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Meanwhile, two weeks of a partial lockdown have passed here in the Netherlands, and we have at least another 3 weeks to go according to the Dutch government. The good thing in our country, decisions, and measures are made based on the advice of experts as we cannot rely on politicians as experts.

I realize that despite the discomfort for me, for many other people in other countries, it is a tragedy. My mental support to all of you, wherever you are.

So what has happened since Time to Think (and act differently)?

All Hands On Deck

In the past two weeks, it has become clear that a global pandemic as this one requires an “All Hands On Deck” mentality to support the need for medical supplies and in particular respiration devices, so-called ventilators. Devices needed to save the lives of profoundly affected people. I have great respect for the “hands” that are doing the work in infectious environments.

Due to time pressure, innovative thinking is required to reach quick results in many countries. Companies and governmental organizations have created consortia to address the urgent need for ventilators. You will not see so much PR from these consortia as they are too busy doing the real work.

Still, you see from many of the commercial participants their marketing messages, why, and how they contribute to these activities.

One of the most promoted capabilities is PLM collaboration on the cloud as there is a need for real-time collaboration between people that are under lockdown. They have no time setting-up environments and learning new tools to use for collaboration.

For me, these are grand experiments, can a group of almost untrained people corporate fast in a new environment.

For sure, offering free cloud software, PLM, online CAD or 3D Printing, seems like a positive and compassionate gesture from these vendors. However, this is precisely the wrong perception in our PLM-world – the difficulty with PLM does not lie necessary in the tools.

 

It is about learning to collaborate outside your silo.

Instead of “wait till I am done” it should become “this is what I have so far – use it for your progress”. This is a behavior change.

Do we have time for behavioral changes at this moment? Time will tell if the myth will become a reality so fast.

A lot of thinking

The past two weeks were weeks of thinking and talking a lot with PLM-interested persons along the globe using virtual meetings.

As long as the lockdowns will be there I keep on offering free of charge PLM coaching for individuals who want to understand the future of PLM.

Through all these calls, I really became THE VirtualDutchman in many of these meetings (thanks Jagan for the awareness).

I realized that there is a lot of value in virtual meetings, in particular with the video option on. Although I believe video works well when you had met before as most of my current meetings were with people, I have met before face-to-face. Hence, you know each other facial expressions already.

I am a big fan of face-to-face meetings as I learned in the past 20 years that despite all the technology and methodology issues, the human factor is essential. We are not rational people; we live and decide by emotions.

Still, I conclude that in the future, I could do with less travel, as I see the benefits from current virtual meetings.

Less face-to-face meetings will help me to work on a more sustainable future as I am aware of the impact flying has on the environment. Also, talking with other people, there is the notion that after the lockdowns, virtual conferencing might become more and more a best practice. Good for the climate, the environment, and time savings – bad for traditional industries like aircraft carriers, taxis, and hotels. I will not say 100 % goodbye but reduce.

A Virtual PLM conference!

I was extremely excited to participate in the upcoming PLM Innovation Forum (PLMIF) starting on April 28th, organized by TECHNIA. I have been visiting the event in the past a few times in Stockholm. It was a great place to meet many of the people from my network.

This time I am even more excited as the upcoming PLMIF will be a VIRTUAL conference with all the aspects of a real conference – read more about the conference here.

There will be an auditorium where lectures will be given, there are virtual booths, and it will be a place to network virtually. In my next post, I hope to zoom in on the conference.

Sustainability, a circular economy, and modern PLM should go together. Since 2014, these topics have been on the agenda of the joint CIMdata Roadmap/PDT conferences. Speakers like Amir Rashid KTH Sweden, Ken Webster Ellen MacArthur Foundation, and many others have been talking about the circular economy.

The Scandinavian mindset for an inclusive society for people and the environment for sure, has influenced the agenda. The links above lead to some better understanding of what is meant by a circular economy and a sustainable future, as also the short YouTube movie below:

The circular economy is crucial for a sustainable future. Therefore, I am looking forward to participating in the upcoming PLM Innovation Forum on April 28th, where it will be all about digitalization for sustainable product development and manufacturing. Hopefully, with the right balance towards the WHY-side of our brain, not so much about WHAT.

You are welcomed to register for free here: the virtual PLM Innovation Forum – we might meet there (virtually).

The PLM Green Alliance

The PLM Green Alliance had been announced some months ago, started by Rich McFall and supported by  Bjorn Fidjeland,  Oleg Shilovitsky, and me.

It was the first step to proactively bringing people together to discuss topics like reducing our carbon footprint, sharing and brainstorming about innovations that will lead to a sustainable future for ourselves and our children, grand-grand-children. The idea behind the PLM Green Alliance is that a proactive approach is much cheaper in the long term as we can still evaluate and discuss options.

This brings me back to the All hands On Deck approach we currently use for fighting the COVID-19 virus.

In a crisis mode, the damage to the people and the economy is severe. Besides, in a crisis mode, a lot of errors will be made, but don’t blame or joke about these people that are trying. Without failure, there is no learning.

We are in a potential time of disruption as the image shows below, but we do not have the complete answers for the future

Think about how you could pro-actively work on a sustainable future for all of us. This will be my personal target, combined with explaining and coaching companies related to topics of modern PLM, during the current lockdown and hopefully long after. The PLM Green Alliance is eager to learn from you and your companies where they are contributing to a more sustainable and greener future.

Do not feel your contribution is not needed, as according to research done by the Carr Center’s Erica Chenoweth: The ‘3.5% rule’: How a small minority can change the world. It could be an encouragement to act instead of watching who will determine your future.

