1. This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Lessons Learned in the Deployment of Product Lifecycle Management Software and Processes Marc Halpern, P.E., Ph.D. 30-April 2009

2. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 2 Are We Reliving the Painful History of 19th Century Railroads?

3. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 3 Railroad History Insights for Product Data Exchange Railroad standards took 70 years Sometimes “arbitrary” decisions given legacy Standards win over best technology over the long term A key advantage for the North during the U.S. Civil War Time zones Derivative business opportunities and cultural changes due to standards

4. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 4 Key Issues What business priorities influence PLM software and PDE needs in the Aerospace and Defense industry? What is the state of PLM and PDE in the Aerospace and Defense industry today and trends? What are the top priorities and best practices for Aerospace and Defense manufacturers to deploy PLM and share product data more effectively?

5. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 5 Key Issues What business priorities influence PLM software and PDE needs in the Aerospace and Defense industry? What is the state of PLM and PDE in the Aerospace and Defense industry today and trends? What are the top priorities and best practices for Aerospace and Defense manufacturers to deploy PLM and share product data more effectively?

6. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 6 Sampling of Gartner A&D clients 10 Gartner A&D clients 934 interactions over 18 months 133 inquiries analyzed

7. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 7 ERP, Enterprise Architecture, Product Design, and Security 10 Gartner A&D clients 934 interactions over 18 months 133 inquiries analyzed Source: Gartner 2009

8. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 8 A&D Firms Request Feedback on Enterprise Architecture and Process Design Most Broadly Source: Gartner 2009

9. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 9 Gartner Product Lifecycle Management Survey – 67 Manufacturers Have Participated So Far In collaboration with Profs. Satish Nambisan (RPI) and Rob Fichman (Boston College) Source: Gartner 2009

10. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 10 A&D Companies Prioritize PLM for Cost Reduction, Quality Improvement, and MRO Source: Gartner 2009

11. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 11 Importance of PLM Integration With ERP, SCM, and MES Reflects Complexity of NPI in A&D Source: Gartner 2009

12. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 12 PLM Business Benefits Align Across All Manufacturing Verticals Source: Gartner 2009

13. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 13 A&D Attention to PDM, Requirements Mgmt. and Regulatory Reflect Industry Pain Points Source: Gartner 2009

14. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 14 Key Issues What business priorities influence PLM software and PDE needs in the Aerospace and Defense industry? What is the state of PLM and PDE in the Aerospace and Defense industry today and trends? What are the top priorities and best practices for Aerospace and Defense manufacturers to deploy PLM and share product data more effectively?

15. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 15 All Industries report Lack of Consensus and Standards as the Greatest Challenge Source: Gartner 2009

16. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 16 A&D Network-Centric Manufacturing Community Cites Causes for Collaboration Failures Courtesy of Doyle Center, Ken Saban of Duquesne University, October 2007 Factors Impeding Collaboration Factors Impeding Trust

17. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 17 What Is the Status of PDE Maturity? Report Card GradeComments Completeness Piecemeal coverage, mostly proprietary, STEP unfulfilled Semantics Progress at geometry, everything else manual Reliability Improving steadily Adoption STEP —Proprietary formats are adopted faster Characteristic B- B C

18. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 18 The Next Phase: Process-Centric Work Flow Replaces Software Silos Through SOA Key Role Supporting Role CPM – Corporate Performance Management CRM – Cursomter Relationship Management EAM – Enterprise Asset Management ERP – Enterprise Resource Planning MES – Manufacturing Execution Systems MPM – Manufacturing Process Management PLM – Product Lifecycle Management SCM – Supply Chain Management SRM – Supplier Relationship Management Source: Gartner 2009

19. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 19 Product Lifecycle Process Composition Through SOA Meta- database Metadata Business Process Manager Database User Role 1 User Role 2 User Role 3 Service ERP PDM CAD Database Service MES Service Business Process Modeling and Management Source: Gartner 2009

20. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 20 Best SOA Practice Moves Beyond Data Integration; SOA Means Careful Process Planning and Modeling Source: Gartner August, 2008 51% of Asia/Pacific organizations are placing importance on data integration as a significant part of SOA initiatives. SOA plans and activities either have no emphasis on, or play only a small part in, building data integration capabilities as a reusable service Key Findings

21. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 21 Opportunities and Challenges on the A&D Top Priorities Enterprise Architecture and SOA -Opportunity: Cross disciplinary data sharing and process definition -Challenge: Process immaturity and lack of consensus on shared services pose greater obstacles than technology Process design and management -Opportunity: Adopting simulation-based process design broadly – across product design, manufacturing, sourcing, maintenance, etc. -Challenge: Insufficient simulation experience and expertise Product design -Opportunities: growth in physics-based virtual prototyping, design for manufacturability, design for serviceability, design for retirement, advancing systems and mechatronics design -Challenges: Vanishing expertise, Increased demands on global data sharing, exploding infrastructure demands, migration from legacy systems, immature systems engineering tools, complexity of composites

22. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 22 Key Issues What factors influence product data exchange priorities in the Aerospace and Defense industry? What is the state of the product data exchange landscape and how will it evolve? What are the top priorities for Aerospace and Defense manufacturers to share product data more effectively?

23. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 23 Some Predictions Through 2012, at least 33 percent of PLM initiatives will fail because the business requirements and environment are not well defined or understood Through 2012, the A&D manufacturers will still use proprietary formats for the majority of product data exchange

24. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 24 Top Managerial Priorities Building communities of trust across A&D value chains Educated rather than blind governance of data and process standards Move beyond current stage-gate practices for program management Generous education and training programs More rewarding incentive programs and career paths for technical professionals

25. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 25 Top PLM Deployment Best Practices This page intentionally left blank for shared version of presentation

26. © 2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. _ _ 26 Top Enterprise Information Architecture Best Practices Business leadership participation Create horizontal ballpark views of information architecture first Classification according to business function first with some sensitivity to process Keep links between complementary information systems to a minimum but no less Migrate legacy information systems to new architectures via data hubs Appreciate differences between operational data needs and informational/analytic data needs