Market Perspectives

ISG Research is happy to share insights gleaned from our latest Buyers Guide, an assessment of how well software providers’ offerings meet buyers’ requirements. The Product Lifecycle Management: ISG Research Buyers Guide is the distillation of a year of market and product research by ISG Research.

In an increasingly complex and competitive global marketplace, enterprises are under constant pressure to innovate, streamline operations and bring products to market faster while maintaining high levels of quality in production cycles and compliance with any range of regulatory standards. Organizations must balance the demands of rapid product development with cost efficiency, regulatory adherence and the complications of supply chains to meet manufacturing cycles.

ISG Research defines product lifecycle management (PLM) as the business processes and applications that manage and operate existing product lifecycles and support the innovation in new ones. PLM enables enterprises to manage a product from its initial conception through design, production, operations and governance. PLM systems help facilitate the efficient management of products, allowing enterprises to maximize innovation, improve quality and reduce time to market. In this modern age of PLM, the need to support a range of innovation in 3D visualization and augmented reality must support carbon footprint and sustainability requirements.

The market demand for PLM software and its continuous improvement has never been more acute. As product complexity increases, with more intricate designs and shorter lifecycles, the challenge of managing product development efficiently becomes more formidable. Global competition and increasing customer expectations demand faster innovation cycles and higher quality standards. The need to conform to stringent regulatory requirements adds another layer of complexity that businesses must navigate.

PLM software addresses these challenges by providing a centralized repository for manufacturing and supply chain-related product information and documents. It breaks down information silos, enabling cross-functional teams to collaborate effectively. With PLM, the enterprise can streamline workflows, enhance decision-making and maintain a unified, up-to-date view of products and the underlying processes to the bill of materials (BOM) and sourcing.

The scope of PLM encompasses strategic areas, including management, design, production, operations and governance of products and supporting processes. Critically, at the core of PLM are the design processes that support product development, requirements management, specifications and configurator-to-image management. By managing information and integrating it across disparate systems and processes, PLM ensures a holistic approach to product development, from idea to end-of-life. Beyond production, operations around bill of materials, orders, product catalogue, supplier and vendor management as well as document management are critical parts of ensuring the effective management of the lifecycle of products.

In an era where customer-driven innovation is critical, PLM enables enterprises to align product development with market requirements. By harnessing collaborative tools and real-time data, companies can respond swiftly to changing customer needs and market dynamics. This agility not only helps in maintaining a competitive edge but also in fostering a culture of continuous improvement and innovation. The inherent flexibility of PLM systems allows businesses to scale operations and adapt to evolving technological and market demands.

As a result, PLM software has become an essential tool for enterprises across various industries, including automotive, aerospace, electronics, consumer goods and fashion. For example, in the automotive industry, PLM is used to manage intricate design, engineering and manufacturing processes, ensuring compliance with safety standards and continuous product innovation. In aerospace, PLM helps manage the complexity of aircraft design, regulatory compliance and reliability, all while controlling costs. This is why the focus of PLM for governance across quality management, audit and review, and support of regulatory compliance is integral to this software.

Given the breadth of PLM's capabilities, it is not surprising that the market for PLM software is both complex and dynamic. The growth of the Internet of Things (IoT), artificial intelligence (AI) and supporting analytics are spurring further advancements in PLM systems. Today's PLM solutions are more powerful, integrated and user-friendly than ever before, benefiting a growing set of users who need to interoperate with the software. They offer advanced analytics, cloud-based deployment options and mobile access, allowing for real-time data sharing and collaboration.

However, leveraging PLM to its full potential requires a strategic approach. It is imperative for businesses to understand not only the technology itself but also how it aligns with their specific needs and processes. This understanding is crucial for selecting the right PLM software and for implementing it effectively.

The concept of product lifecycle management has its roots in the engineering and manufacturing practices of the late 20th century. Initially, PLM was focused on product design and engineering data management. As industries grew more complex and global, the limitations of traditional product data management systems became apparent. Enterprises needed a more comprehensive approach to manage product information across the entire lifecycle, from design and development to manufacturing and maintenance.

