ‘global elephant’ group. Nevertheless, based on experience from
manufacturing, it is hypothesized that the more product complexity a telco carrier faces, the more stimuli there
are to standardize engineering change management in order to achieve better stability and information exchange
within the company and along the product development process.
5.3.5 Design Element ‘Alignment of Product Model with Product Data’

For the alignment of the product model with product data, a structured approach based on the usage of an
information framework – such as the Shared Information & Data Model (SID) – plays an important role since it
provides the reference data model that can be used across the entire enterprise for all application and process
integration endeavors. Different dimensions of the product model concept have to be considered in order to
achieve seamless enterprise data integration. A product data framework is indispensable for a flawless integration
of the product model into an existing IT architecture.
For the purpose of this study, three aspects were identified that are important for a successful alignment of the
product model with product data. First, product channel management (PCM) that the carrier incorporates the full
supplier/consumer ecosystem into its product development and management process – such as by exposing the
relevant product catalogue to the various ecosystem channels, customers, resellers and partner providers. Also, the
alignment of the BSS and OSS data model with the product model gives the unique opportunity to automatically
transmit all changes applied to the product model to the partly disintegrated BSS and OSS systems. Last but
not least, implementing this design element enables the provision of one invoice to the customer, containing all
services this customer has bought.
There is statistical evidence that the implementation degree of product and data model alignment does differ
between the complexity groups. In general, we found that again the ‘global elephants’ are the most advanced
compared to the other groups. But their average degree of implementation still remains below 60%.

5.4 Design Domain ‘PLM IT Architecture’

A product can only evolve through its complete lifecycle if a solid PLM IT architecture is in place that is customized
for the company-specific PLM requirements. Systems and applications primarily serve the purpose to support the
business and operational processes, therefore it is highly critical to assess process requirements first – and then to
derive IT system requirements in order to guarantee a ‘system follows process’ approach.
Fact Box
Only 7% totally agree with the statement: Our IT provides a significant contribution
to achieve operational excellence in PLM.
7%
Total agreement
Less than total agreement
93%
The potential benefits of a sound IT architecture are tremendous – enabling the other PLM design areas of strategy,
processes and product structuring. A complete PLM IT consists of a decision support system (i.e. portfolio analytics
or product configurator), process support system (i.e. workflow management system, product data management
system and project management software), as well as the integration infrastructure. The latter is of special im-
portance as – contrary to the manufacturing industry – in telco a PLM solution is typically a best-of-breed archi-
tecture in which different existing IT systems are integrated. Five design elements were examined for the design
domain of PLM IT architecture within the study. The aggregated results regarding the degree of implementation in
each group are depicted in figure 15.
Radar Chart for PLM IT Architecture
Product Portfolio
Analysis Tools
1,00%
0,80%
0,60%
Data 0,40% Application

Management Integration
0,20%
0,00%
Extended Collaboration Workflow- Management

Tools System
Figure 15: Implementation Degree of PLM IT Architecture Design Elements

5.4.1 Design Element ‘Product Portfolio Analysis Tools’

A systematic approach to portfolio management in general and the IT domain of decision support in particular is
one of the most critical activities within the scope of PLM. As outlined in the previous chapter on PLM strategy,
reporting and controlling serves the purpose to ensure availability of information – and product portfolio analysis
tools provide the necessary tool and system support to analyze the portfolio. Because of the strategic, long-term
relevance of all portfolio considerations, it is important to use IT systems that can facilitate the decision-making pro-
cess. For the purpose of this study, three separate functional aspects were defined for the design element ‘product
portfolio analysis tools’.
The IT support for customer needs management enables a strict orientation towards actual market demands –
ensuring that the current and future portfolio are mirrored continuously against market requirements. Analytic
tools for portfolio management are ideally integrated with a data warehouse in order to allow for multiple means
of quantitative and qualitative analysis and thus to achieve a higher degree of maturity in PLM reporting and con-
trolling. Finally, strategic resource planning ensures a demand and need-driven budget allocation, and it serves as
a means to manage any future portfolio development endeavors.
In terms of controlling and reporting support, there are considerable differences between the complexity groups.
Whereas the average degree of implementation in group 1, ‘global elephants’, is approximately 60%, there is
almost no IT support for PLM in place in group 3 (approximately only 16%).
5.4.2 Design Element ‘Extended Collaboration Tools’

The support of PLM-related operations by a consistent and stringently-managed use of IT systems is critical for the
overall efficiency and effectiveness of PLM. The design element ‘extended collaboration tools’ is focused on the
use of extended tools that enable and facilitate cross-departmental collaboration within the organization, as well as
outside within the partner network. This includes PLM process support systems which are important for managing
collaboration aspects such as project management software or document management systems (DMS).
Our study has shown that the degree of implementation for this design element is relatively high with regards to
project management software and lower in the area of DMS – across all three complexity groups. However, the
‘global elephants’ group again has the highest degree of implementation, and it decreases in accordance with
complexity levels, i.e. the degree of implementation for DMS is especially low with ‘protected penguins’ where it is
only implemented to a degree of approximately 35%.

5.4.3 Design Element ‘Workflow Management System’

In order to allow for an IT-based support of processes, it is highly critical to implement solutions that can be
configured and adapted to resemble the carrier-specific processes. Workflow management systems (WFMS) guide
users through the process in accordance to their role and function, and they ensure that formal procedures and
processes are strictly followed by the PLM staff. This means that a WFMS serves as the basis for increased process
automation as it ideally provides some intelligence through functions such as automated triggers and reminders
when actions are to be carried out. Due to the cross-departmental and inter-company nature of telco industry-
specific product development endeavors, it is highly important that a WFMS contains a capability to integrate and
manage the collaborative efforts of PLM professionals from different departments and even companies.
‘Global elephants’ have typically implemented a WFMS to a degree of 80%, while the ‘protected penguins’ have an
implementation degree of only 10% within their PLM organization. The very low implementation degree of WFMS
in group 3 might be due to the fact that for low-complexity carriers, a WFMS might be counterproductive and not
necessarily beneficial for business. For large carriers on the other hand, such as the participants in group 1, WFMS
is highly critical in order to achieve process transparency and to facilitate collaboration.
5.4.4 Design Element ‘Application Integration’

