Christine Labarre, Senior Manager

(1) See our study from this past year on the remaking of finance and investment banks’ economic model.

Industry and finance
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In the industry, where the competitive environment makes speed, quality and price the main criteria, creating a new product and keeping track of its commercial performance are vital activities in which complexity in product configuration has to be managed. To focus their energy on issues of brand image, renewal and cost optimization, manufacturers need to be able to have complete confidence in the solutions they choose. Companies dealing with the pressures of a competitive environment and the high expectations of end consumers are increasingly turning to Product Lifecycle Management applications (PLM). High-technology PLM solutions can be used to turn the biggest challenges of a trend-driven industry into sustainable competitive advantages.

As Corporate and Investment Banking are also dealing with complex products and process optimization, PLM solutions could be of a great advantage in production control and value creation, as well as in overcoming business challenges and contributing to overall growth and profitability.

Adding value to product Lifecycle
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PLM is much more than a technological system. It is a strategic business approach that enables an organization to enhance efficiency in a product’s development – from introduction to retirement. The goal of PLM is to effectively and efficiently innovate and manage its products and related services throughout the entire business lifecycle and to ensure a product’s rapid and smooth movement through the production process.

The integration of business applications and process management software enables action to be taken in key areas that lead to improved performance: capacity for innovation, brand identity, frequency and time to market, quality assurance, control of development costs for products and materials, management and synchronization of multiple processes, and decision-making concerning the product.

To maximize the benefit, the PLM solution interfaces with other enterprise applications, such as enterprise resource planning (ERP), supply chain management (SCM), customer relationship management (CRM), manufacturing resource planning (MRP) and other application areas.
 

PLM Business Benefits
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The strategic response of organizations to make smarter product management decisions to ensure quick delivery, better product quality and cost pressures is to find ways to centralize and manage all product information, ensure advancing collaboration within the extended enterprise and improve control and visibility on projects. In addition, organizations must deal with ensuring audit and regulatory compliance, giving the ability to audit every available piece of product documentation.

Product Lifecycle Management’s objectives are to improve and accelerate time to money and promote innovation at both the product and process levels. This translates into a noticeable improvement in market acceptance of products and in the revenue they can generate.
 

A successful PLM solution
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> Creates a value chain where information and transactions are exchanged seamlessly - as if all members of the extended value chain were one entity. It integrates design, planning, legal, development, manufacturing, finance, marketing, and retail activities into a unified process flow and support parallel integration across product development and sourcing.

> Helps to collaboratively manage all product related activities, allowing all stakeholders of the supply chain to be able to see, create, and share true-to-life, virtual representations of all the products at any phase of the product lifecycle.

> Reduces time-to-market and new product costs to improve profitability and grow market share.

> Improves the quality of products, increasing customer satisfaction.

> Allows process control and regulatory compliance.
 

Example of "Dassault Systèmes" proposal with their ENOVIA - PLM Solution

The French technology company Dassault Systèmes recently signed an agreement under which it intends to acquire IBM sales and client support operations encompassing Dassault Systèmes’ Product Lifecycle Management (PLM) software application portfolio, as well as customer contracts and related assets. The two companies have also defined the next steps in their long-standing relationship, and plan to establish Dassault Systèmes as an IBM Global Alliance Partner and expand their services partnership.

From a CIB point of view
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More than ever, banks are being compelled to improve innovation, time-to-market and engineering efficiency in order to meet the exceedingly high expectations of their customers, markets, and investors.
As Corporate and Investment Banking priorities are turned towards business development, sizing their balance sheets, and reducing operational risks, they still lack global industrial methodologies.

In a way, the financial product production process is quite different from the industry process. The main difference is that the production of financial products continues even after the product has been sold, with the publication of a mark-to-market price, cash flows, and so on.

But in another way CIB faces a real design-production-commercialization process with collaboration needs at all levels of the organization:

> Instruments are developed to cater to client needs
> They are created and priced by dedicated teams, and sold by sales team
> Master agreements are defined by legal team
> Instruments are then “produced” ( ie dispatched by the books and backed with underlying assets), which is how they are “produced”
> There is daily re-pricing to report to the client during the entire product life cycle
> Other services may be offered to clients

As they try to reduce the size of their balance sheet, CIBs are looking for new solutions and organization. Everywhere new-product committees have been set up, price policies are integrated into CRM processes, which is starting to modeling customer behaviors. A global product and client-oriented process should enhance this customer-oriented configuration. A holistic view of processes linked with the “product” that is “sold” should also be integrated…

In banking industries, it’s time to move from instrument management to a service factory approach as part of a global product vision. Existing applications don’t have to be changed but rather integrated in order to facilitate workflows and collaboration. This implies a change in culture, a reorganization of processes, and managing change. PLM seems to be the right answer as its vocation is to establish product intelligence with harmonization of information systems •

To see the PLM schema