Expected and Realized Costs and Benefits from Implementing Product Configuration Systems

Product configuration systems (PCS) are a technology well suited for mass customization and support the task of configuring the product to the individual customer’s needs. PCS are at the same time complex software systems that may be tailored to solve a variety of problems for a firm, e.g. supporting the quotation process or validating the structure of a product.

This paper reports findings from a study of 12 Danish firms, which at the time of the study have implemented or are in the process of implementing product configuration systems. 12 costs and 12 benefits are identified in literature, and using radar diagrams as a tool for data collection the relative difference are identified.

While several of the firms are mass customizers it is not the primary driver for implementing PCS. The analysis reveals that expected and realized benefits are consistent: 1) Improved quality in specifications, 2) Using less resources, and 3) Lower turnaround time. Interestingly, the realized benefits are all higher than the expected benefits.

The expected benefits highlight the motivation, and this has implications for human factors as they point in the direction of significant changes to come in the adopting organization. It is observed that product configuration projects are treated as simple technical projects although they should be regarded as organizational change projects.