As a startup owner, you’re probably most concerned with getting your products or services out to market and reaching the largest audience you can.
But keeping track of how you develop and mature new products is also important, even if your company is relatively young.
Understanding how product life cycle management (PLM) works and how to incorporate it into your startup can help improve your company’s workflows and reduce the time to market for your new products.
Table of contents:
- What is product life cycle management?
- Product life cycle management process
- Tips for incorporating a PLM system
What is product life cycle management?
Product life cycle management encompasses every stage of a product’s life, from the initial product design to debuting on the market to its end of life.
It boils down to how you manage data and process information for a product throughout its life. This is part of the wider field of product management, which focuses on not only the timeline but also how a product plays out in different departments, like sales or prototyping.
With this life cycle management system, you’ll track how long it takes a product to move through each stage. You’ll also optimize each step, so you can cut costs or reduce the time spent on stages like development.
PLM covers both the manufacturing and the marketing of your products. You can track how much you spend on each stage and adjust your pricing, supply chain, designs, and marketing campaigns to better meet your business’s and customers’ needs.
You may use product data management (PDM) or PLM software to help track your data. While a PDM program is typically used by engineering teams to manage technical data, PLM software is more comprehensive, covering information from all departments and life cycle stages.
The stages of product life cycle management
PLM has several major stages, as described by economist Theodore Levitt in 1965. For the sake of this example, assume you’re following your software-as-a-service (SaaS) company’s new app through its life cycle, from its initial ideation to being phased out.
Development
First up, you’ve got to design and plan out your product. At this stage, your engineers and other stakeholders come up with the look, materials, specs, and any unique features that will help the product stand out.
In the case of the app example, this is when your team tackles debugging and streamlines its functionality.
Introduction
This is sometimes grouped into the development stage. At this point, you’re introducing your product to customers and making it available for purchase.
You may have a well-thought-out marketing campaign to start, or you might just have a handful of staff asking friends and family to help spread the word that you’ve got a new, better product.
Returning to the app example, you could advertise on social media and other apps to encourage new downloads.
Growth
This stage encompasses the steps you take to keep your sales, production, and revenue up. You may make changes to your business processes as your team gets used to dealing with the new product, or you may learn how to deal with supply chain management issues if they arise.
For the app example, this would be when you’re dealing with bug fixes, encouraging customers to leave a review, and watching your download numbers rise.
Maturity
In the maturity stage, your product has pretty much peaked in its development. You may still have strong sales, but you’re already seeing ways where your product won’t be able to keep up with new demands. This could be due to upgrades in software systems or changes in the market.
Going back to the app example, this would be when you start to see new downloads leveling off. At this stage, you’ll need to plan ahead for your next big project.
Decline
Finally, there’s the decline stage. At this point, your product is not performing as well as it once was. You’re probably preparing to stop selling it soon, though the decision-making process behind that can be complicated, depending on your market.
In the case of the app example, it may not work on a new operating system, or perhaps newer devices don’t support it. You’ll need to notify customers when you’ll be dropping support for the product and encourage them to check out your next big hit.
Product life cycle management process
In order for the PLM process to work, you need to involve the right team members at each stage. For example, you need engineers and designers working on concept and design, but you’ll also want to bring in your marketing team to help everyone understand what customers want.
You might find that mixing these teams can bring about new points of view or inspire manufacturing process adjustments or engineering changes.
Similarly, you want other teams to take a look at a product’s marketing campaign to ensure it describes the product accurately and that any mock-ups are correct. By using a PLM process, you’ll have checks in place to deal with these issues.
Think of a PLM solution as a system that gives your team the data they need in real time. With the right information about each stage, you can make more informed decisions, improve product quality, and continue to optimize your management processes.
But just knowing what a PLM is isn’t enough. You’ve got to implement this strategy to see any results. In a McKinsey survey, 75% of product managers said product management best practices weren’t being incorporated at their company.
This is surprising, considering how many benefits a modern PLM offers.
The benefits of following a PLM system
When you implement a PLM system, you’ll have more metrics and data to work with. That will help you make more informed decisions at each stage of your product’s life.
For example, you can find new places to add automation or discover when a product’s demand starts to taper off.
If you choose to work with a product management framework, you can combine it with your understanding of the life cycle to further categorize and plan for each stage.
Tips for incorporating a PLM system
Now that you know what PLM involves and how it can help you be more productive, it’s time to focus on how to incorporate it into your startup. While it can seem like more of an enterprise-level concept, using PLM can help your small business stay organized, too.
Focus on the basics
You don’t need to jump right into using an expensive PLM software program if you don’t have the budget for one.
Ivan Luka, founder of RPG Overload and a CFA (Chartered Financial Analyst) charter holder, advises, “Begin with spreadsheets or basic project management tools to track product development stages. Consider open-source PLM software or tools with free versions to reduce costs.”
Some open source or free options include OpenBOM, Odoo, and SolidPartners’ 4G:PLM.
Don’t put all your eggs in one basket
Startups are young and typically have just a few offerings. Because of this, many new companies tend to focus on the product development process and marketing new product launches.
But not paying as much attention to how your product matures or preparing for when it eventually becomes obsolete could cost you in the future.
Brett Schiller, founder of Fishkeeping Wisdom, an aquarium and fish-keeping company, notes PLM helped them pivot when a popular product started to decline.
“Through PLM, we realized its sales were plateauing and new competitors were emerging,” he says. “This sparked our decision to innovate and release an upgraded version, extending the product’s life and boosting our market position.”
Listen to your customers
Using product life cycle management software is a great start, but if you combine it with data from your customers, you’ll be able to take action to address any issues.
“By tracking customer feedback, we identified and fixed problems with the product. This helped us to improve the product’s quality and customer satisfaction,” says James Lott, founder and CEO of Scripted, an online pharmacy solution.
Remember, your customers can help you out at each product life cycle management stage. You may come up with your first product after listening to family and friends. Then, when introducing the product, you’ll listen to the feedback you receive from your initial marketing efforts.
Once you’ve gotten some feedback, you can make some changes to your product or how you market it. This will hopefully lead to growth and, eventually, maturity. Finally, you’ll continue to listen for feedback and use it to help judge when it’s time to phase out your product.
While each product and industry has a slightly different life cycle, a PLM system will help you learn more about your products and customers. And you can use your product information to reduce costs, improve quality, reduce time to market, and drive innovation at your company.
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