Over the years, PLM has evolved significantly. The advent of the internet and digital technologies brought new opportunities for collaboration, information sharing and innovation. Integrated PLM systems emerged, connecting various aspects of product development and supply chain management. Modern PLM solutions now incorporate sophisticated features such as digital twins, predictive analytics and advanced simulation tools, reflecting the growing complexity and technological advancements in product development. The need to integrate carbon footprint and sustainability information is increasing to ensure internal operations comply with external reporting requirements.

By 2028, one-quarter of product information management (PIM) and product experience management (PXM) software providers will acquire or combine with product lifecycle management (PLM) to meet the needs of enterprises.

In today's dynamic business environment, enterprises face a multitude of challenges that necessitate robust PLM solutions. Organizations must navigate rapid technological changes, increasing product complexity and market pressures to innovate and reduce costs. Consequently, modern enterprises need a PLM system that offers comprehensive capabilities to meet these demands.

First and foremost, organizations require PLM software that facilitates seamless collaboration among cross-functional teams. Product development often involves diverse groups, including design, engineering, manufacturing, marketing and support. Efficient collaboration and information sharing are essential for aligning efforts, reducing errors and expediting decision-making. PLM systems should provide a centralized platform for real-time data access and collaboration, enabling teams to work cohesively across geographic and departmental boundaries.

Another critical need for enterprises is flexibility and scalability in PLM solutions. As businesses grow and evolve, their PLM requirements may change. A PLM system must be adaptable to accommodate new processes, technologies and market conditions. Scalability is equally important, as enterprises should be able to scale their PLM solutions to match their operational needs, whether they are expanding product lines, entering new markets or integrating new technologies.

The ability to manage and safeguard vast amounts of data is another crucial aspect of PLM. Products today generate significant data throughout their lifecycle, including design files, manufacturing records, quality reports and customer feedback. PLM systems must efficiently organize and store this data, ensuring its accuracy, security and accessibility. Robust data management capabilities enable enterprises to leverage data-driven insights for informed decision-making and continuous improvement.

Compliance with industry standards and regulations is a non-negotiable requirement for many enterprises, especially those operating in highly regulated sectors such as aerospace, automotive, and medical devices. PLM software must offer features that simplify regulatory compliance, including audit trails, documentation control and change management. Ensuring compliance not only mitigates legal risks but also reinforces customer confidence in the enterprise's commitment to quality and safety.

Additionally, modern enterprises seek PLM solutions that enable innovation and speed to market. The competitive landscape demands rapid product development cycles and the ability to respond swiftly to market changes. PLM systems should support agile methodologies, streamline workflows and reduced time to market. By providing tools for ideation, simulation and prototyping, PLM software empowers enterprises to innovate continuously and bring new products to market faster.

For PLM software to be effective and truly meet the needs of enterprises, it must possess a set of critical attributes. These attributes ensure that PLM solutions facilitate collaboration, innovation, data management, compliance and adaptability.

Effective collaboration is paramount in product development. Successful PLM software should offer robust tools for real-time communication, data sharing and project management. Features such as collaborative workspaces, version control and integrated workflows enable cross-functional teams to work seamlessly, reducing bottlenecks and enhancing productivity. The ability to collaborate effectively accelerates decision-making and ensures alignment across all stages of product development.

Flexibility and scalability are key attributes that any successful PLM software must possess. Enterprises operate in ever-changing environments, and their PLM systems should be able to adapt to evolving needs. Whether introducing new products, adopting new manufacturing processes or integrating emerging technologies, PLM software should have the flexibility to accommodate these changes. It is critical that PLM software supports variability management as well as a range of product versions in the manufacturing or assembly processes. Scalability ensures that the PLM system can grow with the enterprise, accommodating increasing data volumes and expanding operations.

Robust data management capabilities are essential for any PLM solution to succeed. PLM software should efficiently handle the vast amounts of data generated throughout the product lifecycle. This includes organizing, storing and securing data, as well as ensuring its accessibility and accuracy. Advanced search functionalities, metadata management and data visualization tools enable users to find and interpret data quickly. Data integrity is crucial, as accurate and timely data is the foundation for informed decision-making.

Compliance features are critical for enterprises in regulated industries. Successful PLM software should include capabilities to manage compliance with industry standards and regulations. This includes features such as change management, audit trails and documentation control. Compliance and regulatory support should help ensure that all product development processes adhere to regulatory requirements, reducing the risk of legal issues and enhancing product quality and safety.

