Why PLM 2.0 – Conclusions

Time is flying and since I started this sequence on PLM 2.0, four months have passed. Typical end-of-year activities took most of my time. Project deadlines are often tied to Christmas and at the bottom of this post you can see one of my favorite Dilbert cartoons related to deadlines. The advantage for me was that during these four months, I had time to think and discuss various trends with peers.

And then the news you could not miss: Autodesk acknowledged PLM exists and came with their PLM 360 Nexus announcement. Welcome Autodesk in the world called PLM. Too early to make a statement in this post, but an understandable move. The good news: PLM exists even for Autodesk customers.

Now the question is what kind of PLM are we talking about? Is it a PDM variant, PLM 1.0 or PLM 2.0? And this is what I will address in this post – the last one for 2011

A small recap on the agenda:

How good is your memory?

A small summary of the first 3 posts related to PLM 2.0. In 2006, short after the introduction of WEB 2.0, there was the PLM 2.0 announcement of Dassault Systemes and the introduction of new concepts for PLM: online data, communities, IP protection, apps and the starting discussion about cloud based solutions. Parts of these concepts are adapted by all the PLM vendors in their own terminology meanwhile.

The picture on the left (click on it to enlarge it) was a kind of summary what PLM 2.0 could bring. In addition, I referred to Steve Denning‘s post: Why Amazon can’t Make a Kindle in the USA

to illustrate that change is not only happening in the world of PLM. Change in business management is also required. This because people are changing (generation Y), but even more visible at this time: business has become global.

Next I described the classical PLM challenges and implementations, which fit to big enterprises, but are difficult to replicate for mid-market companies. And finally, I came back to the drivers for change in PLM: a new generation of workers, change in management, globalization (and Intellectual Property (IP) protection), all affected by more customer focus and social media.

So now it is time to conclude on all these topics

PLM 2.0

Is PLM 2.0 the next thing in 2012? For sure not! PLM 2.0 concepts are visionary, but far from mature. Where large companies think they have understood PLM 1.0, the mid-market is still in the process of understanding the need for PLM. In addition, the classical PLM vendors have most of their solutions based on old core technology (and new marketing). Therefore I believe it might be the mid-market companies that provide the jump start towards new PLM 2.0 concepts. Follow my thoughts full of generalizations (and comment):

Enterprises that have been investing in PLM

There is a group of enterprises that have started to invest in cPDM or PLM in the early days, ten years ago or more. The majority of these companies are in the automotive, aerospace or discrete manufacturing industries. Their implementation was focused on enabling collaboration between dispersed teams and standardization of processes, bringing efficiency. Often these big companies are a collection of smaller companies that have been going through mergers and acquisitions.

They used the PLM tools to align people and to standardize common processes through the organization. This brought big benefits at that time, but as a side-effect aligning and standardizing people and processes, this is complex change processes for an organization, therefore raising the fear to be ever successful. Although Return-On-Investment (ROI) numbers are in general positive from this implementation, nobody is looking for a new PLM.

A huge investment has been done to structure and classify data with all its complexity. And now, new trends are coming up (PLM 2.0) and the question comes how to embrace this. The management and the thought leaders on the old PLM implementation are probably still in the company and they are reluctant to a big change, based on their previous experience and investment.

So who is going to drive the innovation towards PLM 2.0 capabilities in these companies? Sadly to say, I see in Europe a trend where these companies block this type of innovation. The ERP backbone managing the manufacturing data and the PDM system mainly managing design data is something unlikely to change. Having the data buried somewhere in a system does not mean you can work with it. So the early PLM implementations might in the long term become a disadvantage compared to more modern enterprises.

So here I assume we will not see the frontrunners for PLM 2.0 concepts

Modern enterprises

If you look at enterprises that have been investing in PLM at later stage you will see a different focus. I call them modern because usually this type of industry does not exist as long as the classical industries. Here I think about the high-tech industry and new emerging industries like CPG and apparel, which do not have the classical CAD focus. Their investments in PLM technologies were in different areas. As their products and technology becomes much faster obsolete, the focus is on innovation, being first to market and being customer centric.

The New Product Introduction (NPI) process or Program and Portfolio Management (PPM) are typical PLM practices for these industries and as time-to-market and global manufacturing are key drivers for them, the focus of these implementations was different. They are less focused on capturing all data, but more on assuring efficient capturing and transferring data from work in progress environments to the enterprise environment.

In more modern enterprises you see two levels of product related processes: the work-in-progress area where global collaboration, ad-hoc activities are crucial, often managed by a PDM environment and you have the enterprise level, where the governance and publishing of the product data for production is managed. The enterprise gets their structured and validated data from the work-in-progress environments.

So it is not necessary to have one overall PLM system. This makes the implementation more flexible and it also enables modern PLM concepts to be introduced in an earlier phase, like crowd-sourcing, consumer communities and more. Here the speed of adoption is very much depending on the management of these companies and the way they feel comfortable with these new concepts. But as it is also in their veins due to their products, there is hope they will adopt (or are already using it)

Mid-market companies

The last type of company in this overview is the mid-market company. For me a mid-market company is a company that does not have a company-wide strategic department and a huge IT-environment to support company wide-systems. Mid-market companies have the same challenges as enterprise, they also operate more and more on a global base with design and manufacturing dislocated. However they solve their issues per department one by one. Prioritized where the pain is felt the most. This often leads to a seemingly fragmented approach, but it does not push for a big change in working methodology company-wide. Less change management to do for the management. Excel as a common interface, or sometimes the magic word XML and all is connected.

Still not efficient using the concept of sharing product data through the whole product lifecycle. And here I see the opportunity for PLM 2.0 concepts to be implemented much faster. Mid-market companies exist and flourish due to their flexibility. Concepts like communities, cloud based collaboration tools are much easier to implement for them, once the company endorses them. One department starts and without a big IT-investment another department can join the cloud based solution. Sharing data (a must for PLM) becomes a logical choice as it is the next tool available. And I believe Autodesk is aiming at that direction and others (existing and new comers) might come in from here – online solutions that connect the enterprise data in a clever manner (don’t forget search based applications – see for an interesting discussion: Tech-Clarity and the related LinkedIn discussion.

My conclusions:

PLM 2.0 is a vision for the upcoming 10 years or perhaps more and probably the ones that benefit the most in the first step are the ones that came last in PLM adoption: mid-market companies. The classical enterprises will have a challenge to let go their old PLM 1.0 thoughts and adapt themselves (and the management) to think 2.0. In parallel old PLM 1.0 is based on the old management principles where PLM 2.0 requires a new type of management also (more likely to appear in new companies – mid-market or modern ???)

No predictions this year for 2012, only good intentions:

• Shorter blog posts, in a little higher frequency when time allows
• More on Asset Lifecycle Management / Owner – Operators concepts based on PLM
• An appealing presentation about Making the case for PLM at PLM Innovation 2012
• More successful customers benefitting from PLM….