As a consultant working with mid-market companies, I enjoyed reading this post from Al Dean and its related comments and posts. Although I must say Al’s statement:
PLM+ are looking to solve this by creating a rich application that engages the user, provides ease of implementation and ongoing maintenance (by allowing the user/admin, rather than costly consultant) and can be delivered over the web, in an on-demand manner (which saves hardware and infrastructure cost)
was a trigger to react, as I am a consultant.
The base of every PDM/PLM
First I believe the base of PLM and PDM is to agree inside your company that you share and centralize product data. This means not only files, but also Bill of Materials, Issues, etc, etc, ..
To share and centralize product data seems like an easy mission and this is what all PLM software as a base provides, and I assume PLM+ does the same, only they store the data in the cloud, like Arena.
Sharing data is not a natural process in all companies as there is always the culture to share the minimum and to keep the rest to prove your own value – the bigger the company the more this will happen. This is human nature and this differs case by case. To make people share data is an area where either the management has to push, or in very small companies, a power user. In larger companies, often an external consultant is doing this job, in the role of an ‘outsider’ who can moderate and explain the benefits for all, instead of the threats.
This is what consultants really do; they do not install or administer systems.
PLM solutions can vary in the way they make sharing of data available. Some solutions are very rigid in what they offer as data model, but most of the necessary entities and attributes are there. They are based on best practices and target the 80 %. Often this is good enough, if the customer has no alternative and has the power by themselves to enforce the system as their platform for sharing data.
More flexible PLM solutions have an advantage and in the same time this is their disadvantage. They can be extended beyond the 80 % scenario and both the implementer and the customer will be challenged to reach the 100 % satisfaction. However we all know from the 80-20 rule, this is where it gets complicated.
80 % of the project is done in 20 % of the time, or in other words: you spent 80 % of your time (and budget) on reaching the last 20 %
Once having reached a common platform for sharing all product related information, for me the real PLM is starting. This is where a company would implement processes, that streamline the product development or delivery process – it requires a cross departmental change.
And at this stage, it is often where a consultant comes in. It is very rare, that in mid-market companies, management reserves time and resources to come with a strategic plan to implement PLM – I wrote about this in an older post. PLM requires a change in the way the company currently works.
So I am curious to learn how PLM+ and other On-Demand PLM software companies will try to address this step, as change is needed and someone has to push for it.
In my last three consecutive posts, I wrote about who decides on PLM in mid-market companies (a generalization from 15 years experience). There I claim that the selection for a PLM system is subjective, very much based on personal relations with the mid-market company. Again how PLM+ will address this in their business model, as there is a need for someone to push.
Open Source PLM software has somehow similar challenges. You need the drive from inside the customer to agree on sharing product data and next to extend. This is where the traditional PDM and PLM vendors push their business in direct contacts. Of course Open Source PLM providers have their focus on after the initial installation of the platform to extend it with a consultative and service model.
Conclusion: As every PLM provider at the end needs revenue for a living, I am looking forward to see where On-Demand PLM will go and finds it place. What will be business model that makes people buy and create the change
Jos Voskuil's Weblog 
5 comments
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November 16, 2009 at 5:21 pm
Benny Shaviv, PLMplus
Jos,
First of all – great to hear from you, been a long time since we spoke.
Per your post, allow me to begin with a fact of life: “In theory, theory and practice are the same. In practice, they’re quite different”.
In theory, consultants do what you said in your blog. In practice, they spend time on installing & implementing systems, writing scripts, debugging, training customers, answering customer support calls, and so on. There is very little room & budget left for strategic consulting – which is where the value is BOTH for the customer and the consultant. In practice, the customer has to have a PLM strategy, otherwise they can’t even get started.
This is exactly what we want to change. As a consultant you should be focusing on the strategic side of consulting, which will give customers the most value and you the most revenue with the least amount of headaches.
I’ll use the example of our CRM – we never had a CRM strategy, but we have a CRM. It was a no-brainer decision. And we had a consultant advise us on it, and is still advising us on it – but on the strategic “best way to run your business scenario” side, not on installation, implementation, project planning, and training. Much higher value for us, much more profitable for the consultant.
Its time for PLM to become a mainstream, no-brainer decision.
Benny hi, thanks for your response and I feel where you want to push us too. I think we agree on the fact that consultants should assist in a strategic direction (help the company to agree and work on a common PLM approach). I think you generalize too much when you compare consultants with application engineers (and perhaps in mid-market companies the same person tries to play both roles).
I agree there is a conflict for the implementer. From one side selling services (training/installing/customization) is easier to grasp and sell as compared to consultancy services, where not every customer is ready for – to understand the value and the need.
Especially in the mid-market my experience is that companies do not necessary work from a PLM strategy – they experience pains and want to resolve them. Here the role of a consultant is often needed to translate these individual pain and needs into a coherent strategy.