Lastly, user-friendliness and integration capabilities are vital for the success of PLM software. A user-friendly interface ensures that teams can adopt and use the PLM system effectively, minimizing the learning curve and maximizing productivity. Integration capabilities allow the PLM software to connect seamlessly with other enterprise systems, such as ERP, CRM and MES. Seamless integration ensures that data flows smoothly across all systems, enabling a unified view of product information and processes.

As enterprises navigate the complexities of product development, selecting the right PLM software is a strategic decision that can have far-reaching implications. A well-suited PLM solution empowers organizations to innovate, collaborate and manage data effectively, ensuring compliance and adaptability in a dynamic business environment. When evaluating PLM software providers, enterprises should consider attributes such as collaboration tools, flexibility, data management capabilities, compliance features, innovation support, user-friendliness and integration. PLM software should integrate closely with PIM and support the broader set of requirements from customer and commerce to supply chain and supplier systems.

By carefully assessing these factors and aligning their PLM strategy with business goals, enterprises can make informed decisions that drive success and maintain a competitive advantage. With the right PLM software, organizations can manage the entire product lifecycle efficiently and cost-effectively, positioning themselves for sustained growth and innovation.

The ISG Buyers Guide™ for Product Lifecycle Management evaluates software providers and products in key areas based on analyst and administrative specific support, catalogue management support, content management infrastructure support, alignment to benefits, data management infrastructure support, digital asset management support, digital innovation, enterprise support, integration specific support, industry standard support, management and manager specific support, PLM application support, product lifecycle support, product manager support, product specific management support, supplier support and investment.

This research evaluates the following software providers that offer products that address key elements of PLM as we define it: Aras, Arena, Bamboo Rose, CentricSoftware, CONTACT Software, Dassault Systems, Epicor, IBM, Infor, Logility, Oracle, Propel Software, PTC, Revalize, SAP and Siemens.

This research-based index evaluates the full business and information technology value of product lifecycle management software offerings. We encourage you to learn more about our Buyers Guide and its effectiveness as a provider selection and RFI/RFP tool.

We urge organizations to do a thorough job of evaluating product lifecycle management offerings in this Buyers Guide as both the results of our in-depth analysis of these software providers and as an evaluation methodology. The Buyers Guide can be used to evaluate existing suppliers, plus provides evaluation criteria for new projects. Using it can shorten the cycle time for an RFP and the definition of an RFI.

The Buyers Guide for Product Lifecycle Management in 2025 finds SAP first on the list, followed by Oracle and Siemens.

Software providers that rated in the top three of any category ﹘ including the product and customer experience dimensions ﹘ earn the designation of Leader.

The Leaders in Product Experience are:

• SAP.
• Oracle.
• Siemens.

The Leaders in Customer Experience are:

• Oracle.
• SAP.
• Siemens.

The Leaders across any of the seven categories are:

• SAP, which has achieved this rating in seven of the seven categories.
• Oracle in six categories.
• Siemens in five categories.
• Dassault Systems in two categories.
• Aras in one category.

The overall performance chart provides a visual representation of how providers rate across product and customer experience. Software providers with products scoring higher in a weighted rating of the five product experience categories place farther to the right. The combination of ratings for the two customer experience categories determines their placement on the vertical axis. As a result, providers that place closer to the upper-right are “exemplary” and rated higher than those closer to the lower-left and identified as providers of “merit.” Software providers that excelled at customer experience over product experience have an “assurance” rating, and those excelling instead in product experience have an “innovative” rating.

Note that close provider scores should not be taken to imply that the packages evaluated are functionally identical or equally well-suited for use by every enterprise or process. Although there is a high degree of commonality in how organizations handle product lifecycle management, there are many idiosyncrasies and differences that can make one provider’s offering a better fit than another.

ISG Research has made every effort to encompass in this Buyers Guide the overall product and customer experience from our product lifecycle management blueprint, which we believe reflects what a well-crafted RFP should contain. Even so, there may be additional areas that affect which software provider and products best fit an enterprise’s particular requirements. Therefore, while this research is complete as it stands, utilizing it in your own organizational context is critical to ensure that products deliver the highest level of support for your projects.

You can find more details on our community as well as on our expertise in the research for this Buyers Guide.