Conclusion

While learning to live in a virtual world, we might be realizing that the current crisis is an opportunity to switch faster to a more sustainable and inclusive society. For PLM moving to data-driven, cloud-based environments, using a Model-Based approach along the whole lifecycle, is a path to reduce friction when delivering innovations. From years to weeks? Something we wished to have today already. Stay safe!

This post is based on a mix of interactions I had the last two weeks in my network, mainly on LinkedIn.  First, I enjoyed the discussion that started around Yoann Maingon post: Thoughts about PLM Business models. Yoann is quite seasoned in PLM, as you can see from his LinkedIn profile, and we have had interesting discussions in the past, and recently about a new PLM-system, he is developing Ganister PLM, based on a flexible Graph database.

Perhaps in that context, Yoann was exploring the various business models. Do you pay for the software (and maintenance), do you pay through subscription, what about a modular approach or a full license for all the functionality? All these questions made me think about the various business models that I encountered and how hard it is for a customer to choose the optimal solution.  And is the space for a new type of PLM? Is there space for free PLM? Some of my thoughts here:

PLM vendors need to be profitable

One of the most essential points to consider is that whatever PLM solution you are aiming to buy, make sure that your PLM vendor has a profitable business model. As once you started with a PLM solution, it is your company’s IP that will be stored in this environment, and you do not want to change every few years your PLM system. Switching PLM systems would be affordable if the PLM system would store their data in a standard format – I will share a more in-depth link under PLM and standards.

For the moment, you cannot state PLM vendors endorse standards. None of the real PLM vendors have a standardized data model, perhaps closest to standards are Eurostep, who have based that ShareAspace solution on top of the PLCS (ISO 10303) standard. However, ShareAspace is more positioned as a type of middleware, connecting between OEMs/Owner/Operators and their suppliers to benefit for standardized connectivity.

Coming back to the statement, PLM Vendors need to be profitable to provide a guarantee for the future of your company’s data is the first step. The major PLM Vendors are now profitable as during a consolidation phase starting 15 years ago, a lot of non-profitable PLM Vendors disappeared. Matrix One, Agile, Eigner & Partner PLM are the best-known companies that were bought for either their technology or market share. In that context, you might also look at OnShape.

Would they be profitable as a separate company, or would investors give up? To survive, you need to be profitable, so giving software away for free is not a good sign (see the software for free paragraph) as a company needs continuity.

PLM startups

In the past 10 years, I have seen and evaluated several new PLM companies. All of them did not really change the PLM paradigm, most of them were still focusing on being an engineering collaboration tools. Several of these companies have in their visionary statement that they are going to be the “Excel killer.” We all know Excel has the best user interface and capabilities to manipulate a collection of metadata.

Very popular is the BOM in Excel, extracted from the CAD-system (no need for an “expensive” PDM or PLM) or BOM used to share with suppliers and stakeholders (ERP is too rigid, purchasing does not work with PDM).

The challenge I see here is that these startups do not bring real new value. The cost of manipulating Excels is a hidden cost, and companies relying on Excel communication are the type of companies that do not have a strategic point of view. This is typical for Small and Medium businesses where execution (“let’s do it”) gets all the attention.

PLM startups often collect investor’s money because they promise to kill Excel, but is Excel the real problem? Modern PLM is about data sharing, which is an attitude change, not necessarily a technology change from Excel tables to (cloud) shared tables. However, will one of these “new Excel killers” PLMs be disruptive? I don’t think so.

PLM disruption?

A week ago, I read an interview with Clayton Christensen (thanks Hakan Karden), which I shared on LinkedIn a week ago. Clayton Christensen is the father of the Disruptive Innovation theory, and I have cited him several times in my blogs. His theory is, in my opinion, fundamental to understand how traditional businesses can be disrupted. The interview took place shortly before he died at the age of 67. He died due to complications caused by leukemia.

A favorite part of this interview is, where he restates what is really Disruptive Innovation as we often talk about disruption without understanding the context, just echoing other people:

Christensen: Disruptive innovation describes a process by which a product or service powered by a technology enabler initially takes root in simple applications at the low end of a market — typically by being less expensive and more accessible — and then relentlessly moves upmarket, eventually displacing established competitors. Disruptive innovations are not breakthrough innovations or “ambitious upstarts” that dramatically alter how business is done but, rather, consist of products and services that are simple, accessible, and affordable. These products and services often appear modest at their outset but over time have the potential to transform an industry.

Many of the PLM startups dream and position themselves as the new disruptor.  Will they succeed? I do not believe so if they only focus on replacing Excel, there is a different paradigm needed. Voice control and analysis perhaps (“Hey PLM if I change Part XYZ what will be affected”)?

This would be disruptive and open new options. I think PLM startups should focus here if they want my investment money.

PLM for free?

There are some voices that PLM should be free in an analogy to software management and collaboration tools. There are so many open-source software management tools, why not using them for PLM? I think there are two issues here:

  • PLM data is not like software data. A lot of PLM data is based on design models (3D CAD / Simulation), which is different from software. Designs are often not that modular as software for various reasons. Companies want to be modular in their products, but do they have the time and resources to reinvent their existing product. For software, these costs are so much lower as it is only a brain exercise. For hardware, the impact is significant. Bringing me to the second point.
  • The cost of change for hardware is entirely different compared to software. Changing software does not have an impact on existing stock or suppliers and, therefore, can be implemented once tested for its purpose. A hardware change impacts the existing production process. First, use the old parts before introducing the change, or do we accept the (costs) of scrap. Is our supply chain, or are our production tools ready to deliver continuity for the new version? Hardware changes are costly, and you want to avoid them. Software changes are cheap, therefore design your products to be configurable based on software (For example Tesla’s software controlling the features to be allowed)

Now imagine, with enough funding, you could provide a PLM for free.  Because of ease of deployment, this would be very likely a cloud offering, easy and scalable. However, all your IP is in that cloud too, and let’s imagine that the cloud is safer than on-premise, so it does not matter in which country your data is hosted (does it ?).

