In recent years, I have assisted several companies in defining their PLM strategy. The good news is that these companies are talking first about a PLM strategy and not immediately about a PLM system selection.

In addition, a PLM strategy should not be defined in isolation but rather as an integral part of a broader business strategy. One of my favorite one-liners is:

“Are we implementing the past, or are we implementing the future?”

When companies implement the past, it feels like they modernize their current ways of working with new technology and capabilities. The new environment is more straightforward to explain to everybody in the company, and even the topic of migration can be addressed as migration might be manageable.

Note: Migration should always be considered – the elephant in the room.

I wrote about Migration Migraine in two posts earlier this year, one describing the basics and the second describing the lessons learned and the path to a digital future.

Implementing PLM now should be part of your business strategy.

Threats coming from different types of competitors, necessary sustainability-related regulations (e.g., CSRD reporting), and, on the positive side, new opportunities are coming (e.g., Product as a Service), all requiring your company to be adaptable to changes in products, services and even business models.

Suppose your company wants to benefit from concepts like the Digital Twin and AI. In that case, it needs a data-driven infrastructure—

Digital Twins do not run on documents, and algorithms need reliable data.

Digital Transformation in the PLM domain means combining Coordinated and Connected working methods. In other words, you need to build an infrastructure based on Systems of Record and Systems of Engagement. Followers of my blog should be familiar with these terms.

 

PLM is not an R&D and Engineering solution
(any more)

One of the biggest misconceptions still made is that PLM is implemented by a single system mainly used by R&D and Engineering. These disciplines are considered the traditional creators of product data—a logical assumption at the time when PLM was more of a silo, Managing Projects with CAD and BOM data.

However, this misconception frames many discussions towards discussions about what is the best system for my discipline, more or less strengthening the silos in an organization. Being able to break the silos is one of the technical capabilities digitization brings.

Business and IT architecture are closely related. Perhaps you have heard about Conway’s law (from 1967):

 

“Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure.”

This means that if you plan to implement or improve a PLM infrastructure without considering an organizational change, you will be locked again into your traditional ways of working – the coordinated approach, which is reflected on the left side of the image (click on it to enlarge it).

An organizational change impacts middle management, a significant category we often neglect. There is the C-level vision and the voice of the end user. Middle management has to connect them and still feel their jobs are not at risk. I wrote about it some years ago: The Middle Management Dilemma.

 

How do we adapt the business?

The biggest challenge of a business transformation is that it starts with the WHY and should be understood and supported at all organizational levels.

If there is no clear vision for change but a continuous push to be more efficient, your company is at risk!

For over 60 years, companies have been used to working in a coordinated approach, from paper-based to electronic deliverables.

  • How do you motivate your organization to move in a relatively unknown direction?
  • Who in your organization are the people who can build a digital vision and Strategy?

These two questions are fundamental, and you cannot outsource ownership of it.

People in the transformation teams need to be digitally skilled (not geeks), communicators (storytellers), and, very importantly, connected to the business.

Often, the candidates come from the existing business units where they have proven skills. The challenging part is educating them and making them available for this mission.

Digital transformation is not a side job.

Education can come from the outside world. Making people available to work on the new digital infrastructure is a management decision and their sense of priority.

 

How to get external support?

If you are connected to the PLM world like me, a lot of information is available. In academic papers, projects and in particular on LinkedIn currently, there is an overflow of architectural debates:

Recently, I participated in the discussions below:

 

The challenge with these articles is that they are for insiders and far from shareable with business people. There is always a discussion, as we are all learning to match theory with reality. For example,Prof. Dr. Jörg W. Fischer introduced the Information Architecture as a missing link. You can read his recent post here and the quote below to get interested:

All of these methods focus either on Data Architecture or Business Architecture. And the blind spot? I am convinced that an essential layer between the two is missing. We at STZ-RIM Reshape Information Management call this Information Architecture.

Still, we remain in the expert domain, which a limited group of people understands. We need to connect to the business. Where can we find more education from the business side?

The reaction below in one of the discussions says it all, in my opinion:

 

Starting from the business

What I have learned from my discussions with the management is:

  • Don’t mention PLM – you will be cornered in the R&D / Engineering frame.
  • Don’t explain their problems, and tell them that you have the solution (on PowerPoint)
  • Create curiosity about topics that are relevant to the business – What if …?
  • Use storytelling to imagine a future state – Spare the details.
  • Build trust and confidence that you are not selling a product. Let the company discover their needs as it is their transformation.

The diagram below, presented by Yousef Hooshmand during the PLM Roadmap/PDT Europe 2023 conference in Paris, describes it all:

It will be a continuous iterative process where, starting from business values and objectives, an implementation step is analyzed, how it fits in the PLM landscape and ultimately, how measures and actions guide the implementation of the tools and technology.

It is important to stress that this is not the guidance for a system implementation; it is the guidance for a digital transformation journey. Therefore, the message in the middle of the image is: Long-term Executive Commitment!

 

In addition, I want to point to articles and blogs written by Jan Bosch. Jan is an Executive, professor and consultant with more than 20 years of experience in large-scale software R&D management and business.

Although our worlds do not intersect yet, the management of mechanical products and software is different; his principles fit better and better with a modern data-driven organization. Often, I feel we are fighting the same battle to coach companies in their business transformation.

In the context of this article, I recommend reviewing the BAPO model coming from the software world.

BAPO stands for Business, Architecture, Process and Organization. As the diagram below indicates, you should start from the business, defining the needs for the architecture and then the preferred ways of working. Finally, the organization has to be established in accordance with the processes.

Often, companies use the OPAB approach, which makes them feel more comfortable (Conway’s Law). For further reading in this context, I recommend the following posts from Jan Bosch:

 

Business and technology

I want to conclude by discussing ways to connect business and technology as you need both.

First, I want to point to an example that we presented in the Federated PLM interest group on LinkedIn. Although the discussion initially focused on technical capabilities, we concluded by connecting them to business transformational needs. The diagram below is our characteristic image used to explain the interaction between Systems of Record (the vertical pillars) and the Systems of Engagement (the horizontal bars – modularity).

Have a look at the business discussion below:

 

Next, the diagram below comes from a 2017 McKinsey whitepaper: Toward an integrated technology operating model. Here, the authors describe how a company can move toward an integrated technology operating model using both coordinated and connected technologies.

They do not mention PLM; they have a business focus, and it is important to mention a company can work in different modes. This is an organizational choice, but don’t let people work in two modes,

 

Conclusion

With this post, I hope I moved the focus from technology and tools to an understandable business focus. Even within my 1500 words, there is much more to say, and this makes our (PLM) mission so complex and interesting. Let me know where you can connect.