In order to achieve synergies on a system level, it is important not only to implement a PLM IT architecture in an
isolated silo-like fashion, but to ideally integrate it fully with finance, CRM, OSS and BSS systems.
The coupling with finance systems allows for the immediate analysis of product performance with respect to key
financials throughout the entire lifecycle. Integration with the CRM system is necessary in order to allow for a com-
bined perspective on product and customer-related data, as well as their existing interrelation and interdependen-
cies. In addition, this type of integration also serves the purpose of enabling customer needs management – by
channelling customer feedback back into the innovation pipeline. Finally, integration with OSS and BSS systems
seems critical as it allows a smoother transition from the product development phases to market launch and to
actual operations.
According to the findings of our study, the implementation degree of this design element is only low or moderate
across all complexity groups – but then again, it is the ‘elephants’ group which is most advanced in this matter. It
is interesting that the integration with OSS and BSS systems is by far higher than the integration with functional
systems such as finance or CRM systems. This holds true for all complexity groups, and one reason might be the
fact that OSS/BSS integration has been heavily marketed and pushed by the TeleManagement Forum.

5.4.5 Design Element ‘Data Management’

As pointed out before, the impact of data management on the complexity of a carrier is immense. Data can only
increase transparency and serve the purpose of creating business intelligence for proper decision-making if they are
managed properly.
The design element ‘data management’ is comprised of three different aspects: Data visibility and roles-based
access to information, harmonized data sources and data consistency, as well as versioning of product-related data.
The underlying main objective of all these aspects is to achieve transparency by ensuring the availability, accuracy,
timeliness and completeness of information for assessing and monitoring all relevant key metrics. The unambiguous
correlation of basic data to business management indicators along the lines of a standard product structure provi-
des staff and management with precise and timely information about all the critical success factors that help staff
and management to make the right decisions at the right time.
The study has shown that data management is not widely implemented, and that there is much implementation
potential in all complexity groups: The overall degree of implementation is only around 40% across all complexity
groups.

6. PLM Impact on Complexity Management Targets

In order to be in a position to analyze and understand the impact of PLM design elements, we developed a model
for the purpose of this study. This model contains 16 specific PLM target elements for complexity management that
are clustered into four different target domains – namely 1) time, 2) costs, 3) process quality and 4) product quality.
Structured along these four target domains, the specific target elements are introduced and described in the
following sections. However, as it is mostly interesting from a management perspective to understand what PLM
design elements have an impact on what complexity management targets, the top design elements in terms of
their measured correlation are listed for three groups respectively – 1) generally applicable to all complexity groups
2) ‘global elephants’ with high complexity, as well as 3) ‘emerging zebras’ with medium complexity. The presen-
ted correlations have been pre-selected by the authors on the basis of high correlation values and plausibility. For
the lowcomplexity ‘protected penguins’ group, the correlation was not further examined as it is mostly the other
groups which struggle with increasing complexity. ‘Penguins’ are less affected by this due to their relatively focused
and concise product portfolios. The following figure presents an overview of the 23 design elements listed above,
as well as the 16 target elements that exist within each of the four target domains:

PLM Targets
Process & System Provisioning

Time-to- Flexibility of Efficiency in Product Market
Waiting Time Implementation Churn Rate Performance in
Market PLM-Process CNM Launch Quality
Costs the Value Net
Human Effectiveness Reduction of
Delay in Value Net
Delivery
Resource of PLM Performance Technical FAB Quality
Performance Processes Deficits
Reliability of
Information
Availability PLM
Processes
Support

PLM- Strict Empowerment Modular FAB Technical Data
PLM Design Elements

Governance Stage-Gate of Employees Processes Production Management
Change Management
Management System
Manageability of
PLM Process
Value-Adding
Competence
Partners
Figure 16: Overview of 23 PLM Design Elements and 16 Target Elements
The study suggests that from an integrated perspective, best-practice based execution and handling of the design
elements as described in chapter 5 will lead to a greater achievement level with regards to the correlating target
elements. Using these levers will empower telco executives and managers to identify the most urgent actions to be
taken in order to cope with the complexity dilemma.

6.1 Target Domain ‘Time’

The PLM target domain ’time’ tackles the issue of time management and rapidness of execution regarding all pro-
cesses that are related to product development and other PLM activities. Namely 1) waiting time occurrence, 2)
delivery delay and 3) time-to-market are contained as elements within this target domain – with all of these time
elements to be kept at a minimum for PLM excellence. Since the matter of product success or failure can heavily
depend on time and timing, these target elements should always be monitored and assessed for the sake of setting
the base for continuous improvement endeavors.
6.1.1 Target Element ‘Waiting Time’

The target element ‘waiting time’ contains three different factors: waiting time along the value and supply chain,
technical development waiting time, and waiting time caused by a poor process structure. As the two most frequent
sources for waiting time, coordination efforts with components suppliers, as well as technical issues were stated by
participants of all three complexity groups – especially in terms of technical product development.
The following top correlations were determined for all complexity groups in conjunction, as well as specifically for
the high-complexity ‘global elephants’ and the medium-complexity ‘emerging zebras’.
General Impact of PLM Design Elements across all Groups
Element Domain Correlation
Workflow Management System PLM IT Architecture 0.315 **
Functional Integration of Departments PLM Process 0.294 **
Time Special Impact for Global Elephants
Waiting Time Element Domain Correlation
Application Integration PLM IT Architecture 0.611**
Special Impact for Emerging Zebras
Customer Needs Management PLM Strategy 0.499 **
Legend for P-Value: *** p < 0.01 ** p < 0.05 * p < 0.1

6.1.2 Target Element ‘Delay in Delivery’

The target element ‘delay in delivery’ is based on two factors: The first factor describes the matter of exceeding
deadlines during the product development phases – particularly within the ideation, evaluation and planning
phases. The second factor is focused on delays that occur after product development, including indicators of
exceeding deadlines during implementation and launch, and later when the product is managed in the market. In
general, it was found that PLM is a discipline in which deadlines are exceeded quite often – especially during the
implementation and launch phases. Complexity levels did not make a difference here.
the high complexity ‘global elephants’ and the medium complexity ‘emerging zebras’.
Integration of Value-Adding Partners PLM Process 0.517 **
Modular FAB Processes Product Architecture 0.439 ***
Product Portfolio Analysis Tools PLM IT Architecture 0.406 ***