Next, the “free” PLM provider starts asking a small service fee after five years, as the promised ROI on the model hasn’t delivered enough value for the shareholders, they become anxious. Of course, you do not like to pay the fee. However, where is your data, and what happens when you do not pay?

If the PLM provider switches you off, you are without your IP. If you ask the PLM provider to provide your data, what will you get? A blob of XML-files, anything you can use?

In general, this is a challenge for all cloud solutions.

  • What if you want to stop your subscription?
  • What is the allowed Exit-strategy?

Here I believe customers should ask for clarity, and perhaps these questions will lead to a renewed understanding that we need standards.

PLM and standards

We had a vivid discussion in the blogging community in September last year. You can read more related to this topic in my post: PLM and the need for standards which describes the aspects of lock-in and needs for openness.

Finally, a remark related to the PLM-acronym. Another interesting discussion started around Joe Barkai’s post: Why I do not do PLM . Read the comments and the various viewpoint on PLM here. It is clear that the word PLM unites us all; however, the interpretation is different.

If someone in the street asks me what is your profession, I never mention I do PLM. I say: “I assist mainly manufacturing companies in redesigning their business processes using best practices and modern digital technologies”. The focus is on the business value, not on the ultimate definition of PLM

Conclusion

There are many business aspects related to PLM to consider. Yoann Maingon’s post started the thinking process, and we ended up with the PLM-definition. It all illustrates that being involved in PLM is never a boring journey. I am curious to learn about your journey and where we meet.

Last week I shared my thoughts related to my observation that the ROI of PLM is not directly visible or measurable, and I explained why. Also, I explained that the alignment of an organization requires a myth to make it happen. A majority of readers agreed with these observations. Some others either misinterpreted the headlines or twisted the story in favor of their opinion.

A few came from Oleg Shilovitsky and as Oleg is quite open in his discussions, it allows me to follow-up on his statements. Other people might share similar thoughts but they haven’t had the time or opportunity to be vocal. Feel free to share your thoughts/experiences too.

Some misinterpretations from Oleg’s post: PLM circa 2020 – How to stop selling Myths

  • The title “How to stop selling Myths” is the first misinterpretation.
    We are not selling myths – more below.
  • “Jos Voskuil’s recommendation is to create a myth. In his PLM ROI Myths article, he suggests that you should not work on a business case, value, or even technology” is the second misinterpretation, you still need a business case, you need value and you need technology.

And I got some feedback from Lionel Grealou, who’s post was a catalyst for me to write the PLM ROI Myth post. I agree I took some shortcuts based on his blog post. You can read his comments here. The misinterpretation is:

  • “Good luck getting your CFO approve the business change or PLM investment based on some “myth” propaganda :-)” as it is the opposite, make your plan, support your plan with a business case and then use the myth to align

I am glad about these statements as they allow me to be more precise, avoiding misperceptions/myth-perceptions.

A Myth is bad

Some people might think that a myth is bad, as the myth is most of the time abstract.  I think these people do not realize that there a lot of myths that they are following; it is a typical social human behavior to respond to myths. Some myths:

  • How can you be religious without believing in myths?
  • In this country/world, you can become anything if you want?
  • In the past, life was better
  • I make this country great again

The reason human beings need myths is that without them, it is impossible to align people around abstract themes. Try for each of the myths above to create an end-to-end logical story based on factual and concrete information. Impossible!

Read Yuval Harari’s book Sapiens about the power of myths. Read Steven Pinker’s book Enlightenment Now to understand that statistics show a lot of current myths are false. However, this does not mean a myth is bad. Human beings are driven by social influences and myths – it is our brain.

Unless you have no social interaction, you might be immune to myths. With brings me to quoting Oleg once more time:

“A long time ago when I was too naive and too technical, I thought that the best product (or technology) always wins. Well… I was wrong. “

I went through the same experience, having studied physics and mathematics makes you think extremely logical. Something I enjoyed while developing software. Later, when I started my journey as the virtualdutchman mediating in PLM implementations, I discovered logical alone does not work in businesses. The majority of decisions are done based on “gut feelings” still presented as reasonable cases.

Unless you have an audience of Vulcans, like Mr. Spock, you need to deal with the human brain. Consider the myth as the envelope to pass the PLM-project to the management. C-level acts by myths as so far I haven’t seen C-level management spending serious time on understanding PLM. I will end with a quote from Paul Empringham:

I sometimes wish companies would spend 6 months+ to educate themselves on what it takes to deliver incremental PLM success BEFORE engaging with software providers

You don’t need a business case

Lionel is also skeptical about some “Myth-propaganda” and I agree with him. The Myth is the envelope, inside needs to be something valuable, the strategy, the plan, and the business case. Here I want to stress one more time that most business cases for PLM are focusing on tool and collaboration efficiency. And from there projecting benefits. However, how well can we predict the future?

If you implement a process, let’s assume BOM-collaboration done with Excel by BOM-collaboration based on an Excel-on-the-cloud-like solution, you can measure the differences, assuming you can measure people’s efficiency. I guess this is what Oleg means when he explains OpenBOM has a real business case.

