Why PLM 2.0: Change in business

Sorry for the delay between this post and the previous post. A break with a lot of PLM work on my side and no adverts on your side: win-win. But now I have time to continue the serial around PLM 2.0. We are in the middle.

A small recap on the agenda:

In the first post I described the changes in PLM messaging from vendors – PLM 2.0 or similar terms. In the second post I described the current challenges of PLM, which are well known – if you have access to in LinkedIn to the PLM related groups you will find discussions around the challenges of current PLM. And they set the spirit – good or bad.

Now in this post I will bring up some trends, which to my opinion, unmistakably must lead to a new way of PLM in order to adapt to the future.

Generation Y – a new generation of workers

Generation Y: It is interesting to learn that everywhere companies are complaining or warning that their existing workforce is going to retire with all their knowledge without decent follow-up. In parallel they state it is difficult to find new employees with similar skills that will guarantee the future of the company. The new generation of workers, often identified as Generation Y, has different skills and different motivations.

Some interesting generalizations (note I am not a social anthropologist).

The older generations were raised with the concept: Knowledge is Power – You as an individual needed to have in-depth skills to be the right person for a job – a job is your life and for life. As a negative result of this approach, you see that exactly this older generation sometimes ‘sits’ on their knowledge as a kind of job guarantee – they do not like sharing information – “Come to me and I will help you” is their motto till they retire.

Generation Y does not have this job for life attitude – they look more for short term success and fulfillment and therefore they do not fit so well in the way traditional companies work. They are not the type of knowledge workers previous generations had, but they are, thanks to their skills with modern digital media, capable of finding information and combining information into knowledge. They work different.

The interesting observation from my side is that Generation Y is exactly the type of people PLM requires, as it is all about sharing and combining data. What is blocking their acceptance for current PLM is that the implementation is not architected to their work motivation. Look at:

• The way information is stored (too structured),
• The way information is presented (too structured, boring screens).
• The way information has to be entered in the system (too unfriendly – overkill)

For them PLM needs to move more to an intuitive way of presenting information, capturing data as-if it is something like serious gaming. And the new PLM needs to have a way to manage structured and unstructured data combined.

For companies that complain, they are losing skilled workers in the future, they should not complain but adapt. They should look forward and solve the problems for the future, which means a different way of doing business and implementing PLM. Do not choose what the dinosaurs did.

New styles of business management

Here I want to come back to my first post – I was intrigued by reading Steve Denning’s posts and its relation to PLM. Through the post Why Amazon can’t Make a Kindle in the USA, I found the post The Death and Reinvention of Management the best fitting with my PLM drive.
Steve describes five fundamental shifts in management that make companies ready for the 21^st century.

Take time to read the post (and go more in-depth if you get as enthusiastic as me) – but come back to read the rest of this post

I summarize/quote the five shifts from Steve here (as I am sure not everyone has done the reading):

1. The company’s goal has to shift to one of delighting clients i.e. a shift from inside-out (“You take what we make”) to outside-in (“We seek to understand your problems and will surprise you by solving them”)

2. The role of the manager has to shift from being a controller to an enabler, so as to liberate the energies and talents of those doing the work and remove impediments that are getting in the way of work.

3. The mode of coordination shifts from hierarchical bureaucracy to dynamic linking, i.e. to a way of dynamically linking self-driven knowledge work to the shifting requirements of delighting clients.

4. There is a shift from value to values; i.e. a shift from a single-minded focus on economic value and maximizing efficiency to instilling the values that will create innovation and growth for the organization over the long term.

5. Communications shift from command to conversation: i.e. a shift from top-down communications comprising predominantly hierarchical directives to communications made up largely of adult-to-adult conversations that solve problems and generate new insights.

Here we see the typical PLM 2.0 targets. I will translate them into our PLM terminology.

Shift # 1 – The shift to delight clients – from which PLM vendor do we hear this statement? Which PLM vendor puts the customer in focus, instead of their “superior” technology?

Shift #2, #3 and #5 are typical PLM 2.0 capabilities which I described in my first post. See below the PLM 2.0 differentiators:

And where do we find shift #4? How do PLM vendors address this change beyond marketing?

My conclusion on this point: Both PLM and management require a change to be ready for the 21^st century – It is exactly what generation Y is looking for, it is exactly what future consumers are looking for. However currently classical PLM and classical Management are dominating the thought process – and they do not like change so much as it would put past investments and achievements at risk.

The Importance of Social Media

Already described in the two previous trends, social media concepts fit exactly in the shift that we see towards the future. It impacts the way companies change their marketing and address their customer base. In parallel it affects the ways teams collaborate in the product development space, innovation teams are global product development teams.

My thoughts: Social media might look like a hype, but the basic concepts of social media will be required for future PLM

Globalization for SMB

The major trend from the past decade is that SMB’s (Small and Medium Businesses) do not longer serve and fight for a regional existence. Competition and customers come from everywhere and production is more and more outsourced. The traditional company that is #1 in their region does not longer exist. Even SMBs have to consider ways to collaborate globally – again another driver for PLM 2.0

My thought: Traditional SMBs are never the leading companies in new trends, they hang on their core knowledge and have probably a longer way to go to really adapt to the future. Startup SMBs with no historical hindrance are likely to outperform them.

Innovation, Intellectual Property & War on Patents

In a global market, innovation is the key driver to be successful combined with the point above: delight the customer. In order to delight the customer you need to innovate as delightment does not come from commodities.

And with innovation I am not only addressing the consumer market, innovation is required in all areas: green products, green production as world climate and its population forces us to change.

The successful products for the future will be those that are bringing innovation and when your company owns this Intellectual Property, your near future is going to be profitable,

Therefore the “War for Patents” will be everywhere. We currently see in the news the tablet and Smartphone patents wars, but it pops up everywhere, some more visible than others.

A “War for Patents” costs a lot of money (mainly spent to lawyers). Therefore the balance should be found between protecting your IP and to innovate faster. In this way your patents become less relevant because newer exist. To my opinion the new PLM should be the engine for innovation first and secondly the system to protect your IP

Conclusion:

Again too many words for a blog post, but the topic is huge and I hope you see the need for a different PLM (PLM 2.0): A PLM that is targeted to the change in business all around the world. The monetary crisis which is another symptom of the old business gives us a chance to change. We need to change organizations and collaboration to remain profitable in the future – don’t be an ostrich

My thoughts –looking forward to your feedback