Time
Delay in Special Impact for Global Elephants

Delivery
Extended Collaboration Tools PLM IT Architecture 0.561**
Modular Technical Production

Product Architecture 0.461***
Perspective

6.1.3 Target Element ‘Time-to-Market’

The target element ‘time-to-market’ describes the time it takes to develop and launch a product – starting with the
very first initial product idea all the way to the actual market launch of a product. Two factors were used in order
to assess target achievement levels: the development of the duration of an average product development over the
past three years, as well as the development of this average development duration in comparison to the closest
competitors.
the high-complexity ‘global elephants’ and the medium-complexity ‘emerging zebras’.
PLM Process Competence PLM Process 0.396 ***
Data Management PLM IT Architecture 0.249 *

Product Architecture 0.230 *
Perspective
Time
Time-to-Market Special Impact for Global Elephants
Product Portfolio Analysis Tools PLM IT Architecture 0.621 **
Application Integration PLM IT Architecture 0.466 **

6.2 Target Domain ‘Costs’

The development, launch, management, relaunch and retirement of products and portfolios can be very cost-
intensive and carriers that are able to be more efficient in terms of cost will always be in a position to generate
and achieve greater margins. The target elements included within this target domain are 1) process and system
implementation costs, 2) churn rate and 3) human resources performance. Out of these three aspects, only the first
one has a true cost character – the latter two have been factored in based on the reasoning that high churn rates
and ineffective human resources performance lead to an undesirable cost position.
6.2.1 Target Element ‘Process and System Implementation Costs’

The target element ‘process and system implementation costs’ includes a view on implementation costs for essential
processes and systems when launching basic and value-added services in relation to the overall launch budget. An
effective and efficient PLM implementation can help to minimize these implementation costs. Interestingly, it was
found that high-complexity ‘global elephants’ are typically more efficient with regards to this target element. The
following top correlations were determined for all complexity groups in conjunction, as well as specifically for the
high-complexity ‘global elephants’ and for the medium-complexity ‘emerging zebras’:
Extended Collaboration Tools PLM IT Architecture 0.378 ***
PLM Governance PLM Strategy 0.251 *
Costs
Special Impact for Global Elephants
Process
and System
Implementation Transparency of Product and Portfolio PLM Strategy 0.513 **
Costs
Retirement Management PLM Process 0.456 **
6.2.2 Target Element ‘Churn Rate’

The churn rate is considered a target element within the target domain ‘costs’ based on the following reasoning: A
telco product typically has a high portion of fixed costs. If the churn rate is high, carriers are still left with the same
operational costs – such as for running their networks, systems and organization – therefore, the average cost per
user increases, and PLM can help to reduce churn and minimize costs. For the purpose of this study, the target
achievement degree was based on two factors: the churn rate development over the past three years, as well as the
same metric in comparison to the closest competition. The following top correlations were determined for all com-
plexity groups in conjunction and specifically for the medium complexity ‘emerging zebras’ (note: no correlations
between design elements and this target element were identified for the ‘global elephants’ complexity group):

PLM Process Competence PLM Process 0.454 ***
Modular Market Perspective Product Architecture 0.446 ***

Costs
Customer Needs Management PLM Strategy 0.431 **
Churn Rate
Process Standardization PLM Process 0.460 ***
6.2.3 Target Element ‘Human Resources Performance’

An optimized utilization of resources presents another critical target element within the target domain ‘costs’.
Human resources performance was selected and validated as a cost aspect because it is directly related to costs. If
PLM staff performs effectively, personnel overhead costs will go down. Therefore it should always be a PLM cost
target to optimize human resources performance. For the sake of the study, the measurement of resource perfor-
mance was conducted on the basis of two factors: average revenue per employee and the same metric in compa-
rison to the closest competition of the carrier. The following top correlations were determined for all complexity
groups in conjunction and specifically for the high complexity ‘global elephants’ (note: no correlations between
design elements and this target element were identified for the ‘emerging zebras’ complexity group):

Product Architecture 0.426 **
Perspective
Costs
Engineering Change Management Product Architecture 0.329 *
Human
Application Integration PLM Strategy 0.410 **
Resources
Performance
PLM Reporting & Controlling Product Architecture 0.735 **

6.3 Target Domain ‘Process Quality’

A high achievement level with regards to the elements contained in this target domain indicates a high level of
process quality. The PLM process spans the entire lifecycle of products and portfolios and so determines the long-
term sustainability of business success – hence, achieving operational excellence in terms of PLM processes is highly
critical. High process quality leads not only to increased effectiveness and efficiency, but also to more flexibility,
which is important when it is necessary to quickly adapt to changing market conditions. The target domain con-
tains six elements: 1) flexibility of PLM processes, 2) efficiency of customer needs management, 3) effectiveness of
PLM processes, 4) value net performance in terms of cost, time and quality, as well as 5) information availability
and 6) reliability of PLM.
6.3.1 Target Element ‘Flexibility of PLM Processes’
The target element ‘flexibility of PLM processes’ is composed of two factors: First, a high level of process flexibility
enables a carrier to quickly adapt to changing market requirements. A flexible PLM process is determined by the
ability to react to market dynamics and to launch corresponding initiatives to follow-up on these opportunities.
Second, high process flexibility also describes the ability to re-allocate resources if required due to shortages. Both
these factors are relatively well-implemented across all complexity groups.
the high-complexity ‘global elephants’ and for the medium-complexity ‘emerging zebras’:
Application Integration PLM IT Architecture 0.504 ***
Modular Market Perspective Product Architecture 0.489 ***
Alignment of Product Model

Product Architecture 0.441 ***
with Product Data
Process
Quality
Flexibility of Element Domain Correlation
PLM Processes
Retirement Management PLM Process 0.642 ***