However, if you change the intent for people to work differently, for example, consult your supplier or manufacturing earlier in the design process, you touch human behavior. Why should I consult someone before I finish my job, I am measured on output not on collaboration or proactive response? Here is the real ROI challenge.

I have participated in dozens of business cases and at the end, they all look like the graph below:

The ROI is fantastic – after a little more than 2 years, we have a positive ROI, and the ROI only gets bigger. So if you trust the numbers, you would be a fool not to approve this project. Right?

And here comes the C-level gut-feeling. If I have a positive feeling (I follow the myth), then I will approve. If I do not like it, I will say I do not trust the numbers.

Needless to say that if there was a business case without ROI, we do not need to meet the C-level. Unless, and it happens incidental, at C-level, there was already a decision we need PLM from Vendor X because we played golf together, we are condemned together or we believe the same myths.

In reality, the old Gartner graph from realized benefits says it all. The impact of culture, processes, and people can make or break a plan.

You do not need an abstract story for PLM

Some people believe PLM on its own is a myth. You just need the right technology and people will start using it, spreading it out and see how we have improved business. Sometimes email is used as an example. Email is popular because you can with limited effort, collaborate with people, no matter where they are. Now twenty years later, companies are complaining about the lack of traceability, the lack of knowledge and understanding related to their products and processes.

PLM will always have the complexity of supporting traceability combined with real-time collaboration. If you focus only on traceability, people will complain that they are not a counter clerk. If you focus solely on collaboration, you miss the knowledge build-up and traceability.

That’s why PLM is a mix of governance, optimized processes to guarantee quality and collaboration, combined with a methodology to tune the existing processes implemented in tools that allow people to be confident and efficient. You cannot translate a business strategy into a function-feature list for a tool.

Conclusion

Myths are part of the human social alignment of large groups of people. If a Myth is true or false, I will not judge. You can use the Myth as an envelope to package your business case. The business case should always be a combination of new ways of working (organizational change), optimized processes and finally, the best tools. A PLM tool-only business case is to my opinion far from realistic

 

Now preparing for PI PLMx London on 3-4 February – discussing Myths, Single BOMs and the PLM Green Alliance

It’s the beginning of the year. Companies are starting new initiatives, and one of them is potentially the next PLM-project. There is a common understanding that implementing PLM requires a business case with ROI and measurable results. Let me explain why this understanding is a myth and requires a myth.

I was triggered by a re-post from Lionel Grealou, titled: Defining the PLM Business Case.  Knowing Lionel is quite active in PLM and digital transformation, I was a little surprised by the content of the post. Then I noticed the post was from January 2015, already 5 years old. Clearly, the world has changed (perhaps the leadership has not changed).

So I took this post as a starting point to make my case.

In 2015, we were in the early days of digital transformation. Many PLM-projects were considered as traditional linear projects. There is the AS-IS situation, there is the TO-BE situation. Next, we know the  (linear) path to the solution and we can describe the project and its expected benefits.

It works if you understand and measure exactly the AS-IS situation and know almost entirely the TO-BE situation (misperception #1).

However,  implementing PLM is not about installing a new transactional system. PLM implementations deal with changing ways-of-working and therefore implementing PLM takes time as it is not just a switch of systems. Lionel was addressing this point:

“The inherent risks associated with any long term business benefit driven projects include the capability of the organization to maintain a valid business case with a benefit realization forecast that remains above the initial baseline. The more rework is required or if the program delivery slips, the more the business case gets eroded and the longer the payback period.”

Interestingly here is the mentioning ..the business case gets eroded – this is most of the time the case. Lionel proposes to track business benefits. Also, he mentions the justification of the PLM-project could be done by considering PLM as a business transformation tool (misperception #2) or a way to mitigate risk,s due to unsupported IT-solutions (misperception #3).

Let’s dive into these misperceptions

#1 Compare the TO-BE and the AS-IS situation

Two points here.

  1. Does your company measure the AS-IS situation? Do you know how your company performs when it comes to PLM related processes? The percentage of time spent by engineers for searching for data has been investigated – however, PLM goes beyond engineering. What about product management, marketing, manufacturing, and service?  Typical performance indicators mentioned are:
    • Time To Market (can you measure?)
    • Developing the right product – better market responsiveness (can you measure?)
    • Multidisciplinary collaboration (can you measure?)
  2. Do you know the exact TO-BE situation? In particular, when you implement PLM, it is likely to be in the scope of a digital transformation. If you implement to automate and consolidate existing processes, you might be able to calculate the expected benefits. However, you do not want to freeze your organization’s processes. You need to implement a reliable product data infrastructure that allows you to enhance, change, or add new processes when required. In particular, for PLM, digital transformation does not have a clear target picture and scope yet. We are all learning.

#2 PLM is a business transformation tool

Imagine you install the best product innovation platform relevant for your business and selected by your favorite consultancy firm. It might be a serious investment; however, we are talking about the future of the company, and the future is in digital platforms. So nothing can go wrong now.

Does this read like a joke? Yes, it is, however, this is how many companies have justified their PLM investment. First, they select the best tool (according to their criteria, according to their perception), and then business transformation can start. Later in time, the implementation might not be so successful; the vendor and/or implementer will be blamed. Read: The PLM blame game

When you go to PLM conferences, you will often hear the same mantras: Have a vision, Have C-level sponsoring/involved, No Big Bang, it is a business project, not an IT-project, and more. And vendor-sponsored sessions always talk about amazing fast implementations (or did they mean installing the POC ?)

