How Legacy PLM Systems Limit Scaling, Compliance, and Innovation
Inside This Article
What Roles Does PLM Play in Modern Product Development?
Product lifecycle management (PLM), an engineering-centric software that emerged during the 1980s-1990s, is considered by today’s standards an indispensable solution across product development teams. PLM plays a central role in modern product development by acting as the digital backbone that helps manage a product’s information, processes, and decisions from initial concept to end of life.
Why Legacy Systems Struggle in Modern Product Development
Despite its foundational role, many PLM systems were designed for a very different era. Today’s fast-moving technologies, regulatory complexity, global teams, and competitive pressures have caused some companies to outgrow their PLM platforms or abandon them entirely. Too often, spreadsheets and manual processes step in to fill the gap, signaling a clear need for modernization.
How Are Modern Cloud-Native PLM Platforms Changing Product Development?
This gap between legacy systems and modern business demands has given rise to a new generation of PLM solutions. Today’s modern PLM platforms are intelligent, cloud-native, and digitally connected, enabling organizations to manage the entire product lifecycle with far greater control and agility. Advanced product development, bill of materials (BOM) management, streamlined change processes, and real-time collaboration across internal teams and external partners replace manual workarounds with a unified, scalable foundation.
Here are seven important reasons you’ve outgrown your PLM system and how it impacts your company’s bottom line
The latest stats indicate that approximately 72% of the top 500 manufacturing companies have implemented PLM solutions to streamline product development processes. The market spans more than 80 countries, with North America, Europe, and Asia-Pacific being the major hubs for adoption.1
Even with strong adoption across regions and industries, legacy PLM systems have left some organizations unable to keep pace. As a result, a growing number of companies have disengaged from PLM, driven by a range of evolving business and technology challenges that include:
1. Low User Adoption and Workarounds
Cause:
- Team complaints range from the system not being intuitive to using PLM requires extensive training or feels like extra work
- System complexity leads to continued widespread usage of spreadsheets, emails, and shared drives instead of PLM usage
- Poor integration with other systems such as enterprise resource planning (ERP), computer-aided design (CAD), and other software solutions. Without strong integration, PLM may disrupt rather than streamline operations, causing delays, rework, and reduced visibility across the product lifecycle
- Other issues contribute to low adoption like bad planning, scope creep, or misalignment with real user needs instead of a productivity boost
Impact on the Company:
- PLM stays idle due to complexity and poor user experience, consequently poor return on investment (ROI)
- Creates fragmented information and loss of process control
- Missed innovation, poor change management, lack of an audit trail, and more
- Multiple issues arise such as reliance on paper processes, siloed information, lack of collaboration, inability to scale effectively, no single source of truth, and more
2. Disconnected Systems and Information Silos
Cause:
- Disconnected systems create information silos that lead to inconsistent data, costly rework, and delayed product launches
- Teams waste time reconciling conflicting records and searching for information
- Information silos undermine the single source of truth for product data
Impact on the Company:
- Delays, errors, and increased operational costs
- Information quality issues, excessive customization that leads to high maintenance costs, and a system that stalls whenever a vendor releases a new update
- Loss of agility and visibility leads to an inability to respond to market changes
3. Complexity and High Maintenance Costs
Cause:
- Legacy or on-premises PLM requires extensive customization, coding, and IT support
- Implementation timelines stretch out, costs balloon, and teams lose momentum
- Understaffed IT departments struggle to maintain complicated systems
Impact on the Company:
- PLM system becomes a bottleneck. Projects slow down and product-release targets are missed
- A legacy PLM increases system complexity and maintenance costs, draining IT resources while delivering little business value
- Complexity impacts efficiency such as performance and IT overhead
4. Increased Compliance and Audit Risks
Cause:
- Legacy PLM and quality management system (QMS) software can quietly drag down an organization in several interconnected ways:
- Quality records aren’t automatically linked to requirements, designs, BOMs, or changes
- End-to-end traceability is incomplete or manual
- Updates are re-entered manually across systems, increasing errors
- The result is higher risk of noncompliance, recalls, and penalties
- Quality teams lack visibility into product changes
- Complete reliance on manual processes
Impact on the Company:
- Audit failures, recalls, and reputational damage to the company brand
- Additional costs for specialized software (non-PLM), governance, risk and compliance (GRC), or a quality management system (QMS). These solutions often do not integrate well with legacy PLM systems
- Additional costs to company in organizing a dedicated team to manage and monitor regulatory adherence, documentation, and data integrity
- Documentation is scattered, difficult to track, creating significant risks, outdated information, missed regulations, and more
5. Rising Costs and Diminishing ROI
Cause:
- Ongoing maintenance, upgrades, and support for legacy systems start becoming expensive
- Failed implementations ripple across engineering, procurement, and supply chain
- The PLM becomes a static repository, not a dynamic solution, failing to deliver on its promise of cost reduction and revenue growth
Impact on the Company:
- Higher total cost of ownership and reduced ROI
- Inefficient change management and siloed information lead to production errors and higher rework and scrap
- Even with system maintenance or upgrades, legacy PLM systems cannot keep pace with agile development. In addition, companies can miss market opportunities, experience continuous delays, poor quality, and more
6. Inability to Scale or Support Growth
Cause:
- The system cannot accommodate new users, products, or increased data complexity
- Scaling requires additional IT support and infrastructure in addition to re-customization
- Rigid data models impede business evolution
Impact on the Company:
- Limits business growth and agility
- Slow performance, processes that should be automated rely on manual input
- Hinders expansion into new markets or product lines
7. Barriers to Change and Innovation
Cause:
- Legacy systems are rigid, making it hard to adopt new technologies or processes
- A reliance on using outdated technology, slows digital transformation
- A high percentage of information is still being entered manually into multiple systems, increasing human error and creating fragmented truths instead of a single source of truth
Impact on the Company:
- Stagnation and loss of competitive edge
- Teams resist process improvements due to PLM constraints
- PLM becomes a disconnected system that cannot integrate with modern CAD, ERP, customer relationship management (CRM), or manufacturing execution system (MES)
Cloud PLM Is a Strategic Imperative, Not an IT Upgrade
A PLM system should be an enabler of speed, accuracy, collaboration, and innovation, not a bottleneck. If your organization is experiencing low adoption, rising costs, disconnected data, or an inability to scale, these are clear indicators that your PLM software has fallen behind your business needs. Modernizing PLM is not just an IT upgrade; it is a strategic move to restore a single source of truth, improve internal and external collaboration, and remain competitive in an increasingly complex product landscape.
Discover how Arena’s cloud-native PLM solution can help you innovate, stay competitive, and manage your product lifecycle, from concept to end of life.
Sources
Joseph Prock