6.3.2 Target Element ‘Efficiency of Customer Needs Management’

Customer needs management describes a company’s ability to systematically assess present and future customer
needs, and to have these reflected in the portfolio, or at least outlined in the development roadmap. Therefore, a
high efficiency of customer needs management is characterized by better and more efficient monitoring of custo-
mer lifecycles, as well as by the ability to maintain a consistent product portfolio through better synchronization of
product portfolio and product changes. It was found in the study that it is mostly the low-complexity companies
who have problems with executing customer needs management, but the problem was also observed in the high-
er-complexity groups of ‘elephants’ and ‘zebras’, so the achievement level leaves a lot of room for improvement
on all levels of complexity.
Customer Needs Management PLM Strategy 0.718 ***

Perspective

Process
Quality
Efficiency of Element Domain Correlation
Customer Needs
Management Functional Integration of Departments PLM Process 0.603 **

6.3.3 Target Element ‘Effectiveness of PLM Processes’

The third target element contained in the target domain of process quality is the overall effectiveness of the PLM
processes. It encompasses perspectives on three important phases within the PLM lifecycle process – namely the
phases of R&D, launch and retirement. These three phases are represented by three factors that were used to
measure the achievement degree of PLM process effectiveness. Out of the three factors, the achievement level with
regards to the effectiveness of retirement management lags behind significantly – particularly in the ‘penguins’ and
‘zebras’ groups there is a lot of room for improvement in this regard.

Perspective
Process
Quality
Effectiveness of Element Domain Correlation
PLM Processes
Workflow Management System PLM IT Architecture 0.705 ***

6.3.4 Target Element ‘Value Net Performance’

Value creation in the telecommunications industry is based on a complex cooperation structure between telco
carriers with suppliers of infrastructure and wholesale products, software and hardware, as well as content and
process partners. This means that the performance of all parties within the value net is highly critical to the PLM
process quality and to a company’s success in general. In order to assess value net performance, three factors were
used which focus on the aspects of time, quality and costs. It was found that there are some significant differences
between the complexity groups. Whereas for the ‘elephants’ value net performance seems to be satisfactory with
regards to all three aspects, the lower-complexity ‘zebras’ and ‘penguins’ have the biggest issue when it comes to
managing time.
Process Standardization PLM Process 0.632 ***
Strict Stage-Gate PLM Process 0.593 ***

Perspective
Process
Quality
Value Net Element Domain Correlation
Performance
Transparency of Product and Portfolio PLM Strategy 0.786 ***
Functional Integration of Departments PLM Process 0.545 ***

6.3.5 Target Element ‘Information Availability’

Access to accurate, relevant information in a timely fashion facilitates the decision-making process and carries an
enormous impact on process quality in general. In order to measure information availability as one target element
within this domain, the availability of six different key data sets was assessed: billing, activation, usage, material
flow, inventory and customer feedback data. One finding that applies to all complexity groups is that the availability
of material flow data has the lowest achievement level – probably due to the fact that this information did not used
to be as business-critical as the other aspects in the past. The data set with the highest degree of availability across
all compexity levels is billing-related information.

Process
Quality Special Impact for Global Elephants
Information Element Domain Correlation

Availability
PLM Process Variants PLM Strategy 0.594 **
Empowerment of Employees PLM Process 0.573 ***

6.3.6 Target Element ‘Reliability of PLM Processes’

One important aspect of assessing overall process quality is the reliability of the PLM processes. For the purpose
of this study, process reliability has been defined as a composition of three distinct factors – deadlines met or
exceeded, budget met or exceeded, and technical modifications to products that already have been approved. It
was found that the degree of achievement is generally low for all three complexity groups with not much variance.
For instance, approximately 50% of the companies change a product design after it has been approved once,
consequently leading to a situation where deadlines or pre-defined budgets are often exceeded.
Integration of Value-Adding Partners PLM Process 0.412 ***
Alignment of Product Model with

Product Data
Process
Quality
Reliability of Element Domain Correlation
PLM Processes
Functional Integration of Departments PLM Process 0.468 *
Extended Collaboration Tools PLM IT Architecture 0.415 **

6.4 Target Domain ‘Product Quality’

In times of increasing customer expectations and of the inevitable trend towards commoditization, it becomes
increasingly important for telco carriers to develop products and services with superior quality in order to create
room for differentiation against competitors. An effective PLM with coherent metrics to increase product quality
can help carriers to leverage products and components to address customer needs more effectively. In the target
area of product quality, the following four aspects have been considered as target elements: 1) product market
launch quality, 2) provisioning performance in the value network, 3) reduction of technical product deficits, and 4)
quality assurance during the initial market launch in terms of fulfillment, assurance and billing.
6.4.1 Target Element ‘Product Market Launch Quality’

The differerent factors making up the target element ‘product market launch quality’ actually represent problems
that are to be avoided. For the purpose of the study, four such factors were selected –service quality, end-user de-
vice functionality, end-user device design and application functionality. It is important to have an understanding of
these problems as their resolution can lead to high costs – in maintenance or in after-sales support – ultimately also
increasing total cost of ownership. The study has found that all carriers have issues with these aspects, regardless
of their complexity level. Remarkably, only the low-complexity ‘penguins’ have stated that product market launch
quality in terms of end user devices is high.
The following top correlations were determined specifically for the high-complexity ‘global elephants’ and for the
medium-complexity ‘emerging zebras’ (note: no correlations between design elements and this target element
were identified for all complexity groups in conjunction):

Product
Quality Integration of Value Adding Partners PLM Process 0.525 **
Product Market Special Impact for Emerging Zebras

Launch Quality
Strict Stage-Gate PLM Process 0.522 ***

6.4.2 Target Element ‘Provisioning Performance in the Value Net’

The target element ‘provisioning performance in the value net’ is based on typical quality perspectives of a telco
product – including the product quality in its entirety, the quality of the network infrastructure, the end-user
devices, misc. hardware, SIM cards, content, as well as the quality of service and fulfillment. In combination, these
seven aspects determine the overall quality and performance in the value net – which is also directly perceivable at
the customer front, and is thus to be critically assessed at all times. In general, the ‚elephants’ have the best perfor-
mance in their value net, followed by group 2, the ‘zebras’, and lastly the ‘penguins’ of group 3 were found to have
the lowest degree of provisioning performance.
PLM Process Variants PLM Strategy 0.302 **