However, most of the time, C-level approves the budget without understanding the full implications (expecting the tool will do the work); business is too busy or does not get enough allocated time to supporting implementation (expecting the tool will do the work). So often the PLM-project becomes an IT-project executed mainly by the cheapest implementation partner (expecting the tool will do the work). Again this is not a joke!

A business transformation can only be successful if you agree on a vision and a learning path. The learning path will expose the fact that future value streams require horizontal thinking and reallocation of responsibilities – breaking the silos, creating streams.

Small teams can demonstrate these benefits without disrupting the current organization. However, over time the new ways of working should become the standard, therefore requiring different types of skills (people), different ways of working (different KPIs and P&L for departments), and ultimate different tools.

As mentioned before, many PLM-projects start from the tools – a guarantee for discomfort and/or failure.

#3 – mitigate risks due to unsupported IT-solutions

Often PLM-projects are started because the legacy environment becomes outdated. Either because the hardware infrastructure is no longer supported/affordable or the software code dependencies on the latest operating systems are no longer guaranteed.

A typical approach to solve this is a big-bang project – the new PLM system needs to contain all the old data and meanwhile, to justify the project, the new PLM system needs to bring additional business value. The latter part is most of the time not difficult to identify as traditional PLM implementations most of the time were in reality cPDM environments with a focus on engineering only.

However, the legacy migration can have such a significant impact on the new PLM-system that it destroys the potential for the future. I wrote about this issue in The PLM Migration Dilemma

How to approach PLM ROI?

A PLM-project never will get a budget or approval from the board when there is no financial business case. Building the right financial business case for PLM is a skill that is often overlooked. During the upcoming PI PLMx London conference (3 – 4 February), I will moderate a Focus Group where we will discuss how to get PLM on the Exec’s agenda.

Two of my main experiences:

  • Connect your PLM-project to the business strategy. As mentioned before, isolated PLM fails most of the time because business transformation, organizational change and the targeted outcome are not included. If PLM is not linked to an actual business strategy, it will be considered as a costly IT-project with all its bad connotations. Have a look at my older post: PLM, ROI and disappearing jobs
  • Create a Myth. Perhaps the word Myth is exaggerated – it is about an understandable vision. Myth connects nicely to the observations from behavioral experts that our brain does not decide on numbers but by emotion. Big decisions and big themes in the world or in a company need a myth: “Make our company great again” could be the tagline. In such a case people get aligned without a deep understanding of what is the impact or business case; the myth will do the work – no need for a detailed business case. A typical human behavior, see also my post: PLM as a myth.

Conclusion

There should never be a business case uniquely for PLM – it should always be in the context of a business strategy requiring new ways of working and new tools. In business, we believe that having a solid business case is the foundation for success. Sometimes an overwhelming set of details and numbers can give the impression that the business case is solid.  Consultancy firms are experts in this area to build a business case based on emotion. They know how to combine numbers with a myth. Therefore look at their approach – don’t be too technical / too financial. If the myth will hold, at the end depends on the people and organization, not on the investments in tools and services.

It is the holiday season many groups, religions have their celebrations in this period, mostly due to the return of the light on the Northern hemisphere – Christmas, Diwali, Hanukkah, Kwanzaa and Santa Lucia are a few of them. Combined with a new decade upcoming, also a time for me to reflect on what have we learned and what can we imagine in the next ten years.

Looking back the last decade

Globalization is probably one of the most significant changes we have seen. Almost the whole world is connected now through all kinds of social and digital media. Information is instantly available and influences our behavior dramatically. The amount of information coming to us is so huge that we only filter the information that touches us emotionally. The disadvantage of that, opinions become facts and different opinions become enemies. A colorful society becomes more black and white.

These trends have not reached us, in the same manner, the domain of PLM. There have been several startups in the past ten years, explaining that PLM should be as easy as social communication with Facebook. Most of these startups focused on integrations with MCAD-systems, as-if PLM is about developing mechanical products.

In my opinion, the past decade has shown that mechanical design is no longer a unique part of product development. Products have become systems, full of electronics and driven by software. Systems Engineering became more and more important, defining the overall concept of a product, moving the focus to the earlier stages of the product design – see image below.

During Ideation and system definition, we need “social” collaboration between all stakeholders. To get a grip on this collaboration, we use models (SysML, UML, Logical, 2D, 3D) to have an unambiguous representation, simulation and validation of the product already in the virtual world.

Actually, there is nothing social about that collaboration. It is a company-driven demand to deliver competitive products to remain in business. If our company does not improve multidisciplinary collaboration, global competitors with less nostalgic thoughts to the past will conquer the market space.

Currently in most companies there are two worlds, hardware and software, almost 100 %-separated managed by either PLM or ALM (Application Lifecycle Management). It is clear that “old” PLM – item-driven with related documents cannot match the approach required for ALM – data-elements (code) based on software models (and modules).

In the hardware world a change can have a huge effect on the cost (or waste) of the product, however, implementing a hardware change can take months. Think about new machinery, tooling in the worst case. In the software domain, a change can be executed almost immediately. However here testing the impact of the change can have serious effects. The software fix for the Boeing 737 Max is not yet proven and delivered.

Therefore, I would like to conclude that in the past decade we learned in the PLM-domain to work in a Coordinated manner – leaving silos mostly in place.

Next week I will look forward to our challenging upcoming decade. Topics on my list for the next decade are:

  • From Coordinated to Connected – Generation Change
  • Sustainability of our Earth (and how PLM can help)
  • Understanding our human behavior to understand how to explain PLM to your execs- PI PLMx London 2020
  • All combined with restoring trust in science

 

I wish you all a happy and healthy New Year – take time to listen and learn as we need dialogue for the future, not opinions.

