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First of all happy new year to all of you. As there is no “End of the World” risk anymore in the near future , we can start looking forward and set our goals for the next 5 years or is it a 7-years plan Oleg ?.
Christmas, the moment the light returns on the Northern hemisphere, plus the food , cycling and the preparations for the next Product Innovation conference in Berlin were the drivers for this blog post.
The title might give you the impression that it is an IQ-quiz: “Which word does not fit in this sequence”? Well, It’s not, they are all related. Let’s put them in a chronological order.
Frogs
Frogs existed first, and were exploring the world before us humans. Paleontologists assume they had no notion of what was global. In their world it was probably a few ponds in size. For certain, they did not have anything to do with innovation. At that time, survival depended on the slow process of evolution.
Millions of years later, the first Homos appeared on the earth surface; Homo Sapiens, Homo Erectus, Homo Ludens and perhaps more. They all had something in common: Instead of waiting for the evolution which was ongoing, they started in parallel to innovate. First by walking upright, using a more advanced language to communicate and learning to have tools to achieve more. Their world was still within a reasonable walking distance and probably they started to eat frogs.
Human evolution
This evolution continued for thousands of years. Human beings started to spread around the world and in waves they brought innovation. They built stone temples, learned to sail, discovered gunpowder, electricity, the universe, the internet and more. It is interesting to see that every time a major innovation was born, these innovators enriched their region in wealth and culture, using their innovation as a competitive advantage to dominate their neighbors.
In many cases 1000 years later, this innovation became a commodity and other civilizations stood up with their innovation and dominated their regional environment which became bigger and bigger in size. Where possible they made use of the cheap resources (modern word for what was initially called slaves) to enrich their civilization. For certain, the most civilized were eating frogs!
Market expansion – innovation pace
During the last century, the pace of innovation went faster and faster. New ways of communication and transportation became available and affordable, which made it impossible for innovations to stay within a specific civilization. Innovation became available for everyone around the world and the domination shifted towards companies and markets.
Companies with a strategy to innovate, discovered that there were new ways needed to respond faster than before to market opportunities. This was the driving force behind PDM, as an first attempt to get a better grip and understanding of their fast evolving, more complex products, that require more and more global collaboration between design teams.
PDM is now accepted as critical by all manufacturing companies around the world, to guarantee quality and efficiency. Customer focus became the next demand from the market and interestingly enough, the demand for frogs decreased.
However this wave of innovation was followed by a wave with even greater impact on the global society. New technologies, the availability of internet and social media, suddenly changed society. Combined with the financial crisis in the US and Europe, it became clear that the way we worked in the past is no longer the way to survive in the future.
Faster and global
PLM was introduced early this century as a new strategy to become more customer-centric, being able to respond faster and better to market demands by bringing innovation to the market before the competition. PLM requires a different approach by companies to work internally and interact with the (global) outside world. The need to implement the PLM vision requires change and as it cannot be considered as an evolutionary process over several generations, it will be a business change. However, in general, human beings do not like rapid change. Here the frogs come back into the picture, now as the boiling frog metaphor.
It is based on 19th century anecdote describing a frog slowly being boiled alive. The premise is that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death. The story is often used as a metaphor for the inability of people to react to significant changes that occur gradually. This metaphor is very applicable for the classical approach companies bring their products to the market, where innovation is more a lucky coincidence than a result of a strategy.
Here it all comes together again.
Innovation is the only way for companies to avoid becoming a commodity – not able to differentiate for your potential customers. Now the title of this post should be clear: “Do not be a boiling frog, use PLM to support your innovation and become available for the global market”
As the new year has started and it is still time to extend your good intentions, add Innovation, PLM and Change to your survival list.
I look forward to your comments and hope to discuss with you the relation between PLM and Innovation during the upcoming Product Innovation event in Berlin, where I present a session with the title: “PLM loves Innovation ?”
(when you know me, you know the answer, but there are always surprises)
Related articles
- Are we as dumb as “Slowly Boiling Brainless Frogs”? (1) (blogs.redding.com)
“Confused? You won’t be after this episode of Soap. “
Who does not remember this tagline from the first official Soap series starting in 1977 and released in the Netherlands in 1979?
Every week the Campbells and the Tates entertained us with all the ingredients of a real soap: murder, infidelity, aliens’ abduction, criminality, homosexuality and more.
The episode always ended with a set of questions, leaving you for a week in suspense , hoping the next episode would give you the answers.
For those who do not remember the series or those who never saw it because they were too young, this was the mother of all Soaps.
What has it to do with PLM?
Soap has to do with strange people that do weird things (I do not want to be more specific). Recently I noticed that this is happening even in the PLM blogger’s world. Two of my favorite blogs demonstrated something of this weird behavior.
First Steve Ammann in his Zero Wait-State blog post: A PLM junkie at sea point-solutions versus comprehensive mentioned sailing from Ventura CA to Cabo San Lucas, Mexico on a 35 foot sailboat and started thinking about PLM during his night shift. My favorite quote:
Besides dealing with a couple of visits from Mexican coast guard patrol boats hunting for suspected drug runners, I had time alone to think about my work in the PLM industry and specifically how people make decisions about what type of software system or systems they choose for managing product development information. Yes only a PLM “junkie” would think about PLM on a sailing trip and maybe this is why the Mexican coast guard was suspicious.
Second Oleg in his doomsday blog post: The End of PLM Communism, was thinking about PLM all the weekend. My favorite quote:
I’ve been thinking about PLM implementations over the weekend and some perspective on PLM concepts. In addition to that, I had some healthy debates over the weekend with my friends online about ideas of centralization and decentralization. All together made me think about potential roots and future paths in PLM projects.
It demonstrates the best thinking is done during out-of-office time and on casual locations. Knowing this from my long cycling tours in the weekend, I know it is true.
I must confess that I have PLM thoughts during cycling.
Perhaps the best thinking happens outside an office?
I leave the follow up on this observation to my favorite Dutch psychologist Diederik Stapel, who apparently is out of office too.
Now back to serious PLM
Both posts touch the topic of a single comprehensive solution versus best-of-breed solutions. Steve is very clear in his post. He believes that in the long term a single comprehensive solution serves companies better, although user performance (usability) is still an issue to consider. He provides guidance in making the decision for either a point solution or an integrated solution.
And I am aligned with what Steve is proposing.