Product
Provisioning Element Domain Correlation

Performance in
Modular Market Perspective Product Architecture 0.494 *
the Value Net
Modular Market Perspective Product Architecture 0.462 **

6.4.3 Target Element ‘Reduction of Technical Deficits’

The later in the process technical design errors are discovered, the greater is the adverse impact in terms of time,
money, disruption, reputation, and perhaps even safety. Therfore the reduction of technical product deficits should
always be an important target for carriers. For the sake of the study, different aspects such as technical solution
design, specification, and insufficient testing and preparation time – among others – were included for measuring
the achievement degree of this target element. It was found that technical solution design and specification aspects
are less of an issue for all complexity groups, while problems do exist with insufficient collaboration during the
design phases, as well as with project management in general.
Functional Integration of Departments PLM Process 0.425 ***

Product
Reduction of Element Domain Correlation

Technical
PLM Reporting and Controlling PLM Strategy 0.639 ***
Deficits
Data Management PLM IT Architecture 0.415 ***

6.4.4 Target Element ‘FAB Quality’

Ironically one of the most important aspects of quality in telco products is a process issue. If the performance of
the FAB processes is not satisfactory, it will lead to a bad product experience; therefore this perspective also has to
be considered in the target area of product quality. The target element of ‘FAB quality’ is comprised of three factors
referring to billing quality, service quality and provisioning quality. It was found that there is not much variance and
that carriers of all three complexity groups generally find FAB quality to be low or moderate.
the high-complexity ‘global elephants’ (note: no correlations between design elements and this target element
were identified for the ‘emerging zebras’ complexity group):
This section closes the chapter on the correlative impact of PLM design elements on the given complexity manage-
ment targets. In the following chapter, we will highlight the most interesting findings as identified for the different
complexity groups, and we will give recommendations based on their brief interpretation.
Product Alignment of Product Model with

Product Data
Quality
Product Portfolio Analysis Tools PLM IT Architecture 0.324 **
FAB Quality
PLM Reporting and Controlling PLM Process 0.651 ***
Legend for P-Value
*** p < 0.01 ** p < 0.05 * p < 0.1

7. Key Recommendations
Throughout the study it could be validated that there is indeed an impact of PLM design elements on the target
domains. PLM should no longer be understood solely as a matter of IT or product development, but recognized as a
comprehensive and highly critical function with potential gains across an entire enterprise. PLM therefore has to be
addressed in an integrated and holistic fashion in order to achieve sustainable competitiveness and market success
in a highly dynamic industry such as telecommunications. In addition, it was found that the impact of design ele-
ments does vary according to the specific complexity level of a carrier.
The success or failure of PLM implementation can be determined by evaluating the achievement of PLM targets in
the domains time, cost, and product and process quality – ultimately reflecting the ability of a company to handle
complexity. Figure 17 depicts the effects that the given PLM targets can have on the lifecycle of a product.
Leveling the PLM Curve by Meeting Complexity Targets
Product Quality
Effects
Time Effects
Revenue/Profit
Benefit of product
+ Process Quality
0 Effects
-
Increase of re-usability
Cost Effects
Innovation
Realization Launch Growth Maturity Saturation Exit
Planning
Chronological Sequence
Legend: Cash-Flow Performance without PLM Cash-Flow Performance with PLM

Revenue Performance without PLM Revenue Performance with PLM
Figure 17: Impact of Target Domains on PLM Curve
Based on the findings as presented in the previous sections, recommendations were derived that apply either to all
complexity groups in conjunction, or specifically to the ‘global elephants’ or to the ‘emerging zebras’ complexity
groups. The following subsections are structured in accordance to the four target domains. Please note that the
provided interpretations are only focused on correlations with the highest correlative values or on what was found
to be particularly interesting.

7.1 Key Recommendations Applicable to All Groups

With regards to all complexity groups in conjunction it was found that all design domains are important and have
to be implemented in accordance to the level of complexity. The key to success lies in the systematic implemen-
tation of PLM and in understanding the interdependencies between design elements and potential time, costs,
process and product quality improvement. In the following, the most relevant and interesting correlations are
presented and interpreted:
Time Improvement Action Points

Implement WFMS to reduce waiting time between different departments:
It has been validated that there is a positive correlation between the implementation of a workflow management
system and waiting time. This makes absolute sense since a well-implemented WFMS supports all involved
parties in carrying out their functions and responsibilities by mirroring steps and activities in sequence –
typically in an automated fashion by providing reminders and triggers. Therefore waiting time can be reduced
considerably throughout the process and along the value and supply chains.
––––––– Design Perspective ––––––– ––––––– Target Perspective –––––––

Correlation:
PLM IT Architecture Time
0.315
Workflow
Waiting Time
Management System
Increase your PLM process competence to reduce time-to-market:

By providing well-planned trainings and comprehensive process documentation, the staff competence level
can be increased with regards to the PLM processes in place. According to the findings of the study, this proves
to have a positive correlation on time-to-market. The reason for this is most probably the fact that PLM in
particular is a management discipline in which the human factor plays a critical role. It has a lesser automation
degree than other telco prime processes and the work imposes greater demands on creativity, knowledge and
communication – therefore the better the competence level, the greater the potential reduction in time-to-
market.

Correlation:
PLM Process Time
0.396
PLM Process Competence Time-to-Market

Costs Improvement Action Points

Implement a modular market perspective for product structuring to reduce churn:
The concept of modular market perspective addresses the trend of increasing personalization. As it allows for a
better alignment with actual market and customer needs, it can greatly reduce the churn rate, and so improve
the average cost per user. In addition, it creates opportunities for a carrier to better adapt to changing market
dynamics since market-defined modules can be rearranged quickly to accommodate any changes, rather than
having to be newly-designed from scratch.

Correlation:
Product Architecture Costs
0.446
Modular Market
Churn Rate
Perspective
Implement engineering change management to increase staff performance:

There are two reasons why carriers currently modularize their products. First, in order to cope with the
increasing demand for the configurability of their products, and second, to improve the efficiency in product
development and management. To control the growing number of modules, a systematic engineering change
management needs to be in place that tracks changes on product module level and ensures transparency. With
this transparency, the efficiency of the product development and management staff can be improved since the
reusability of modules can be matched to requirements faster.