See you in 2020

In my previous post, the PLM blame game, I briefly mentioned that there are two delivery models for PLM. One approach based on a PLM system, that contains predefined business logic and functionality, promoting to use the system as much as possible out-of-the-box (OOTB) somehow driving toward a certain rigidness or the other approach where the PLM capabilities need to be developed on top of a customizable infrastructure, providing more flexibility. I believe there has been a debate about this topic over more than 15 years without a decisive conclusion. Therefore I will take you through the pros and cons of both approaches illustrated by examples from the field.

PLM started as a toolkit

The initial cPDM/PLM systems were toolkits for several reasons. In the early days, scalable connectivity was not available or way too expensive for a standard collaboration approach. Engineering information, mostly design files, needed to be shared globally in an efficient manner, and the PLM backbone was often a centralized repository for CAD-data. Bill of Materials handling in PLM was often at a basic level, as either the ERP-system (mostly Aerospace/Defense) or home-grown developed BOM-systems(Automotive) were in place for manufacturing.

Depending on the business needs of the company, the target was too connect as much as possible engineering data sources to the PLM backbone – PLM originated from engineering and is still considered by many people as an engineering solution. For connectivity interfaces and integrations needed to be developed in a time that application integration frameworks were primitive and complicated. This made PLM implementations complex and expensive, so only the large automotive and aerospace/defense companies could afford to invest in such systems. And a lot of tuition fees spent to achieve results. Many of these environments are still operational as they became too risky to touch, as I described in my post: The PLM Migration Dilemma.

The birth of OOTB

Around the year 2000, there was the first development of OOTB PLM. There was Agile (later acquired by Oracle) focusing on the high-tech and medical industry. Instead of document management, they focused on the scenario from bringing the BOM from engineering to manufacturing based on a relatively fixed scenario – therefore fast to implement and fast to validate. The last point, in particular, is crucial in regulated medical environments.

At that time, I was working with SmarTeam on the development of templates for various industries, with a similar mindset. A predefined template would lead to faster implementations and therefore reducing the implementation costs. The challenge with SmarTeam, however, was that is was very easy to customize, based on Microsoft technology and wizards for data modeling and UI design.

This was not a benefit for OOTB-delivery as SmarTeam was implemented through Value Added Resellers, and their major revenue came from providing services to their customers. So it was easy to reprogram the concepts of the templates and use them as your unique selling points towards a customer. A similar situation is now happening with Aras – the primary implementation skills are at the implementing companies, and their revenue does not come from software (maintenance).

The result is that each implementer considers another implementer as a competitor and they are not willing to give up their IP to the software company.

SmarTeam resellers were not eager to deliver their IP back to SmarTeam to get it embedded in the product as it would reduce their unique selling points. I assume the same happens currently in the Aras channel – it might be called Open Source however probably it is only high-level infrastructure.

Around 2006 many of the main PLM-vendors had their various mid-market offerings, and I contributed at that time to the SmarTeam Engineering Express – a preconfigured solution that was rapid to implement if you wanted.

Although the SmarTeam Engineering Express was an excellent sales tool, the resellers that started to implement the software began to customize the environment as fast as possible in their own preferred manner. For two reasons: the customer most of the time had different current practices and secondly the money come from services. So why say No to a customer if you can say Yes?

OOTB and modules

Initially, for the leading PLM Vendors, their mid-market templates were not just aiming at the mid-market. All companies wanted to have a standardized PLM-system with as little as possible customizations. This meant for the PLM vendors that they had to package their functionality into modules, sometimes addressing industry-specific capabilities, sometimes areas of interfaces (CAD and ERP integrations) as a module or generic governance capabilities like portfolio management, project management, and change management.

The principles behind the modules were that they need to deliver data model capabilities combined with business logic/behavior. Otherwise, the value of the module would be not relevant. And this causes a challenge. The more business logic a module delivers, the more the company that implements the module needs to adapt to more generic practices. This requires business change management, people need to be motivated to work differently. And who is eager to make people work differently? Almost nobody,  as it is an intensive coaching job that cannot be done by the vendors (they sell software), often cannot be done by the implementers (they do not have the broad set of skills needed) or by the companies (they do not have the free resources for that). Precisely the principles behind the PLM Blame Game.

OOTB modularity advantages

The first advantage of modularity in the PLM software is that you only buy the software pieces that you really need. However, most companies do not see PLM as a journey, so they agree on a budget to start, and then every module that was not identified before becomes a cost issue. Main reason because the implementation teams focus on delivering capabilities at that stage, not at providing value-based metrics.

The second potential advantage of PLM modularity is the fact that these modules supposed to be complementary to the other modules as they should have been developed in the context of each other. In reality, this is not always the case. Yes, the modules fit nicely on a single PowerPoint slide, however, when it comes to reality, there are separate systems with a minimum of integration with the core. However, the advantage is that the PLM software provider now becomes responsible for upgradability or extendibility of the provided functionality, which is a serious point to consider.

The third advantage from the OOTB modular approach is that it forces the PLM vendor to invest in your industry and future needed capabilities, for example, digital twins, AR/VR, and model-based ways of working. Some skeptic people might say PLM vendors create problems to solve that do not exist yet, optimists might say they invest in imagining the future, which can only happen by trial-and-error. In a digital enterprise, it is: think big, start small, fail fast, and scale quickly.