Oleg is coming from a different background and in his current position he believes more in a distributed or network approach. He looks at PLM vendors/implementations and their centralized approach through the eyes of someone who knows the former Soviet Union way of thinking: “Centralize and control”.
The association with communism which was probably not the best choice when you read the comments. This association makes you think as the former Soviet Union does not exist anymore, what about former PLM implementations and the future? According to Oleg PLM implementations should be more focused on distributed systems (on the cloud ?), working and interacting together connecting data and processes.
And I am aligned with what Oleg is proposing.
Confused? You want be after reading my recent experience.
I have been involved in the discussion around the best possible solution for an EPC contractor (Engineering Procurement Construction) in the Oil & Gas industry. The characteristic of their business is different from standard manufacturing companies. EPC contractors provide services for an owner/operator of a plant and they are selected because of their knowledge, their price, their price, their price, quality and time to deliver.
This means an EPC contractor is focusing on execution, making sure they have the best tools for each discipline and this is the way they are organized and used to work. The downside of this approach is everyone is working on its own island and there is no knowledge capitalization or sharing of information. The result each solution is unique, which brings a higher risk for errors and fixes required during construction. And the knowledge is in the head of experience people ….. and they retire at a certain moment.
So this EPC contractor wanted to build an integrated system, where all disciplines are connected and sharing information where relevant. In the Oil & Gas industry, ISO15926 is the standard. This standard is relative mature to serve as the neutral exchange standard of information between disciplines. The ideal world for best in class tools communicating with each other, or not ?
Imagine there are 6 discipline tools, an engineering environment optimized for plant engineering, a project management environment, an execution environment connecting suppliers and materials, a delivery environment assuring the content of a project is delivered in the right stages and finally a knowledge environment, capitalizing lessons learned, standards and best practices.
This results in 6 tools and 12 interfaces to a common service bus connecting these tools. 12 interfaces as information needs to be send and received from the service bus per application. Each tools will have redundant data for its own execution.
What happens if a PLM provider could offer three of these tools on a common platform? This would result into 4 tools to install and only 8 interfaces. The functionality in the common PLM system does not require data redundancy but shares common information and therefore will provide better performance in a cross-discipline scenario.
In the ultimate world all tools will be on one platform, providing the best performance and support for this EPC contractor. However this is utopia. It is almost impossible to have a 100 % optimized system for a group of independent companies working together. Suppliers will not give up their environment and own IP to embed it in a customer´s ideal environment. So there is always a compromise to find between a best integrated platform (optimal performance – reduced cost of interfaces and cost of ownership) and the best connected environment (tools connection through open standards).
And this is why both Steve and Oleg have a viewpoint that makes sense. Depending on the performance of the tools and the interaction with the supplier network the PLM platform can provide the majority of functionality. If you are a market dominating OEM you might even reach 100 % coverage for your own purpose, although the modern society is more about connecting information where possible.
MY CONCLUSION after reading both posts:
- Oleg tries to provoke, and like a soap, you might end up confused after each episode.
- Steve in his post gives a common sense guidance, useful if you spend time on digesting it, not a soap.
Now I hope you are not longer confused and wish you all a successful and meaningful 2013. The PLM soap will continue in alphabetical order:
- Will Aras survive 21-12-2012 and support the Next generation ?
- Will Autodesk get of the cloud or have a coming out ?
- Will Dassault get more Experienced ?
- Will Oracle PLM customers understand it is not a database ?
- Will PTC get out of the CAD jail and receive $ 200 ?
- Will SAP PLM be really 3D and user friendly ?
- Will Siemens PLM become a DIN or ISO standard ?
See the next episodes of my PLM blog in 2013
Early this year Dassault Systèmes (DS) announced their future strategy called 3DExperience and it is only now after their two major events, the 3DExperience forums in the US and Europe, that the discussion has started around the meaning of 3DExperience.
In February, I thought 3DExperience was just a new marketing approach from DS to differentiate themselves from other vendors. A little more 3D, PLM has a bad connotation and as some of the newcomers redefined what is PLM, it made sense to be different again..
One of my fellow European bloggers, Yoann Maingon started a discussion with his provoking blog post: Different Marketing Strategies And Naming in PLM. Read the post and specially the comments from Jim Brown and Joe Barkai, who bring perspective to this post. In addition this post got traction in some closed LinkedIn PLM groups and it was interesting to observe that different interpretations of PLM created somehow the same feeling that I have with religion.
Stay with the book and the definition of PLM and complete your portfolio was the message. But which book and what is PLM ? Even if I would write the book: “The Truth about PLM”, who would consider my book as the authority.
We have learned from religion that concepts based on a book can lead to wars.
I am sure PLM will not go into that direction and it remains important not to focus on the definition of PLM, but at the end you want your customers (current and future) to be more efficient, more innovative and profitable. And in order to achieve that, you need to look at the whole process, starting with market interaction and delivery to the customer.
And for that there are many tasks to perform in a company. During your sales process, you need to make sure you address in the best manner the demands from the customer or market, so you can differentiate yourself from others. It can be based on your track record (best in class since 1845), your price (always the cheapest as you manage the process efficient) or your experience (the price and the good feeling it gives justifies the decision)
What has become clear in the past ten years is that we are in a global, changing market and specially traditional companies struggle to make a change which is future oriented. Customer loyalty was in the past based on the fact that you were in the same region, later the same country, but now everyone is shopping or sourcing around the world. Traditional markets and business are no longer secure.
So companies have to change and to my opinion one of the most important changes they have to go through is managing all information in their company (and from outside) in a shared manner. Products can no longer be defined without taking into account feedback and interaction from the market. Trends (positive or negative) related to your company or products need to be followed as they can kill or hype a product or your company.
To realize this change a company needs to start working different and this leads at then end to the need for different tools to support your changing processes. Here I see PLM systems coming into the picture. And here there are the two approaches: will you be selecting a single vendor with the richest PLM platform, or will you integrate a set of best in class applications. As we saw in the Tech4PD discussion there is no ultimate decision here.
I see the 3DExperience strategy from DS in this light. The classical scope of PLM tools and practices does not provide a base for the current and future markets. The solution is bigger than tools, it is the focus on the total experience (I could not find another name either).
It is a way to become attractive for your customers and not focus only on the product but also the way you can influence your potential customers to choose your product or service above others. DS call this the new era of 3DExperience, others will market it different.
In a consumer market we select products based on experience. Has anyone ever tried to justify the purchase of an iPad as an affordable device they need for their work ?
