The Cost of PLM

The overall cost of a PLM solution is comprised of several elements and dependent on a number of factors.

Cost Element	Cost Type	%¹⁾	Cost Dependent On n
Software	One-time capital investment	30%	Number of users Type of users: Authors and viewers Required functionality or functional modules Deployment option: On-premise or on-demand Licensing method: Floating licenses or named user licenses List price and discount
Software maintenance	Annual recurring expense	6%	Number of users Type of users: Authors and viewers Required functionality or functional modules Deployment option: On-premise or on-demand Licensing method: Floating licenses or named user licenses List price and discount
Hardware	One-time capital investment	8%	Number of users Number of sites Required configuration Desired performance Quantity of data and required disk space Required system availability and uptime Deployment option: On-premise, hosted or on-demand List price and discount
Education and software selection	One-time expense	8%	Number of system included Understanding of PLM Market knowledge Duration Thoroughness of evaluation Involvement of an external PLM consultant
Process optimization	One-time expense	8%	Number of processes Size of organization Documentation of existing practices and processes Methodology Understanding of PLM Involvement of an external PLM consultant
Implementation services	One-time expense	25%	Required configuration and/or customization Contract terms: Fixed price or time & material Hourly rate and discount
Training	One-time expense	5%	Training delivery: Vendor or Train-the-Trainer Training material: Standard or custom Training location: Vendor, on-site and/or web-based
Data migration	One-time expense	5%	Approach: Manual or automated Number of source systems Type of data: Metadata (item master, etc), structured data (BOM, assemblies, etc), files (CAD models, drawings, documents, etc) Quality of data Quantity of data
Post-go-live support	Annual recurring expense	5%	Duration Type and level of support Required response time Required system availability Hourly rate and discount

¹⁾ Approximate share of total initial cost (one-time capital investments, first-year software maintenance, one-time expenses and initial post-go-live support)
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Based on the different elements and dependencies it is obvious that the cost of a PLM solution can vary widely. We know of companies that have implemented PLM for a few users and with limited functionality for less than $10,000, but there are also companies that have implemented extensive PLM functionality for tens of thousands of users and have spent millions of dollars.

As a rule of thumb we have found in numerous projects that the initial cost for a complete PLM solution will generally be in the range of $4,000 to $6,000 per user (for capital investments and one-time expenses). Where in this range the overall cost falls depends largely on the number of users and the implemented functionality. The more users, the lower the cost per user, and the more extensive the functionality, the higher the cost per user.

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