OOTB modularity disadvantages

Most of the OOTB modularity disadvantages will be advantages in the toolkit approach, therefore discussed in the next paragraph. One downside from the OOTB modular approach is the disconnect between the people developing the modules and the implementers in the field. Often modules are developed based on some leading customer experiences (the big ones), where the majority of usage in the field is targeting smaller companies where people have multiple roles, the typical SMB approach. SMB implementations are often not visible at the PLM Vendor R&D level as they are hidden through the Value Added Reseller network and/or usually too small to become apparent.

Toolkit advantages

The most significant advantage of a PLM toolkit approach is that the implementation can be a journey. Starting with a clear business need, for example in modern PLM, create a digital thread and then once this is achieved dive deeper in areas of the lifecycle that require improvement. And increased functionality is only linked to the number of users, not to extra costs for a new module.

However, if the development of additional functionality becomes massive, you have the risk that low license costs are nullified by development costs.

The second advantage of a PLM toolkit approach is that the implementer and users will have a better relationship in delivering capabilities and therefore, a higher chance of acceptance. The implementer builds what the customer is asking for.

However, as Henry Ford said, if I would ask my customers what they wanted, they would ask for faster horses.

Toolkit considerations

There are several points where a PLM toolkit can be an advantage but also a disadvantage, very much depending on various characteristics of your company and your implementation team. Let’s review some of them:

Innovative: a toolkit does not provide an innovative way of working immediately. The toolkit can have an infrastructure to deliver innovative capabilities, even as small demonstrations, the implementation, and methodology to implement this innovative way of working needs to come from either your company’s resources or your implementer’s skills.

Uniqueness: with a toolkit approach, you can build a unique PLM infrastructure that makes you more competitive than the other. Don’t share your IP and best practices to be more competitive. This approach can be valid if you truly have a competing plan here. Otherwise, the risk might be you are creating a legacy for your company that will slow you down later in time.

Performance: this is a crucial topic if you want to scale your solution to the enterprise level. I spent a lot of time in the past analyzing and supporting SmarTeam implementers and template developers on their journey to optimize their solutions. Choosing the right algorithms, the right data modeling choices are crucial.

Sometimes I came into a situation where the customer blamed SmarTeam because customizations were possible – you can read about this example in an old LinkedIn post: the importance of a PLM data model

Experience: When you plan to implement PLM “big” with a toolkit approach, experience becomes crucial as initial design decisions and scope are significant for future extensions and maintainability. Beautiful implementations can become a burden after five years as design decisions were not documented or analyzed. Having experience or an experienced partner/coach can help you in these situations. In general, it is sporadic for a company to have internally experienced PLM implementers as it is not their core business to implement PLM. Experienced PLM implementers vary from size and skills – make the right choice.

 

Conclusion

After writing this post, I still cannot write a final verdict from my side what is the best approach. Personally, I like the PLM toolkit approach as I have been working in the PLM domain for twenty years seeing and experiencing good and best practices. The OOTB-box approach represents many of these best practices and therefore are a safe path to follow. The undecisive points are who are the people involved and what is your business model. It needs to be an end-to-end coherent approach, no matter which option you choose.

 

 

 

After my previous post about the PLM migration dilemma, I had several discussions with peers in the field why these PLM bad news are creating so much debate. For every PLM vendor, I can publish a failure story if I want. However, the reality is that the majority of PLM implementations do not fail.

Yes, they can cause discomfort or friction in an organization as implementing the tools often forces people to work differently.  And often working differently is not anticipated by the (middle) management and causes, therefore, a mismatch for the people, process & tools paradigm.

So we love bad news in real life. We talk about terrorism while meanwhile, a large number of people are dying through guns, cars, and even the biggest killer mosquitos. Fear stories sell better than success stories, and in particular, in the world of PLM Vendors, every failure of the competition is enlarged.  However, there are more actors involved in a PLM implementation, and if PLM systems would be that bad, they would not exist anymore and replace by ………?

Who to blame – the vendor?

Of course, it is the easiest way to blame the vendor as their marketing is promising to solve all problems. However, when you look from a distance to the traditional PLM vendor community, you see they are in a rat-race to deliver the latest and greatest technology ahead of their competition, often driven by some significant customers.

Their customers are buying the vision and expect it to be ready and industrialized, which is not the case – look at the digital twin hype or AI (Artificial Intelligence).  Released PLM software is not at the same maturity compared to office applications. Office applications do not innovate so much and have thousands of users during a beta-cycle and no dependency on processes.

Most PLM vendors are happy when a few customers jump on their latest release, combined with the fact that implementations of the most recent version are not yet a push on the button.  This might change in the long term if PLM Vendors can deliver cloud-based solutions.

PLM implementations within the same industry might look the same but often vary a lot due to existing practices, which will not change due to the tool – so there is a need for customization or configuration.

PLM systems with strong business rules inside their core might more and more develop towards configuration, where PLM toolkit-like systems might focus on ease of customization. Both approaches have their pro’s and con’s (in another blog post perhaps).

Another topic to blame the vendor is lack of openness.  You hear it in many discussions. If vendor X were open, they would not lock the data – a typical marketing slogan. If PLM vendors would be completely open, to which standards should they adhere?  Every PLM has its preferred collection of tools together – if you stay within their portfolio you have a minimum of compatibility or interface issues.

This logic started already with SAP in the previous century. For PLM vendors, there is no business model for openness. For example, the SmarTeam APIs for connecting and extracting data are available free of charge, leading to no revenue for the vendor and significant revenue for service providers. Without any license costs, they can build any type of interface/solution. In the end, when the PLM vendor has no sustainable revenue, the vendor will disappear as we have seen between 2000 and 2010, where several stand-alone PLM systems disappeared.