Correlation:
PLM Process Costs

0.329
Engineering Change Human Resource
Management Performance
Process Quality Improvement Action Points

Utilize product portfolio analysis tools to increase PLM process effectiveness:
Product portfolio analysis tools are highly critical since they allow for fact-based decision making. When all necessary
information is accessible at decision-making points, there is a greater chance that activities are steered into the right
direction – thus, positively impacting the effectives of PLM processes.

Correlation:
PLM IT Architecture Process Quality
0.665
Product Portfolio Effectiveness of
Analysis Tools PLM Processes

Integrate your value-adding partners to increase reliability of your PLM processes:

PLM process reliability is highly-critical because any objective which is not met during process execution
can have severe consequences. The more partner relations a carrier has, the more dependencies exist that
can impact process reliability. By integrating value-adding partners, the risk of missing product changes,
or of missing deadlines or budget is greatly reduced, thus, positively affecting the overall reliability of
PLM processes.

Correlation:
PLM Process Process Quality
0.412
Integration of Reliabilty of
Value-Adding Partners PLM Processes
Product Quality Improvement Action Points
Reduce product deficits by optimizing integration of functional departments:

The reason for technical product deficits is often a misunderstanding or even conflicts between different
functional departments that are involved in PLM. By implementing the concept of multi-perspectiveness and
functional integration, communication and transparency can be greatly improved – minimizing the risk of
technical product portfolio and product failure in general.

Correlation:
PLM Process Product Quality

0.425
Functional Integration Reduction of
of Departments Technical Benefits
Modular FAB processes improve the provisioning performance in the value net:
The provisioning performance encompasses a variety of different quality aspects such as network aspects, end-
user devices or service quality. The latter aspect in particular requires special attention because of the service
character of telco products. Much of the quality perception at the customer front is service-focused. With a
modular FAB process landscape, process modules can be rearranged flexibly in order to better accommodate
different products and different customer needs.

Correlation:
Product Architecture Product Quality
0.610
Provisioning Performance
Modular FAB Processes
in the Value Net

7.2 Key Recommendations Applicable to ‘Global Elephants’

For the complexity group of ‘global elephants’ the overarching principle is to “harmonize, enable diversity and
conquer”. Since complexity is steadily rising due to increasing product diversity accompanied by complicated
IT and process structures, it should be considered a mission-critical aspect to implement means that demystify
complexity and drive harmonization in the first place. With increased transparency, ‘global elephants’ should then
focus on creating diversity in order to be prepared for the threat of losing revenue through the commoditization
of traditional services. To this end, it is vital to enforce the concept of modularization in the relevant dimensions of
product structure, processes and IT. In the following, key action points are presented that essentially increase trans-
parency in terms of collaborative product development processes, as well as under aspects of product, portfolio
and value-network quality.
Time Improvement Action Point

Harmonize and integrate your application landscape to reduce waiting time between departments:
One of the greatest time bottlenecks during the product development process of is the implementation of
product data with regards to OSS and BSS systems. By setting the parameters through integration concepts
such as SOA (Service-Oriented Architecture) that allow for real-time processing and a higher automation
degree, much time can be saved, significantly reducing the waiting-time. For ‘global elephants’ it is particularly
important to also extend the principle of application integration to the partner network.

Correlation:
0.611
Application
Waiting Time
Integration
Costs Improvement Action Point

Modularize your products to increase performance of your PLM workforce:
The objective of modularization is to increase reusability of product components and features in order to
allow for product individualization and ultimately increase product diversity. The principle of modularization
has to be thought through and implemented in a holistic manner, so that the configuration of the product
service systems can be carried out with a maximum degree of efficiency. Implementing a technical modular
production perspective can greatly increase human resources performance since products can be reassembled
as required, rather than having to be designed from scratch.

Correlation:
Product Architecture Costs
0.735
Transparancy of Process and System
Product and Portfolio Implementation Costs

Process Quality Improvement Action Point

Create process variants to improve information logistics in product development
Depending on the innovation level of a product that is to be developed, a varying set of requirements is to be
addressed by the implemented PLM process. By having PLM process variants implemented only the people
involved receive the information that is needed – therefore the risk of information overflow is reduced and
efficient information logistics are established, which is important for product development.

Correlation:
PLM Strategy Process Quality

0.594
PLM Process Variants Information Availability
Product Quality Improvement Action Point

Manage your value-adding partners actively to improve overall product quality:
Due to the fact that the product-service system delivered by telco carriers consists of multiple components
which are provisioned from a value net with individual partners and suppliers, it is vital that the carrier exercises
control in an effective manner – after all it is the carrier’s face that is presented to the customer. In the study it
could be validated that the active management of suppliers in terms of price, product design and logistics leads
to a higher product quality from the customer point of view.

Correlation:
Product Architecture Product Quality

0.651
Manageability of Product Market
Value-Adding Partners Launch Quality

7.3 Key Recommendations Applicable to ‘Emerging Zebras’

For the complexity group of ‘emerging zebras’ the overarching principle is to “standardize, enable integration
and conquer”. Coming mostly from a background with voice-centric product portfolios, standardization in all
design domains will become increasingly important in order to empower the carrier to correctly address customer
needs by adequately managing its PLM implementation. The following key action points address the issues of
standardization of IT interfaces, processes, data and information, as well as standardized development approval
gates in order to achieve operational excellence in the four target domains and to ensure future growth.
Time Improvement Action Point
Establish systematic customer needs management to reduce waiting time:
A well-implemented approach to customer needs management (CNM) ensures that actual and potential
market needs are thoroughly assessed and considered within all relevant decision-making procedures. Since
it minimizes the risk of redundant iterations between different departments that are involved within the PLM
process, CNM can help to reduce waiting time. This holds especially true for ‘emerging zebras’ as they find
themselves in a transitional state from a sellers’ market to a buyers’ market in which CNM becomes increasingly
relevant to handle market dynamics.

