The Total Economic Impact™ Of Siemens Teamcenter X

Cost Savings And Business Benefits Enabled By Teamcenter X

A Forrester Total Economic Impact Study Commissioned By Siemens, August 2024

Manufacturers face multiple challenges in their business operations, from designing products, managing documentation and compliance information, managing logistics around securing parts. What truly proves taxing is balancing these challenges simultaneously with siloed, nonscalable solutions for information, documentation, process, and project management. Without a flexible, scalable solution not hindered by the inherent limitations of on-premises deployment, organizations often struggle with little to no relief in solving their issues, and costly management and licensing for solutions that don’t solve the root of their problem.

Siemens Teamcenter X is a cloud-based, software-as-a-service (SaaS) deployment of the Siemens Teamcenter Product Lifecycle Management (PLM) solution. Teamcenter X helps customers plan, develop, and deliver innovative products in a scalable and secure cloud platform managed by Siemens.

Siemens commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Teamcenter X.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Teamcenter X on their organizations.

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Return on investment (ROI)

90%90%

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Payback Period

17 months17 months months

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Teamcenter X. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a mature manufacturing organization with a global reach and a revenue of $1 billion.

spends $0 on manufacturing parts and requires 0 FTEs per project in its legacy state. Custom results are based on your inputs and the TEI case study.

Interviewees said that prior to using Teamcenter X, their organizations struggled to manage their product data, compliance documentation, ideation processes, and manufacturing and engineering logistics. Prior attempts to resolve these issues with alternative documentation or PLM systems had limited success and offered only siloed or limited capabilities. These limitations led to additional IT costs as well as maintenance and licenses, without resolving issues around inefficient processes, avoidable spending on parts, and difficulty preparing for audits.

After the investment in Teamcenter X, the interviewees adopted a SaaS-based PLM that is fully managed by Siemens. Key results from the investment include reduced total cost of ownership of any prior on-premises solutions, savings on parts spend through supply chain efficiencies, and accelerated ideation and product development.

Key Findings

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

  • Reduced product development collaboration time by 90% and supply chain costs by 3.5%. Siemens Teamcenter X’s improves visibility into supply chains, enables the ability to work with specialized or complicated industries (e.g., medical device manufacturing), and offers cloud-based visibility and version control into product documentation. These capabilities allow the composite organization to avoid accidentally spending on unnecessary parts, secure less expensive parts by contacting suppliers at the right time, and reduce the need to perform manual version control during product ideation for 50 new projects annually. By Year 3, the composite organization is able to reduce the time its product teams’ spending on product development and version control work by 90%, saving 3.5% on its parts spending for impacted parts of the business. This leads to a risk-adjusted, three-year total PV of $4.9 million in savings.

For , this benefit could be worth over three years.

  • Savings of 90% on replacing legacy solutions. The composite organization’s adoption of Teamcenter X eliminates its now-redundant update, upgrade, maintenance and licensing spending on prior disparate on-premises documentation and project management systems, as Siemens provides full management of Teamcenter X on the cloud. By Year 3, 90% of these costs are eliminated, with all costs prospected to be eliminated as adoption continues into the future. Over the course of three years, this saves a risk-adjusted total PV of $1.3 million.

For , this benefit could be worth over three years.

  • Incremental revenue from faster time to market by 20%. Teamcenter X’s improvements to product development and iteration and avoiding costly or unnecessary parts also reduce the overall time to market for impacted projects. By Year 3, the reduction in manual rework and version control, avoided delays in ordering and reordering parts due to mistakes, and more efficient supply chains enable a 20% improvement in time to market, allowing for improved revenue from additional sales. This is worth a risk-adjusted, three-year total PV of $1.7 million.

For , this benefit could be worth over three years.

  • Savings of 15% on required audit and compliance effort. The composite organization is audited twice a quarter, and the employees involved with these audits are able to save significant time on gathering relevant documentation due to Teamcenter X providing improved visibility and avoiding siloes with its cloud-based structure. This 15% reduction in effort by Year 3 saves the composite organization a risk-adjusted total PV of $624,000.

For , this benefit could be worth over three years.

Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:

  • Improved IP protection. Teamcenter X features the ability to create IP objects and track IP information across all documentation, which keeps their IP secure.
  • Better employee experience (EX). Reduced need for manual rework, reordering parts after errors, and tedious document collection to prepare for audits create a better EX for the composite organization’s team by either severely streamlining or eliminating these tasks.
  • Reduced amount of held inventory. Faster time to market and improved efficiency throughout production enables the composite organization to spend less time and pay fewer inventory holding costs.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • Initial and ongoing implementation effort costs. The composite organization gradually rolls Teamcenter X out across its organization as it adds more use cases and more business units decide to adopt the solution. Twenty business users working at 50% time and two IT users working full time are required for initial implementation. By Year 3, implementation is concluded, requiring only 5% of initial effort from these business users and 25% of initial effort from the IT team. Over three years, this is a total cost of $3.4 million for the composite organization.

For , this cost could be over three years.

  • Subscription fees for the usage of Teamcenter X. Teamcenter X requires an annual subscription fee although there is no ongoing maintenance as that is handled by Siemens. This fee is dependent on the type and complexity of deployment. For the composite organization, the subscription fee reflects a large size and a high complexity use case. Smaller or less complex use cases may incur lower costs. For the composite organization, the subscription costs start at $250,000 per year and rises to $562,500 per year as more features and business units are enabled, totaling a risk-adjusted, three-year total of $1.1 million.

For , this cost could be over three years.

It is important to note that implementation and ongoing costs will vary based on the organization size and number of use cases. To better understand your organization’s potential costs, please contact Siemens.

The representative interviews and financial analysis found that a composite organization experiences benefits of $8.5 million over three years versus costs of $4.5 million, adding up to a net present value (NPV) of $4 million and an ROI of 90%.

could experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.

Maintenance effort and licensing fee reduction due to switching to cloud-based delivery for product lifecycle management (PLM)

90%

“[A SaaS deployment with Siemens] means reduced infrastructure and maintenance costs, as well as greater security, stability, and availability.”

Engineering lead and product manager, electronics

Key Statistics

  • icon icon

    Return on investment (ROI)

    90%90%
  • icon icon

    Benefits PV

    $8.5M$8.5M
  • icon icon

    Net present value (NPV)

    $4M$4M
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    Payback

    17 months17 months
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Benefits (Three-Year)

Reduced product development and supply chain costs Savings on replacing legacy solutions Incremental revenue from faster time-to-market Savings on audit and compliance effort

TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Teamcenter X.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Teamcenter X can have on an organization.

  1. Due Diligence

    Interviewed Siemens stakeholders and Forrester analysts to gather data relative to Teamcenter X.

  2. Interviews

    Interviewed four representatives at organizations using Teamcenter X to obtain data about costs, benefits, and risks.

  3. Composite Organization

    Designed a composite organization based on characteristics of the interviewees’ organizations.

  4. Financial Model Framework

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.

  5. Case Study

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

Disclosures

Readers should be aware of the following:

This study is commissioned by Siemens and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Teamcenter X. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with Teamcenter X based on the inputs provided and any assumptions made. Forrester does not endorse Siemens or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Siemens and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and Siemens make no warranties of any kind.

Siemens reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

Siemens provided the customer names for the interviews but did not participate in the interviews.

Consulting Team:

Sam Sexton

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