I do not believe you can compare CRM with PLM and say it is a no-brainer. I would assume before PLM is a no-brainer that ERP would come first. ERP systems came on the market 15 years before PLM, how many ERP on demand solutions do exist /
As you can see from Steve’s comment there are companies looking for PLM services on-demand. I am curious to learn how this decision process took place and will take place. At the end in my last years post “PLM in 2050” I wrote about the fact that even PLM as a discipline might not longer exist – curious to see what will happen till 2050
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November 16, 2009 at 6:27 pm
Steve Kreckman
Jos,
As a recent adopter of Arena I thought I would add my comments about what led our company to go with an on-demand system instead of the other options. The short list: Reasonable cost, Ease of implementation, Rich feature set, and Security
I’ll explain those items in more detail but just a bit of background on our company. We are a smaller operating unit (20+) people of a much larger parent company (6000). Our parent company dictated the use of SAP for MRP/ERP and spent a small fortune on customizing the installation for our group. They did not however implement SAP’s document control module. It was up to me to survey all the PLM solutions from open source to complete custom products. Here’s why on-demand PLM made sense for us…
Cost per seat is reasonable, well under $1K-2K depending on level of access per user. no strict licensing schemes, they actually encourage you to add users as you see fit and will adjust billing at a later date. Suppliers and partners also have free access within reason.
Cost of implementation is important but often overlooked. Based on our experience, SAP requires customization for every installation and that usually involves some VERY expensive consultants and a large amount of billable hours. Arena charged a small one time fee for complete customization including ALL data importation, training, and support to go live and a dedicated coordinator to do all the work. Also there is no IT infrastructure required. No SQL servers, no backups, etc that we have to manage.
Their feature was also found to be quite extensive and handles every single task typically found in PLM software with added integrations into common CAD packages such as SolidWorks and Altium that we use. Some packages that I looked at had all these functions but they were very poorly integrated.
Security is also a prime concern as we are effectively giving the crown jewels of our company to a third party to care for. The staff of Arena have an extensive background in providing financial grade security of network services. I would accept nothing less than this from a vendor of on-demand PLM whoever they are.
In short, the field of vendors of PLM solutions is quite broad ranging from simple MS Access addons to full blown custom solutions. We found that On-demand PLM was somewhere in the middle of these offerings. It provided us with a very high quality product not usually found at this price and was well suited for a small to medium size operation such as ours.
Steve
Thanks Steve for giving us a good insight for what are the decision factors for choosing an on-demand solution. My main question from the consultancy point of view is: Who decided that there was a need for a PLM system and who motivated everyone to use arena (the plm system) as the version of the truth ? Aligning all departments or at least the major engineering and shop floor activities need to be done I assume – who took this responsibility in your company ?
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November 17, 2009 at 12:45 pm
Steve Kreckman
Jos,
You were curious about how the need for PLM was identified and how the decision was made so here goes….I’m a hardware engineer with over 25 years experience taking a very diverse group of products from concept to production. Any time that I have taken a product to production, the need for PLM and document control has proven to be invaluable so I was the one pushing for this product. Our parent company had already implemented SAP for our group for MRP functions but PLM was neglected.
Unfortunately, the guys writing the checks did not have this background so it was an uphill battle to get PLM. We literally had to stumble a couple times (missed deliveries due to poor revision control) for the need for PLM to become apparent to management. Those missed deadlines and cost overruns were the ‘Ah-ha’ moment that made them realize what PLM could do for our company. Once they realized that, it was only a couple weeks before we had selected Arena and began implementation.
You are not alone in realizing that selling PLM to the uninitiated is a difficult task. Arena has realized this and recently come up with a lot of practical materials for helping to sell PLM to people from various backgrounds. Look at the ‘Problems Solved’ tab on their website for a list of all their arguments. I have used some of them in my pitches. A lot of their arguments are not just specific to Arena but could be used to help justify any PLM system to a wider audience.
Cheers,
Steve
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November 17, 2009 at 12:54 pm
Steve Kreckman
I realize the last post was a bit long but so to directly answer your original question: The head of engineering (me) drove the use of PLM (Arena) with the support of management and some input from manufacturing (we use a contract manufacturer).
As a consultant, I would pitch PLM to engineering and production management first as a way to solve their inevitable problems surrounding revision control and documentation management. They will understand and help pitch it to management.
Steve
Thanks Steve for you optimal contribution – all clear to me
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November 28, 2009 at 6:58 pm
Tom Gill
Steve, it sounds like you have a well thought out implementation.
The only comment I would make is it is also important to engage the IT function in the process as well. Whether the hosted or not, PLM needs to integrate with internal infrastructure as well as applications. IT is the keeper of the keys and it is easier if everyone is on the same team.
Tom
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