Correlation:
0.499
Application Integration Time-to-Market
Costs Improvement Action Point

Standardize your processes to increase customer satisfaction and reduce churn:
In order to hold customer satisfaction high and to ensure customer retention, carriers have to react to market
changes quickly and at a high quality level. This can only be achieved by increasing PLM process automation
and by reducing bottlenecks in the decision-making and process flow. The enabler for process automatation
is the standardization of PLM processes because process execution can only be be modularized and be made
predictable in its results by using standards. Ultimately, customer churn can be reduced by this.

Correlation:
PLM Process Costs
0.460
Process Standardization Churn Rate

Process Quality Improvement Action Point

Ensure empowerment of employees to improve information availability:
The proper implementation of processes, systems and procedures for data management, reporting and con-
trolling are important enablers for information availability. However, according to the findings of the study the
greatest correlation is found with regards to the human factor. Staff members are responsible for recording,
reporting and maintaining the data, so by providing the right resources, tools and incentives, information
availability can be greatly enhanced. This applies to the ‘emerging zebras’ complexity group in particular,
because there the degree of implementationwas found to be insufficient.

Correlation:
PLM Process Process Quality

0.573
Empowerment of
Information Availability
Employees
Product Quality Improvement Action Point

Implement a strict stage-gate approach to increase product market launch quality:
A high level of product market launch quality essentially means that no unexpected difficulties arise in terms of
service quality or functionality when a product is launched in the market. . By implementing a strict stage-gate,
it is ensured that the quality is systematically assessed in a standardized fashion with the help of regularly held
quality checkpoints (or gates) and pre-defined quality and performance metrics. This design element proves to
be particularly relevant for the ‘emerging zebras’ complexity group.

Correlation:
PLM Process Product Quality
0.522
Product Market
Strict Stage-Gate
Launch Quality

8. Achieving PLM Excellence

As the study has given empirical evidence for pursuing a holistic PLM approach in accordance to an carrier’s com-
plexity level, some further answers have to be provided to the questions of which PLM design elements have a high-
er relevance with regards to a company-specific context, and how a potential set of relevant PLM design elements
are to be prioritized under efficiency and effectiveness criteria.
Given the multifaceted nature of PLM, the pursuit of a holistic approach has to follow the general principle of
“think big, start small”. Tackling every possible gap that has been identified will lead to an extraordinary effort
and complexity – since PLM does not only affect individual domains such as IT architecture, but also the areas of
strategy, process and structure. The interdependencies must be taken into account in order to prevent the project
from failure and to mediate the high expectations from top management that cannot be fulfilled in the short run.
Therefore the prioritization of potential fields for action becomes a crucial task for every PLM implementation or
optimization project. In order to perform the prioritization, interdependencies between the design domains need to
be transparent as well as their individual contribution to the achievement of targets. With this information at hand,
an implementation roadmap has to be the final goal in order to initialize the PLM project.
Based on our findings and experience, we recommended carriers to follow a five-step approach for finding the
answers to these questions. It can be referred to as RAPIT:
1. Reflect: Assess your complexity level as a starting point for identifying possible shortcomings of your current
PLM-implementation. This will enable you to evaluate your current PLM landscape structured by PLM strategy,
PLM process, product architecture and IT architecture.
2. Analyze: Follow a meet-in-the-middle approach. First, evaluate your complexity targets and conduct a gap
analysis in order to identify room for improvement. Second, evaluate the implementation degree of the PLM
design elements by applying a gap analysis in order to identify relevant fields for action.
3. Prioritize: Condense the results from step 2 and select specific design elements from the four design domains
and mark possible interdependencies and synergies. In order to fulfill the prioritization task, the impact sphere
of each design element has to be explored. Ideally the resulting knowledge then is coded into a correlation
matrix for each complexity group and can therefore be used to select the design element with the highest im-
pact on the selected targets.
4. Implement: Develop a PLM implementation roadmap and put it into action by using project structure plan-
ning methods.
5. Track: Continuously monitor the implementation progress, adjust and derive counter-measures if required in
order to keep on track.
In order to benefit most from the results of this study, Detecon recommends purchasing the detailed version of this
study in which information about the composition of the PLM design elements and targets will be given in great
detail, and the evaluation for each indicator will be presented specifically for each complexity level. Apart from this,
most of the identified correlations will be published providing carriers with essential information in order to fulfil
the prioritization task on their own.

1 Reflect
…..?
Assess the PLM status quo
…..?
with a standardized questionnaire
…..?
2 Analyze 3 Prioritize
Costs Time
Based on
Identify
Top Down
pre-determined
target
Process Quality Product Quality achievement correlations within
gaps the complexity group,
fields for action can be
prioritized.
Costs
Meet-in-the-middle Combine analyses findings ………… 3 1

in order to conduct prioritization
Product Quality
4
Target Domain
…………
of fields for action
………… 2
…………
Product Architecture PLM IT Architecture
Time
Bottom Up
Identify Proc. Quality

shortcomings
Product Arch.
…………
…………
…………
…………
PLM Strategy
PLM IT Arch.
PLM Strategy PLM Process
in PLM
implementation
Design Domain
4 Implement 5 Track
2010 2011 2010 2011 Continuously

10 11 12 1 2 3 Develop 10 11 12 1 2 3
check project
1.1 … implementation 1.1 …
progress and
1.2 … roadmap based 1.2 …
ensure support
1.3 … on the priority 1.3 … from Top
…. …
list …. … Management
Figure 18: RAPIT Approach for PLM Optimization
In addition, Detecon International and FIR at the RWTH University have prepared a standardized service offering
for telecommunications carriers to perform a PLM audit based on the findings of this study. As a result of this PLM
audit, a PLM implementation roadmap will be developed together with stakeholders from the finance, marketing
and technical departments. The whole process covering information acquisition, data analysis and presentation of
the results can be accomplished in a 3-day workshop session. For more details, please contact any one of the people
listed below.