It is the experience.
There is one thing I dislike from the 3DEXperience approach. Blogging becomes expensive, as writing down the word 3DExperience – a mix of numbers and characters – slows down my efficiency. I prefer 3DE or3DX as the most efficient set of keystrokes related to a TLA.
To my opinion PLM is not dead at all for DS. They just market the bigger picture different to be different from the classical PLM platforms. All PLM vendors have their unique marketing approach. Companies need to define what is their next step to remain in business and they are afraid for the old PLM, due to the horror stories – complexity, expensive, etc.
Is it selling experiences or perhaps is it making sure a new generation of workers will be motivated to work for your company. It remains a mix of classical PLM functionality, but it is also big data, social media and more interactive and friendly interfaces which are expected.
Finally one observation from the 3DExperience forum in Brussels where I believe they could have done a better job. Usually when customers and prospects go to this kind of events, they want to hear that they have chosen the right software provider. So it should be a mix of assuring them they are not alone (many others have chosen our solutions) and excited by the future vision your vendor has. Here they message that all companies need to sell experiences in the future otherwise they will be a commodity created a bad mood. Fear does not push people to change, it paralyzes people.
Conclusion: Dassault Systemes new 3DExperiences is understandable as a way to introduce a bigger picture than PLM alone. If every company needs THE EXPERIENCE approach has to be seen. In addition I believe DS still needs to work on more understandable examples where the 3DE approach is a differentiator. For sure there is PLM inside
It is interesting to read management books and articles and reflect the content in the context of PLM. In my previous post How the brain blocks PLM acceptance and in Stephen Porter´s (not yet finished) serial The PLM state: the 7 habits of highly effective PLM adoption, you can discover obvious points that we tend to forget in the scope of PLM as we are so focused on our discipline.
This summer holiday I was reading the Innovator´s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton Christensen. Christensen is an associated professor at the Harvard Business School and he published this book already in 1997. Apparently not everyone has read the book and I recommend that if you are involved in the management of a PLM company to read it.
Sustaining technology
Christensen states there are two types of technologies. Leading companies are supporting their customers and try to serve them better and better by investing a lot in improving their current products. Christensen calls this sustaining technology as the aim is to improve existing products. Sustaining technologies lead to every time more and more effort to improve the current product performance and capabilities due to the chosen technology and solution concepts. These leading companies are all geared up around this delivery process and resources are optimized to sustain leadership, till ….
Disruptive technology
The other technology Christensen describes is disruptive technology, which initially is not considered as competition for existing technologies as it under performs in the same scope, so no way to serve the customer in the same way. The technology underperforms if you would apply to the same market, but it has unique capabilities that make it fit for another market. Next if the improvement path of disruptive technology can be faster than the improvement path for the sustaining technology, it is possible that their paths meet at a certain point. And although coming from a different set of capabilities, due to the faster improvement process the disruptive technology becomes the leading one and companies that introduced the disruptive technology became the new market leaders.
Why leading companies failed..
Christensen used the disk drive industry as an example as there the change in technology was so fast that it was a perfect industry to follow it´s dynamics. Later he illustrates the concepts with examples from other industries where the leading firms failed and stopped to exist because disruptive technologies overtook them and they were not able to follow that path too.
Although the leading companies have enough resources and skills, he illustrates that it is a kind of logical path – big companies will always fail as it is in their nature to focus on sustaining technology. Disruptive technologies do not get any attention as they are targeting a different unclear market in the beginning and in addition it is not clear where the value from this disruptive technology comes from, so which manager wants to risk his or her career to focus on something uncertain in an existing company.
Christensen therefore advises these leading companies, if they expect certain technologies to become disruptive for their business, to start a separate company and take a major share position there. Leave this company focus on its disruptive technology and in case they are successful and cross the path of the sustaining technology embed them again in your organization. Any other approach is almost sure to fail, quote:
Expecting achievement-driven employees in a large organization to devote critical mass of resources, attention and energy to disruptive projects targeted at a small market is equivalent to flapping one´s arms in an effort to fly
As the book was written in 1997, it was not in the context of PLM. Now let´s start with some questions.
Is ERP in the stage of sustaining technology?
Here I would say Yes. ERP vendors are extending their functional reach to cover more than the core functionality for two reasons: they need continuous growth in revenue and their customers ask for more functionality around the core. For sustaining technologies Christensen identifies four stages. Customers select a product for functionality, when other vendors have the same functionality reliability becomes the main differentiation. And after reliability the next phase is convenience and finally price.
From my personal observations, not through research, I would assume ERP for the major vendors is in the phase between convenience and price. If we follow Christensen´s analysis for SAP and Oracle it means they should not try to develop disruptive technologies inside their organization, neither should they try to downscale their product for the mid-market or add a different business model. Quote:
What goes up – does not go down. Moving to a high-end market is possible (and usually the target) – they will not go to small, poor defined low-end markets
How long SAP and Oracle will remain market leaders will depend on disruptive technologies that will meet the path of ERP vendors and generate a new wave. I am not aware of any trends in that area as I am not following the world of ERP closely
Is PLM in the stage of sustaining technology?
Here I would say No because I am not sure what to consider as a clear definition of PLM. Different vendors have a different opinion of what a PLM system should provide as core technologies. This makes it hard to measure it along the lifecycle of sustaining technology with the phases: functionality, reliability, convenience and price.
Where the three dominant PLM providers (DS/PTC/Siemens) battle in the areas of functionality, reliability and convenience others are focusing on convenience and price.
Some generalized thoughts passed my mind:
- DS and PTC somehow provoke their customers by launching new directions where they believe the customer will benefit from. This somehow makes it hard to call it sustaining technology.
- · Siemens claiming they develop their products based on what customers are asking for. According to Christensen they are at risk in the long term as customers keep you captive and do not lead you to disruptive technologies.
- · All three focus on the high-end and should not aim for smaller markets with the same technology. This justifies within DS the existence of CATIA and SolidWorks and in Siemens the existence of NX and SolidEdge. Unifying them would mean the end of their mid-market revenue and open it for others.
Disruptive technologies for PLM
Although PLM is not a sustained technology to my opinion, there are some disruptive technologies that might come into the picture of mainstream PLM.
