Appointing a System Integrator to lead the implementation a PLM solution / platform does not guaranty success; neither does it mitigates every risk related to poor delivery performance, delayed deployment, limited value-add, lower benefit realization, etc. Nevertheless, when well executed and based on the context, appointing a capable System Integrator can significantly reduce investment uncertainties by purchasing managed services in the form of “turnkey projects”. Such approach provides the opportunity to mitigate deployment risks through fixed-price delivery milestones and other commercial incentives. Both delivery and engagement models have dependencies on the selected commercial model (and vice et versa) to drive successful PLM implementations.
In part 2 of this two-part post series, we elaborate on the selection criteria to appoint a System Integrator when running PLM implementation RFQs, things to watch-out for, critical success factors, commercial and delivery risk mitigations.
Selecting a System Integrator is an important activity, typically run as part of a competitive RFQ process. It might involve various initial pre-checks, early studies, preliminary assessments or discoveries to validate a number of key assumptions. In most cases, such activities typically cover the need for robust input and sufficient knowledge for the System Integrator to confirm the viability of the proposed solution and for them to quote as accurately as possible (with controlled contingency or risk mitigations which are likely to drive future cost deviations if inaccurately estimated).
System Integrator selection criteria
Selecting a System Integrator typically implies looking at 9 essential assessment criteria (in no particular order of importance):
- Scope, dependencies and assumptions clarity: does the System Integrator understand the scope and how their proposal align or enhanced the proposed scope?
- Trusted accountability: is the System Integrator open and transparent in their response and proposal / quote? Is it recommended / respected by the vendor and / or other suppliers?
- Credible and transparent delivery plan: has the System Integrator embedded the relevant assumptions and mitigations in their proposed plan?
- Cultural-fit, suitability, right-size organization: are the System Integrator’s culture and values, size and structure, proposal terms and approach aligned with the organizational culture?
- Overall credibility and active executive engagement: does the System Integrator have the credibility and credentials to take on the solution as scoped? Has it delivered similar projects before (relevant technology, industry, etc.)? What case studies and references do they used as evidence, including client reference calls or visits?
- Technical and business change competency (across data, process, people, platform, tools, etc.): does the System Integrator have the relevant competent resources, and are these resources available in sufficient numbers and at relevant locations, culturally aligned with local context and practices? Is the delivery team identified and ready to be mobilized?
- Competitive pricing and robust risk mitigations: is the System Integrator commercial model credible and backed up with sufficient ‘skin in the game’, yet credible and aligned commercial terms, delivery and engagement assurance?
- Positive impact on total cost of ownership: is the commercial proposal of the System Integrator sufficiently detailed and transparent with relevant contingencies? What will be the commercial implications and models to maintain and support the solution post deployment?
- Mature and proven delivery models and tools: has the System Integrator demonstrated evidence of technical frameworks such as integration sandboxes, access to latest technologies, business change, data migration practices?
PLM implementation critical success factors
Selecting a PLM platform and a System Integrator are typically two different procurement workstream and RFQ processes:
- Both vendor and System Integrator RFQs align to problem resolution, business requirements, future maintainability and evolutions, risk mitigation, value for money, flexibility, adaptability and commercial ‘skin in the game’.
- Vendor RFQs focus on platform capabilities, future roadmap, licensing models, industry best practices, solution benchmarking, configuration, compatibility, integration fit, executive alignment and long-term relationships, etc.
- System Integrator RFQs focus on technical credibility, competency, trusted advisory, technical and business knowledge, organizational and delivery skills, etc.
Critical success factors when selecting a System Integrator include:
- Effective senior management support
- Effective out-coming communication
- Local and global delivery capability (as relevant)
- Internal PLM development lab (on the relevant platform)
- Known organizational structure
- Appropriate outsourcing management (including global delivery model)
- Appropriate strategy, target operating model (TOM) and delivery frameworks
- Appropriate understanding of data, system, integration, etc. (transparency with regards to gaps and mitigations)
- Etc.
System Integrator: do you really need one?
Not every PLM / business change initiative requires the appointment of a System Integrator; this is certainly more relevant for complex projects with large amount of information, clearly defined scope and solutions boundaries, where an organization does not have sufficient technical knowledge or internal bandwidth. With ‘turnkey projects’, System Integrators can also benefit from delivery and commercial flexibility, such as choosing their resources with relative levels of scrutiny from their client (other than key personnel) or controlling internal cost as they wish to increase their chance of profit.
Appointing a System Integrator is a mean to an end: to maximize return on PLM investments—going beyond the system alone, but everything else that surrounds such platform implementation while mitigating delivery risks. Managing turnkey projects and System Integrator activities also require a different mindset and organizational culture towards supplier performance management rather than resource micro-management.
What are your thoughts?
This post was originally published on Momentum-PLM on 9 October 2020.
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