9. Acronyms
B2B Business to Business
B2C Business to Consumer
BSS Business Support System
C2C Consumer to Consumer
CSP Communication Service Provider
CRM Customer Relationship Management
DMS Document Management System
eTOM Enhanced Telecommunications Operations Map
FAB Fulfillment, Assurance and Billing
ICT Information and Communications Technology
KPI Key Performance Indicator
MMS Multimedia Subsystem
MVNO Mobile Virtual Network Operator
OEM Original Equipment Manufacturers
OSS Operations Support System
PLM Product Lifecycle Management
PSS 1) Product Service System 2) Process Support System
RACI Responsible, Accountable, Consulted, Informed
SID Shared Information and Data Model
SOA Service-Oriented Architecture
VAS Value-Added Services
VoIP Voice over IP
WFMS Workflow Management System

10. The Authors
Dr. Julius Dimitri Golovatchev

Managing Consultant, Detecon International GmbH
Julius.Golovatchev@detecon.com
Oliver Budde
Senior Researcher, Research Institute for Operations Management (FIR), RWTH Aachen
Oliver.Budde@fir.rwth-aachen.de
Chin-Gi Hong
Consultant, Detecon International GmbH
Chingi.Hong@detecon.com
Sergei Holmeckis
Consultant, Detecon International GmbH
Sergei.Holmeckis@detecon.com
Frank Brinkmann
Senior Consultant, Detecon International GmbH
Frank.Brinkmann@detecon.com
For your inquiries, please contact either the authors or the following persons:
Ralph Hiob
Head of Group ‘Process and Product Lifecycle Management’, Detecon International GmbH
Ralph.Hiob@detecon.com
Dr. Roland Keil

Head of Team ‘Product Lifecycle Management’, Detecon International GmbH
Roland.Keil@detecon.com
Without the support and contributions of following people, it would not have been possible to publish this
study. The authors would like to dearly thank:
Apostovola, Penka; Auroux, Sebastien; Auer, Gerhard; Blessing, Ingrid; Böttler, Marc; Derstroff, Mario;
Distelrath, Claudia; Faber, Ralf; Fleck, Stephanie; Grimm, Louisa; Kamps, Christian; Kares, Tobias;
Keferstein, Christian; Kolay, Tahir; Krieglstein, Günter; Lorbacher, Frank; Magsam, Nadine; Meißner, Golo;
Müller, Hermann-Josef; O’Neal, James; Sarituc, Taner; Schirmer, Melanie; Schuhmann, Sascha; Wolter, Dr. Sven;
Wurm, Christian

11. The Company

Detecon International
Detecon is one of the world’s leading consulting companies and unites classic management consulting with a high
level of technology expertise. Our services focus on consulting and implementation solutions which are derived
from the use of information and communications technology (ICT).
Detecon’s expertise bundles the knowledge from the successful conclusion of management and ICT consulting
projects in more than 160 countries. We are represented globally by subsidiaries, holding companies, and project
offices, so we benefit as consultants from the infrastructure of a global player which spans the planet.
Our services for ICT management encompass classic strategy and organization consulting as well as the planning
and implementation of highly complex, technological ICT architectures and applications. We are independent of
manufacturers and obligated solely to our client’s success. Detecon is a subsidiary of T-Systems International, the
key account brand of Deutsche Telekom.
Research Institute for Operations Management at RWTH Aachen University
FIR, the Research Institute for Operations Management at Aachen University of Technology (RWTH), is a non-profit
membership research organization. The institute currently has 145 industrial members representing a wide array of
industries (from raw materials over production to service industries).
The institute is a centre of excellence in the fields of rationalization and operations management and focuses on
industry-oriented research. Currently employing 45 PhD students it operates in national and international networks
and cooperates with different associations and institutes.
FIR develops models, methods and concepts which are implemented in cooperation with project partners in both
industrial and service enterprises. The FIR is specialised in production management and logistics, service manage-
ment and information management.

Detecon International GmbH
Oberkasseler Straße 2
53227 Bonn – Germany
info@detecon
www.detecon.com
© 09/2010

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© Detecon International GmbH 1

Published by Detecon International GmbH,

Oberkasseler Straße 2, D-53227 Bonn

2 © Detecon International GmbH

2. A Wind of Change in the Telecommunications Industry 10

3. PLM Framework for Communication Service Providers 13

4. Study Goals and Design 16

5. PLM Design Elements for Coping with Complexity 21

6. PLM Impact on Complexity Management Targets 36

8. Achieving PLM Excellence 60

10. The Authors 63

11. The Company 64

© Detecon International GmbH 3

Figure 2: Three complexity groups of participating carriers 6

Figure 3: Overview of 23 PLM Design Elements and 16 Target Elements 7

Figure 6: Holistic PLM Framework 14

Figure 7: Study Goal 16

Figure 8: Worldwide Coverage 18

Figure 9: Demography of Participants 19

Figure 10: Deﬁnition of Three Complexity Groups 20

Figure 11: Overview of 23 PLM Design Elements 21

Figure 12: Implementation Degree of PLM Strategy Design Elements 22

Figure 13: Implementation Degree of PLM Process Design Elements 25

Figure 14: Implementation Degree of Product Architecture Design Elements 29

Figure 15: Implementation Degree of PLM IT Architecture Design Elements 32

Figure 16: Overview of 23 PLM Design Elements and 16 Target Elements 36

Figure 17: Impact of Target Domains on PLM Curve 52

Figure 18: RAPIT Approach for PLM Optimization 61

4 © Detecon International GmbH

Leveling the PLM Curve by Meeting Complexity Targets

Legend: Cash-Flow Performance without PLM Cash-Flow Performance with PLM

Figure 1: Impact of a Holistic PLM on Complexity

© Detecon International GmbH 5

product and services portfolio

Highly turbulent market

Moderately Product and

diverse product service portfolio

14 million customers 2 million customers

Less dynamic market and

environment or a market regulated environment

Emerging Zebras Protected Penguins

Figure 2: Three Complexity Groups of Participating Carriers

6 © Detecon International GmbH

Time Cost Process Quality Product Quality

Process & System Provisioning

PLM Strategy PLM Process Product Architecture PLM IT Architecture

Transparency Modular Extended

of Product & Collaboration

Figure 3: Overview of 23 PLM Design Elements and 16 Target Elements

© Detecon International GmbH 7

Time Improvement Action Points:

Costs Improvement Action Points:

Process Quality Improvement Action Points:

Product Quality Improvement Action Points:

8 © Detecon International GmbH

Global Elephants Emerging Zebras

Harmonize, enable diversity Standardize, enable integration

Harmonize and integrate your Increase integration of your

Utilize KPIs to increase Standardize your processes to