First of all there is the Open Source software model, introduced by Aras, which initially is not considered as a serious threat for the classical PLM players – “big customers will never rely on open source”. However the Open Source model allows product improvements to move faster than main stream, reaching at a certain point the same level of functionality, reliability and convenience. The risk for Open Source PLM is that it is customer driven, which according Christensen is the major inhibitor for disruptive steps in the future
Next there is the cloud. Autodesk PLM and Kenesto are the two most visible companies in this domain related to PLM. Autodesk is operating from a comfort zone – it labels its product PLM, it does not try to match what the major PLM vendors try to do and they come from the small and medium mid-size market. Not too many barriers to come into the PLM mid-market in a disruptive manner. But does the mid-market need PLM? Is PLM a bad annotation for its cloud based product? Time will tell.
The management from Kenesto obviously has read the book. Although the initially concept came from PLM++ (bad marketing name), they do not to compete with mainstream PLM and aim their product at a different audience – business process automation. Then if their product picks up in the engineering / product domain, it might enter the PLM domain in a disruptive manner (all according to the book – they will become market leaders)
Finally Search Based Applications which are also a disruptive technology for the PLM domain. Many companies struggle with the structured data approach a classical PLM system requires and especially for mid-market companies this overhead is a burden. They are used to work in a cognitive manner, the validation and formalization is often done in the brain of experienced employees. Why cannot search based technology not be used to create structured data and replace or support the experienced brain?
If I open my Facebook page, I see new content related to where I am, what I have been saying or surfing for. Imagine an employee´s desktop that works similar, where your data is immediately visible and related information is shown. Some of the data might come from the structured system in the background, other might be displayed based on logical search criteria; the way our brain works. Some startups are working in this direction and Inforbix (congratulations Oleg & team) has already been acquired by Autodesk or Exalead by DS.
For both companies if they believe in the above concept, they should remain as long as possible independent from the big parent company as according to Christensen they will not get the right focus and priorities if they are part of the sustainable mainstream technology
Conclusion
This blog post was written during a relaxing holiday in Greece. The country here is in a crisis, they need disruptive politicians. They did it 3500 years ago and I noticed the environment is perfect for thinking as you can see below.
Meanwhile I am looking forward to your thoughts on PLM, in which state we are what the disruptive technologies are.
The brain has become popular in the Netherlands in the past two years. Brain scientists have been publishing books sharing their interpretations on various topics of human behavior and the brain. Common theme of all: The brain is influencing your perceptions, thoughts and decisions without you even being aware of it.
Some even go that far by claiming certain patterns in the brain can be a proof if you have a certain disorder. It can be for better or for worse.
“It was not me that committed this crime; it was my brain and more…”
Anyway this post will be full of quotes as I am not the brain expert, still giving the brain an important role (even in PLM)
“My brain? That´s my second favorite organ” – Woody Allen
It is good to be aware of the influence of the brain. I wrote about this several times in the past, when discussing PLM vendor / implementer selection or when even deciding for PLM. Many of my posts are related to the human side of justifying and implementing PLM.
As implementing PLM for me primary is a business change instead of a combination of IT-tools to implement, it might be clear that understanding the inhibitors for PLM change are important to me.
In the PLM communities, we still have a hard job to agree between each other what is the meaning of PLM and where it differs from ERP. See for example this post and in particular the comments on LinkedIn (if you are a member of this group): PLM is a business process, not a (software) tool
And why it is difficult for companies to implement PLM beside ERP (and not as an extension of ERP) – search for PLM and ERP and you find zillions of thoughts and answers (mine too).
The brain plays a major role in the Why PLM we have ERP battle (blame the brain). A week ago I read an older publication from Charles Roxburgh (published in May 2003 for McKinsey) called: Hidden flaws in strategy subtitle: Can insights from behavioral economics explain why good executives back bad strategies. You can read, hear and download the full article here if you are a registered user.
The article has been written long before the financial and global crises were on the agenda and Mr. Roxburgh describes 8 hidden flaws that influence our strategic decision making (and PLM is a strategy). I recommend all of you to read the full article, so the quotes I will be making below will be framed in the bigger picture as described by Mr. Roxburgh. Note all quotes below are from his publication.
Flaw 1: Overconfidence
We often make decisions with too much confidence and optimism as the brain makes us feel overconfident and over optimistic about our own capabilities.
Flaw 2: Mental accounting
Avoiding mental accounting traps should be easier if you adhere to a basic rule: that every pound (or dollar or euro) is worth exactly that, whatever the category. In this way, you will make sure that all investments are judged on consistent criteria and be wary of spending that has been reclassified. Be particularly skeptical of any investment labeled “strategic.”
Here I would relate to the difference in IT-spending and budget when you compare ERP and PLM. ERP spending is normal (or strategic) where PLM spending is not understood.
Flaw 3: The status quo bias
People would rather leave things as they are. One explanation for the status quo bias is aversion to loss—people are more concerned about the risk of loss than they are excited by the prospect of gain.
Another reason why adapting and implementing PLM in an organization is more difficult than for example just automating what we already do.
Flaw 4: Anchoring
Anchoring can be dangerous—particularly when it is a question of becoming anchored to the past
PLM has been anchored with being complex and expensive. Autodesk is trying to change the anchoring. Other PLM-like companies stop talking about PLM due to the anchoring and name what they do different: 3DExperience, Business Process Automation, …..
Flaw 5: The sunk-cost effect
A familiar problem with investments is called the sunk-cost effect, otherwise known as “throwing good money after bad.” When large projects overrun their schedules and budgets, the original economic case no longer holds, but companies still keep investing to complete them.
I have described several cases in the past anonymously; where companies kept on investing and customizing their ERP environment in order to achieve PLM goals. Although it never reached the level of acceptance and quality a PLM system could offer, stopping these projects was impossible.
Flaw 6: The herding instinct
This desire to conform to the behavior and opinions of others is a fundamental human trait and an accepted principle of psychology.
Warren Buffett put his finger on this flaw when he wrote, “Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press.”
A quote in a quote but so true. Innovative thinking, introducing PLM in a company requires a change. Who needs to be convinced? If you do not have consensus (which usually happens as PLM is vague) you battle against the other lemmings.
