I am writing this post as i come across this question on a regular base, and as a response on a recent post from Jim Brown. I addressed this topic already in previous posts in the past, for your convenience i have put all relevant links I considered at the bottom of this post.
I believe the question is hard to answers if asked this way. It all depends on where is your point of gravity. You can divide the PLM providers in different groups.
- PLM vendors with a focus pure on PLM – their major business is in providing the majority of the PLM related tasks, independent of a certain CAD or ERP package, but interfaces usually through a generic approach with these applications. Matrix One (now integrated in Dassault’s ENOVIA offering), Aras (Open Source), Arena (On-line) are examples of this type of PLM providers.
- PLM vendors coming from their CAD environment, initially manage their 3D CAD data and extending these capabilities to other authoring tools. ENOVIA VPLM and SmarTeam (main CAD system managed CATIA) are Dassault’s solutions, Siemens UGS (main CAD system managed NX) and PTC (main CAD system managed Pro/E) are examples of this type of providers
- ERP vendors who extended their offering with PLM functionality – either by developing PLM functionality themselves (SAP) or by acquisitions of PLM functionality (Oracle / BaaN)
- and there is still a vendor that does not do PLM, but calls it digital prototyping
As each of these PLM providers has their customers and market share – interesting to read is CIMDATA’s overview of the PLM market. What you see there is that it is hard for the independent PLM vendors to be ranked in the top 5. Also the biggest independent PLM vendor in the past, Matrix One, had a hard time to compete against the CAD or ERP based vendors. Why ??
I believe because the major reason lies in the fact that companies want to keep their IT-infrastructure as simple as possible. Buying a PLM system from the current major CAD vendor or from the current major ERP vendor keeps their situation manageable. Why deal with a third vendor that has to integrate with their CAD and ERP software ?
This would lead to a statement that there are only two type of major PLM providers: CAD based or ERP based. And here I am back to the initial question: Can ERP vendors provide PLM ?
Here I believe there is a major difference in the approach of PLM. Yes, both types of companies can provide PLM functionality but they offer it in a different way. It is like Ferrari and Volkswagen provide cars, but are they addressing the same audience ?
Some years ago I had a conversation with a SAP country manager about PLM. It was in the time that SAP did not recognize PLM yet as a business approach required in addition to ERP. He told me that SAP was managing all the company’s data and processes and that it was just a matter of time before also companies would recognize that engineers working with their CAD systems are nothing else but resources in the whole process. “Designers believe they are artists and cannot be managed but we will show them we can” . Here you see the focus is not on creating the environment for innovation or new products, but on managing existing processes as efficient in a certain way.
To generalize ERP vendors talk PLM but practice efficiency and neglect the fact that innovation and creativity are not manageable (sorry for the generalization but it make things more clear)
CAD based PLM vendors focus a lot on the product creation process. Supporting companies to design and develop new products, mainly in the virtual world. They do not try to manage the development process like a production process but work with mile stones to assure progress and managing quality and risk (NPI – new product introduction). Only when the product definition is mature and complete it will be handed over to ERP to produce the products where needed. Did you ever wonder why CAD based PLM vendors do not expand into ERP ?
And here lies the the difference I believe. If you choose for a CAD based PLM vendor, your company is focusing on innovation, creating new products, when you choose for an ERP based PLM system you will focus on efficiency and process management. Ask the ERP vendor to which level PLM is integrated in their company – is there a person responsible for PLM in the top management ? Technically you can integrate a full portfolio of products, but understanding and making PLM a part of the strategy is the decisive question for the future.
Yes, ERP vendors can provide PLM functionality and as a company you should decide where is your business focus.
If your focus on efficiency and not on innovation ERP providers can offer a total solution.
If your company focuses on new and better products, I believe that your focus should be on CAD based PLM vendors as they offer the best environment for innovation support and capturing design knowledge.
And be critical – as before you know the front falls off
PLM and ERP previous posts: