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What is the Difference Between ERP and PLM?

Christine Hudson
Christine Hudson

ERP is a system which involves gathering information and tracking a business’s resources throughout a calendar year or cycle. PLM is more focused on the creation and care of one product or product line in specific. The differences between ERP and PLM include how the process is completed—one is primarily software-based and the other may involve a team of people—, what each is used for and how each one is reported to improve business procedures.

Both enterprise resource planning (ERP) and project lifecycle management (PLM) are important ingredients in a company's growth and ability to innovate. ERP and PLM differ in that enterprise resource planning is generally a digital application that manages a company's internal and external resources. ERP looks at finances, tangible assets, staff and inventory. The point of integrating this resource planning program is to ease the flow of vital information into every part of a business's functions and to facilitate its communication with external stakeholders. The ERP app generally runs on one common computer platform which helps organize the use of various vendor products.

Businessman with a briefcase
Businessman with a briefcase

Product lifecycle management contrasts from ERP considerably. While the aim is the same as ERP—to foster innovation—, it is focused on the introduction, implementation and maintenance of one particular business product. PLM takes a company's idea for a new product and oversees the introduction of the concept, the design from first draft through final manufacture on through the sale, and then the use and service of the item. The staff involved in the design and oversight of the product, the data required to create and maintain it, and all the processes that make it happen are part of the PLM.

To exemplify the differences between ERP and PLM, a company may be interested in developing a new tech gadget and may want to use ERP to oversee business communication and growth in general and determine if there might be a need for the new product. ERP would also help the company know whether it had the resources necessary for the creation of the new product. Once the internal ERP determines that there is a need and resources for the creation, PLM’s role would begin.

The PLM process would decide what the gadget should be, what it should look like and do and what is available in inventory to create it. Project lifecycle management can also help decide who could help create the product, how it could be built, and what it might cost. The entire process would keep an eye out for any glitches or other product defaults. Should the new product not produce a positive ROI, project lifecycle management would oversee its removal from the business catalog. Together, ERP and PLM help companies prosper through digital organization of processes.

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