Flaw 7: Misestimating future hedonic states
Social scientists have shown that when people undergo major changes in circumstances, their lives typically are neither as bad nor as good as they had expected—another case of how bad we are at estimating. People adjust surprisingly quickly, and their level of pleasure (hedonic state) ends up, broadly, where it was before
A typical situation every PLM implementation faces: users complaining they cannot work as efficient anymore due to the new system and their work will be a mess if we continue like this. Implementers start to customize quickly and we are trapped. Let these people ‘suffer’ with the right guidance and motivation for some months (but this is sometimes not the business model the PLM implementer pushes as they need services as income)
Flaw 8: False consensus
People tend to overestimate the extent to which others share their views, beliefs, and experiences—the false-consensus effect. Research shows many causes, including these:
- confirmation bias, the tendency to seek out opinions and facts that support our own beliefs and hypotheses
- selective recall, the habit of remembering only facts and experiences that reinforce our assumptions
- biased evaluation, the quick acceptance of evidence that supports our hypotheses, while contradictory evidence is subjected to rigorous evaluation and almost certain rejection; we often, for example, impute hostile motives to critics or question their competence
- groupthink, the pressure to agree with others in team-based cultures
Although positioned as number 8 by Mr. Roxburgh, I would almost put it as the top when referring to PLM and PLM selection processes. So often a PLM decision has not been made in an objective manner and PLM selection paths are driven to come to the conclusion we already knew. (Or is this my confirmation bias too 
)
Conclusion
As scientists describe, and as Mr. Roxburgh describes (read the full article !!!) our strategic thinking is influenced by the brain and you should be aware of that. PLM is a business strategy and when rethinking your PLM strategy tomorrow, be prepared to avoid these flaws mentioned in this post today.
Sorry for the provoking title in a PLM blog, but otherwise you would not read my post till the end.
In the past months I have been working closely with several large companies (not having a mid-market profile). And although they were all in different industries and have different business strategies, they still had these common questions and remarks:
- How to handle more and more digital data and use it as valuable information inside the company or for their customers / consumers ?
- What to do with legacy data (approved in the previous century) and legacy people (matured and graduated in the previous century) preventing them to change ?
- We are dreaming of a new future, where information is always up-to-date and easy to access – will this ever happen ?
- They are in the automotive industry, manufacturing industry, infrastructure development and maintenance, plant engineering, construction and plant maintenance
- They all want data to be managed with (almost) zero effort
- And please, no revolution or change for the company
Although I have been focusing on the mid-market, it is these bigger enterprises that introduce new trends and as you can see from the observations above, there is a need for a change. But also it looks like the demands are in a contradiction to each other.
I believe it is just about changing the game.
If you look at the picture to the left, you see one of the contradictions that lead to PLM.
Increasing product quality, reducing time to market and meanwhile reducing costs seemed to be a contradiction at that time too.
Change ?
Although PLM has not been implemented (yet) in every company that could benefit from it, it looks like the bigger enterprises are looking for more.
the P from PLM becomes vague – it is no longer only the product that has the focus, it is also the whole context around the product that might influence it, that they want to take in consideration
the L from PLM remains – they still want to connect all information that is related to the lifecycle of their products or plants.
the M from Management has a bad association – companies believe that moving from their current state towards a managed environment of data is a burden. Too much overhead is the excuse to not manage dat. And their existing environments to manage data do not excel in user-friendliness. And therefore people jump towards using Excel.
Next
So if the P is not longer relevant, the M is a burden, what remains of PLM ?
Early June I presented at the Dassault Systems 3DExperience forum the topic of digital Asset Lifecycle Management for owners / operators. One of the areas where I believe PLM systems can contribute a lot to increase business value and profitability (quality and revenue – see using a PLM system for Asset Lifecycle Management )
Attending the key note speech it was clear that Dassault Systems does not talk about PLM anymore as a vision. Their future dream is a (3D) lifelike experience of the virtual world. And based on that virtual model, implement the best solution based on various parameters: revenue, sustainability, safety and more. By trying to manage the virtual world you have the option to avoid real costly prototypes or damaging mistakes.
I believe it is an ambitious dream but it fits in the above observations. There is more beyond PLM.
In addition I learned from talking with my peers (the corridor meetings) that also Siemens and PTC are moving towards a more industry or process oriented approach, trying to avoid the association with the generic PLM label.
Just at the time that Autodesk and the mid-market started to endorse PLM, the big three are moving away from this acronym.
This reminds me of what happened in the eighties when 3D CAD was introduced. At the time the mid-market was able to move to mainstream 3D (price / performance ratio changed dramatically) the major enterprises started to focus on PDM and PLM. So it is logical that the mid-market is 10 – 15 years behind new developments – they cannot afford experiments with new trends.
So let’s see what are the new trends:
- the management of structured and unstructured data as a single platform. We see the rise of Search Bases Application and business intelligence based on search and semantic algorithms. Using these capabilities integrated with a structured (PLM ? ) environment is the next big thing.
- Apps instead of generic applications that support many roles. The generic applications introduce such a complexity to the interface that they become hard to use by a casual user. Most enterprise systems, but also advanced CAD or simulation tools with thousands of options suffer from this complexity. Would not it be nice if you only had to work with a few dedicated apps as we do in our private life ?
- Dashboards (BI) that can be created on the
fly
representing actual data and trends based
on structured and unstructured data.
It reminded me of a PLM / ERP discussion I had with a company, where the general manager all the time stated the types of dashboards he wanted to see. He did not talk about PLM, ERP or other systems – he wanted the on-line visibility - Cloud services are coming. Not necessary centralizing all data on the cloud to reduce it cost. But look at SIRE and other cloud services that support a user with data and remote processing power at the moment required.
- Visual navigation through a light 3D Model providing information when required. This trend is not so recent but so far not integrated with other disciplines, the Google maps approach for 3D.
So how likely are these trends to change enterprise systems like PLM, ERP or CRM. In the table below I indicated where it could apply:
As you can see the PLM row has all the reasons to introduce new technologies and change the paradigm. For that reason combined with the observations I mentioned in the beginning, I am sure there is a new TLA (Three Letter Acronym) upcoming.
The good news is that PLM is dynamic and on the move. The bad news for potential PLM users is that the confusion remains – too many different PLM definitions and approaches currently – so what will be the next thing after PLM ?
Conclusion: The acronym PLM is not dead and becomes mainstream. On the high-end there is for sure a trend to a wider and different perspective of what was initially called PLM. After EDM, TDM, PDM and PLM we are waiting for the next TLA
May 24th, 2008 was the date I posted my first blog post as a Virtual Dutchman aiming to share PLM related topics for the mid-market.
I tried to stay away from technology and function/feature debates and based on my day to day observations, describe the human side of the PLM – what people do and why . All from a personal perspective and always open to discuss and learn more.
Looking back and reviewing my 86 posts and 233 comments so far, I would like to share a summary around some of the main topics in my blog.
PLM
In 2008, PLM awareness was much lower – at that time one of the reasons for me to start blogging. There was still a need to explain that PLM was a business strategy needed beside ERP and PDM.
PLM will bring more efficiency, and in better quality, new innovative products to the market due to better collaboration between teams and departments.
At that time the big three, Dassault Systemes, Siemens and PTC were all offering a very CAD-centric, complex approach for PLM. There was no real mid-market offering, although their marketing organizations tried to sell as-if a mid-marketing offering existed. Express, Velocity, ProductPoint where are these offerings now ?
Now, In 2012 there is an established PLM awareness as everyone is talking about (their interpretation of) PLM and with Autodesk, a company that knows how to serve the mid-market, also acknowledged there is a need for PLM in their customer base, the term PLM is widespread
The new PLM providers focus on a disconnect between PDM and PLM, as in particular the handling of enterprise data outside the PDM scope is a white space for many mid-market companies that need to operate on a global platform.
PLM & ERP
In the relation between PLM and ERP, I haven’t seen a big change the past four years. The two dominating ERP originated vendors, SAP and Oracle were paying attention to PLM in 2008 in their marketing and portfolio approach.
However their PLM offerings in my perception, haven’t moved much forward. SAP is selling ERP and yes there is a PLM module and Oracle is having PLM systems, but I haven’t seen a real targeted PLM campaign explaining the needs and value of PLM integrated with ERP.
Historically ERP is the main IT-system and gets all the management attention. PLM is more considered something for engineering (and gets less focus and budget). Understanding PLM and how it connects to ERP remains a point of attention and the crucial point of interaction is the manufacturing BOM and the place where it is defined. The two most read posts from my blog are: Where is the MBOM and next Bill of Materials for Dummies – ETO, indicating there is a lot of discussion around this topic.
I am happy to announce here that in October this year during PLM Innovation US, I will present and share my thoughts in more detail with the audience, hoping for good discussions
New trends
There are three new trends that became more clear the past four years.
The first one to mention is the upcoming of Search Based Applications (SBA). Where PLM systems require structured and controlled data, search based applications assist the user by “discovering” data anywhere in the organization, often in legacy systems or possible in modern communication tools.
I believe companies that develop an integrated concept of PLM and SBA can benefit the most. PLM and ERP vendors should think about combining these two approaches in an integrated offering. I wrote about this combined topic in my post: Social Media and PLM explained for Dummies
The second trend is the cloud. Where two-three years ago social media combined with PLM was the hype as a must for product innovation and collaboration, currently cloud is in focus.
Mainly driven and coming for the US, where the big marketing engine from Autodesk is making sure it is on the agenda of mid-market companies.
In Europe there is less a hype at this moment, different countries and many languages to support plus discussions around security take the overhand here.
For me a cloud solution for sure is lowering the threshold for mid-market companies to start implementing PLM. However how to make the change in your company ? It is not only an IT-offering. Like a similar discussion around Open Source PLM, there is still a need to provide the knowledge and change push inside a company to implement PLM correct. Who will provide these skills ?
The third trend is the applicability of PLM systems outside the classical manufacturing industries.
I have been writing about the usage of PLM systems for Owner/Operators and the civil / construction industry, where the PLM system becomes the place to store all plant related information, connected to assets and with status handling. Currently I am participating in several projects in these new areas and the results are promising
People and Change
I believe PLM requires a change in an organization not only from the IT perspective but more important from the way people will work in an organization and the new processes they require.
The change is in sharing information, making it visible and useful for others in order to be more efficient and better informed to make the right decisions much faster.
This is a global trend and you cannot stay away from it. Keeping data locked in your reach might provide job security but in the long term it kills all jobs in the company as competiveness is gone.
The major task here lies with the management that should be able to understand and execute a vision that is beyond their comfort zone. I wrote about this topic in my series around PLM 2.0
Modern companies with a new generation of workers will have less challenges with this change and I will try to support the change with arguments and experiences from the field.
Audience
Since February this year, WordPress provides much more statistics and interesting is the map below indicating in which countries my blog is read. As you can see there are only a few places left on earth where PLM is not studied. Good news !!
Although most of my observations come from working in Europe, it is the US that provides the most readers (30 %) , followed by India (9 %) and on the third place the UK (6 %).
This might be related to the fact that I write my blog in English (not in 100 % native English as someone commented once).
It makes me look forward to be in October in Atlanta during the PLM Innovation US conference to meet face to face with many of my blog readers and share experiences.
Conclusion
Reading back my posts since 2008, it demonstrated for me that the world of PLM is not a static environment. It is even that dynamic that some of the posts I wrote in the early days have become obsolete.
At the end of 2008 I predicted the future of PLM in 2050 – here we are on the right track.
There is still enough blogging to do without falling into repetitions and I am looking forward to your opinion, feedback and topics to discuss.
Related articles
- PLM misconceptions (virtualdutchman.com)
The past three weeks I had time to observe some PLM Vendors marketing messages (Autodesk as the major newbie). Some of these message lead to discussions in blogs or (LinkedIn) forums. Always a good moment to smile and think about reality.
In addition the sessions from PLM Innovation 2012 became available for the attendees (thanks MarketKey – good quality). I had the chance to see the sessions I missed. On my wish list was “The future of PLM Business Models” moderated by Oleg as here according to Oleg some interesting viewpoints came up. This related to my post where I mentioned the various definitions of PLM.
All the above inspired me to write this post, which made me realize we keep on pushing misconceptions around PLM in our customer’s mind, with the main goal to differentiate.
I will address the following four misconceptions. The last one is probably not a surprise, therefore on the last position. Still sometimes taken for granted.
- PLM = PLM
- On the cloud = Open and Upgradeable
- Data = Process Support
- Marketing = Reality
1. PLM = PLM
It is interesting to observe that the definition of PLM becomes more and more a marketing term instead of a common definition which applies to all.
Let me try to formulate again a very generic definition which captures most of what PLM Vendors target to do.
PLM is about connecting and sharing the company’s intellectual property through the whole product lifecycle. This includes knowledge created at the concept phase going through the whole lifecycle till a product is serviced in the field or decommissioned.
Experiences from the field (services / customers / market input) serve again for the other lifecycle phases as input to deliver a better or innovative product.
Innovation is an iterative process. It is not only about storing data, PLM is also covering the processes of managing the data, especially the change processes. Sharing data is not easy. It requires a different mind set, data is not only created for personal or departmental usage, but also should be found and extended by other roles in the organization. This all makes it a serious implementation, as aligning people is a business change, not an IT driven approach.
Based on this (too long) high-level PLM definition, it does not imply you cannot do PLM without a PLM system. You might also have a collection of tools that are able to provide a complete coverage of the PLM needs.
Oleg talks about DIY (Do It Yourself) PLM, and I have seen examples of Excel spreadsheets managing Excel spreadsheets and Email archives. The challenge I see with this type of PLM implementations is that after several years it is extremely difficult for a company to change. Possible reasons: the initial gurus do not longer work for the company, new employees need years of experience to find and interpret the right data.
A quick and simple solution can become a burden in the long term if you analyze the possible risks.
Where in the early years of PLM, it was mainly a Dassault Systemes, Siemens and PTC driven approach with deep CAD integrations, the later years other companies like Aras and now Autodesk, started to change the focus from classical PLM more to managing enterprise metadata. A similar approach SAP PLM is offering. Deep integrations with CAD are the most complex parts of PLM and by avoiding them, you can claim your system is easier to implement, etc., etc.
A Single version of the truth is a fancy PLM expression. It would be nice if this was also valid for the definition of PLM. The PLM Innovation 2012 session at the future of PLM models demonstrated that the vendors in this panel discussion had a complete different opinion about PLM. So how can people inside their company explain to the management and others why the need PLM and which PLM they have in mind ?
2. On the cloud = Open and Upgradeable
During the panel discussion Grant Rochelle from Autodesk mentioned the simplicity of their software and how easy it will be upgradeable in the future. Also he referred to Salesforce.com as a proof point.They provide online updates from the software, without the customer having to do anything.
The above statement is true as long as you keep your business coverage simple and do not anticipate changes in the future. Let me share you an analogy with SmarTeam, how it started in 1995
At that time SmarTeam was insanely configurable. The Data Model Wizard contained several PDM templates an within hours you could create a company specific data model. A non-IT skilled person could add attributes, data types, anything they wanted and build the application, almost the same as Autodesk 360. The only difference, SmarTeam was not on the cloud, but it was running on Windows, a revolution at that time as all serious PDM systems were Unix based.
The complexity came however when SmarTeam started to integrate deeply with CAD systems. These integrations created the need for a more standardized data model per CAD system. And as the SmarTeam R&D was not aware of each and every customer’s implementation, it became hard to define a common business logic in the data (and to remain easily upgradable).
I foresee similar issues with the new cloud based PLM systems. They seem to be very easy to implement (add what you want – it is easy). As long as you do not integrate to other systems it remains safe. Integrating with other and future systems requires either a common data definition (which most vendors do not like) or specific integrations with the cost of upgrading.
In the beginning everything is always possible with a well-defined system. But be aware looking back in history, every 10 years a disruptive wave comes in, changing the scope and upgradability.
And to challenge the cloud-based PLM vendors: in the generic definition of PLM that I shared above, PLM integrates also design data.
3. Data = Process Support
Another misconception, which originates from the beginning of PLM is the idea that once you have support for specific data in your system, you support the process.
First example: Items defined in ERP. When engineers started to use a PDM system and started to define a a new item there were challenges. I had many discussions with IT-departments, that they did not need or wanted items in PDM. ERP was the source for an item, and when a designer needed a new item, (s)he had to create it in ERP. So we have a single definition of the item.
Or the designer had to request a new item number from the ERP system. And please do not request numbers too often as we do not want to waste them was the message.
Ten years later this looks like a joke, as most companies have an integrated PDM/ERP process and understand that the initial definition of a new item comes from PDM and at a certain stage the matured item is shared (and completed) by the ERP system. It is clear that the most efficient manner to create a new item is through PLM as the virtual definition (specs / CAD data) also reside there and information is handled in that context.
A second more actual example is the fact that compliancy is often handled in ERP. It is correct that in the case you manufacture a product for a specific target market, you need to be able to have the compliancy information available.
However would you do this in your ERP system, where you are late (almost at the end) of the design lifecycle or is it more logical that during your design stages at all time you verify and check compliancy ? The process will work much more efficient and with less cost of change when done in PLM but most companies still see ERP as their primary IT system and PLM is an engineering tool.
Finally on this topic a remark to the simplified PLM vendors. Having the ability to store for example requirements in your system does not mean you have support for a complete requirements management process. It is also about the change and validation of requirements, which should be integrated for a relevant role during product definition (often CAD) and validation. As long as the data is disconnected there is not such a big advantage compared to Excel.
4. Marketing = Reality
In the future of PLM Business Models
Oleg showed a slide with the functional architectures of the major PLM Vendors. In the diagram all seems to be connected as a single system, but in reality this is usually not the case.
As certain components / technologies are acquired, they provide the process coverage and only in the future you can imagine it works integrated. You cannot blame marketing for doing so, as their role is to position their products in the most appealing way customers will buy it. Without marketing perhaps no-one would buy a PLM system, when understanding the details 
Autodesk as a newcomer in PLM has a strong background in marketing. This is understandable as similar to Microsoft, their main revenue comes from selling a large volume of products, where the classical PLM vendors often have a combination with services and business change. And therefore a different price point.
When in the eighties Autodesk introduced AutoCAD, it was a simple, open 2D CAD environment, able to run on a PC. Autodesk’s statement at that time: “We provide 80 percent of the functionality for 20 % of the price”.
Does this sound familiar nowadays ?
As AutoCAD was a basic platform allowing customers and resellers to build their solutions on top of it, this became the mid-market success for Autodesk with AutoCAD.
The challenge with Autodesk PLM 360 is that although the same logic seems to make sense, I believe the challenge is not in the flexible platform. The challenge is in the future, when people want to do more complex things with the system, like integrations with design, enterprise collaboration.
At that time you need people who can specify the change, guide the change and implement the change. And this is usually not a DIY job.
Autodesk is still learning to find the right PLM messages I noticed recently. When attending the Autodesk PLM session during PLM Innovation 2012 (end of February), one of their launching customers ElectronVault presented their implementation – it took only two weeks !!! Incredible
However reading Rob Cohee’s blog post the end of March, he mentions ElectronVault again. Quote:
ElectronVault was searching for something like this for over two years and after 6 weeks they have implemented Project Management, EBOM, MBOM, and starting on their APQP project. Six Weeks!!!
As you see, four weeks later the incredible two weeks have become six weeks and again everything is implemented. Still incredible and I am looking forward to meet ElectronVault in the future as I believe they are a typical young company and they will go through all of the maturity phases a company will go through: people, processes and tools (in this order). A tool driven implementation is more likely to slow down in the long term.
Conclusion: Misconceptions are not new. History can teach us a lot about what we experience now. New technology, new concepts can be a break through. However implementing them at companies requires a change in organizations and this has been the biggest challenge the past 100 years.
Related articles
- The Question of PLM or Not to PLM (arnoldit.com)
- Innovation @ PLM Innovation 2012 ? (virtualdutchman.com)
Last week I started my final preparation for the PLM Innovation Congress 2012 on February 22nd and 23rd in Munich, where I will speak about Making the Case for PLM. Looking forward for two intensive days of knowledge sharing and discussion
The question came to my mind that when you make the case for PLM, you also must be clear about what you mean by PLM. And here I started to struggle a little. I have my perception of PLM, but I am also aware everyone has a different perception about the meaning of PLM.
I wrote about it last year, triggered by a question in the CMPIC group (configuration management) on LinkedIn. The question was Aren’t CM and PLM the same thing ? There was a firm belief from some of the members that PLM was the IT-platform to implement CM.
A few days ago Inge Craninckx posted a question in the PDM PLM CAD network group about the definition of PLM based on a statement from the PLMIG. In short:
“PDM is the IT platform for PLM.”Or, expressed from the opposite viewpoint: “PLM is the business context in which PDM is implemented
The response from Rick Franzosa caught my attention and I extracted the following text:
The reality is that most PLM systems are doing PDM, managing product data via BOM management, vaulting and workflow. In that regard, PDM [read BOM management, vaulting and workflow], IS the IT platform for the, in some ways, unfulfilled promise of PLM.
I fully agree with Rick’s statement and coming back to my introduction about making the case for PLM, we need to differentiate how we implement PLM. Also we have to take into our minds that no vendor, so also not a PLM vendor, will undersell their product. They are all promising J
Two different types of PLM implementation
Originally PLM has started in 1999 by extending the reach of Product Data outside the engineering department. However besides just adding extra functionality to extend the coverage of the lifecycle, PLM also created the opportunity to do things different. And here I believe you can follow two different definitions and directions for PLM.
Let’s start with the non-disruptive approach, which I call the extended PDM approach
Extended PDM
When I worked 6 years ago with SmarTeam on the Express approach, the target was to provide an OOTB (Out of the Box) generic scenario for mid-market companies. Main messages were around quick implementation and extending the CAD data management with BOM and Workflow. Several vendors at that time have promoted their quick start packages for the mid-market, all avoiding one word: change.
I was a great believer of this approach, but the first benchmark project that I governed demonstrated that if you want to do it right, you need to change the way people work, and this takes time (It took 2+ years). For the details: See A PLM success story with ROI from 2009
Cloud based solutions have become now the packaging for this OOTB approach enriched, with the ease of deployment – no IT investment needed (and everyone avoids the word change again).
If you do not want to change too much in your company, the easiest way to make PDM available for the enterprise is to extend this environment with an enterprise PLM layer for BOM management, manufacturing definition, program management, compliancy and more.
Ten years ago, big global enterprises started to implement this approach, using local PDM systems for mainly engineering data management and a PLM system for the enterprise. See picture below:
This approach is now adapted by the Autodesk PLM solution and also ARAS is marketing themselves in the same direction. You have a CAD data management environment and without changing much on that area, you connect the other disciplines and lifecycle stages of the product lifecycle by implementing an additional enterprise layer.
The advantage from this approach is you get a shared and connected data repository of your product data and you are able to extend this with common best practices, BOM management (all the variants EBOM/MBOM/SBOM, …) but also connect the market opportunities and the customer (Portfolio management, Systems engineering)
The big three, Dassault Systemes, Siemens PLM and PTC, provide the above functionality as a complete set of functionalities – either as a single platform or as a portfolio of products (check the difference between marketing and reality).
Oracle and SAP also fight for the enterprise layer from the ERP side, by providing their enterprise PLM functionality as an extension of their ERP functionality. Also here in two different ways: as a single platform or as a portfolio of products. As their nature is on efficient execution, I would position these vendors as the one that drive for efficiency in a company, assuming all activities somehow can be scheduled and predicted
My statement is that extended PDM leads to more efficiency, more quality (as you standardize on your processes) and for many companies this approach is a relative easy way to get into PLM (extended PDM). If your company exists because of bringing new products quickly to the market, I would start from the PDM/PLM side with my implementation.
The other PLM – innovative PLM
Most PLM vendors associate the word PLM in their marketing language with Innovation. In the previous paragraph I avoided on purpose the word Innovation. How do PLM vendors believe they contribute to Innovation?
This is something you do not hear so much about. Yes, in marketing terms it works, but in reality? Only few companies have implemented PLM in a different way, most of the time because they do not carry years of history, numbering systems, standard procedures to consider or to change. They can implement PLM in a different way, as they are open to change.
If you want to be innovative, you need to implement PLM in a more disruptive manner, as you need to change the way your organization is triggered – see the diagram below:
The whole organization works around the market, the customer. Understanding the customer and the market needs at every moment in the organization is key for making a change. For me, an indicator of innovative PLM is the way concept development is connected with the after sales market and the customers. Is there a structured, powerful connection in your company between these people? If not, you do the extended PLM, not the innovative PLM.
Innovative PLM requires a change in business as I described in my series around PLM 2.0. Personally I am a big believer that this type of PLM is the lifesaver for companies, but I also realize it is the hardest to implement as you need people that have the vision and power to change the company. And as I described in my PLM 2.0 series, the longer the company exist, the harder to make a fundamental change.
Conclusion
There are two main directions possible for PLM. The first and oldest approach, which is an extension of PDM and the second approach which is a new customer centric approach, driving innovation. Your choice to make the case for one or the other, based on your business strategy.
Looking forward to an interesting discussion and see you in Munich where I will make the case
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:
| First post | : What is PLM 2.0? – published Aug 24th |
| Second post | : Challenges in current PLM – published Sept 4th |
| This post | : Change in business – published Oct 3rd |
| Final post | : Why PLM 2.0 – conclusions |
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 21st 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 21st 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
Jos Voskuil's Weblog 
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