So yes, we can blame PLM vendors for their impossible expectations – coming to realistic expectations related to capabilities and openness is probably the biggest challenge.

Who to blame – the implementer?

The second partner in a PLM implementation is the implementation partner, often a specialized company related to the PLM vendor. There are two types of implementation partners – the strategic partners and the system integrators.

Let’s see where we can blame them.

Strategic partners, the consultancy firms,  often have a good relationship with the management, they help the company to shape the future strategy, including PLM. You can blame this type of company for their lack of connection to the actual business. What is the impact on the organization to implement a specific strategy, and what does this mean for current or future PLM?

Strategic partners should be the partner to support business change management as they are likely to have experience with other companies. Unfortunate, this type of companies does not have significant skills in PLM as the PLM domain is just a small subset of the whole potential business strategy.

You can blame them that they are useful in building a vision/strategy but fail to create a consistent connection to the field.

Implementation partners, the system integrators, are most of the times specialized in one or two PLM vendor’s software suites, although the smaller the implementation partner, the less broad their implementation skills. These implementation partners sometimes have built their own PLM best practices for a specific vendor and use this as a sales argument. Others just follow blindly what the vendor is promoting or what the customer is asking for.

They will do anything you request, as long as they get paid for it. The larger ones have loads of resources for offshore deliveries – the challenge you see here is that it might look cheap; however, it becomes expensive if there is no apparent convergence of the deliverables.

As I mentioned before they will never say No to a customer and claim to fill all the “gaps,” there are in the PLM environment.

You can blame implementation partners that their focus is on making money from services. And they are right, to remain in business your company needs to be profitable. It is like lawyers; they will invoice you based on their efforts. And the less you take on your plate, the more they will do for you.

The challenge for both consultancy partners as system integrators is to find a balance between experienced people, who really make it happen and educating juniors to become experts too. Often the customer pays for the education of these juniors

Who to blame – your company?

If your company is implementing PLM, then probably the perception is that that you made all the effort to make it successful.  You followed the advice of the strategic consultants, you selected the best PLM Vendor and system integrator, you created a budget – so what could go wrong?

This all depends on your company’s ambition and scope for PLM.

Implementing the as-is processes

If your PLM implementation is just there to automate existing practices and store data in a central location, this might work out. And this is most of the time when PLM implementations are successful. You know what to expect, and your system integrator knows what to expect.

This type of project can run close to budget, and some system integrators might be tempted to offer a fixed price. I am not a fan of fixed priced projects as you never know exactly what needs to be done. The system integrator might raise the target price with 20 – 40 % to cover their risk or you as a company might select the cheapest bid – another guarantee for failure. A PLM implementation is not a one-time project, it is an on-going journey. Therefore your choice needs to be sustainable.

My experience with this type of implementations is that it easy to blame the companies here too. Often the implementation becomes an IT-project, as business people are too busy to run their day-to-day jobs, therefore they only incidentally support the PLM project. The result is that at a specific moment, users confronted with the system feel not connected to the new system – it was better in the past. In particular, configuration management and change processes can become waterproof, leaving no freedom for the users. Then the blaming starts – first the software then the implementer.

But what if you have an ambitious PLM project as part of a business transformation?

In that case, the PLM platform is just one of the elements to consider. It will be the enabler for new ways of working, enabling customer-centric processes, multi-discipline collaboration, and more. All related to a digital transformation of the enterprise. Therefore, I mention PLM platform instead of PLM system. Future enterprises run on data through connected platforms. The better you can connect your disciplines, the more efficient and faster your company will operate. This, as opposed to the coordinated approach, which I have been addressing several times in the past.

A business transformation is a combination of end-to-end understanding of what to change – from management vision connected to the execution in the field. And as there is not an out-of-the-box template for business transformation, it is crucial a company experiments, evaluates and when successful, scales up new habits.

Therefore, it is hard to define upfront all the effort for the PLM platform and the implementation resources. What is sure is that your company is responsible for that, not an external part. So if it fails, your company is to blame.

Is everyone to blame?

You might have the feeling that everyone is to blame when a PLM implementation fails. I believe that is indeed the case. If you know in advance where all players have their strengths and weaknesses, a PLM implementation should not fail, but be balanced with the right resources. Depending on the scope of your PLM implementation, is it a consolidation or a transformation, you should take care of all stakeholders are participating in the anti-blame game.

The anti-blame game is an exercise where you make sure that the other parties in the game cannot blame you.

  • If you are a vendor – do not over commit
  • If you are a consultant or system integrator – learn to say NO
  • If you are the customer – make sure enough resources are assigned – you own the project. It is your project/transformation.

This has been several times my job in the past, where I was asked to mediate in a stalling PLM implementation. Most of the time at that time it was a blame game, missing the target to find a solution that makes sense. Here coaching from experienced PLM consultants makes sense.

 

Conclusion

Most of the time, PLM implementations are successful if the scope is well understood and not transformative. You will not hear a lot about these projects in the news as we like bad news.

To avoid bad news challenging PLM implementations should make sure all parties involved are challenging the others to remain realistic and invest enough. The role of an experienced external coach can help here.

 

 

After two reposts, I have finally the ability to write with full speed, and my fingers were aching, having read some postings in the past four weeks.  It started with Verdi Ogewell’ s article on Engineering.com Telecom Giant Ericsson Halts Its PLM Project with Dassault’s 3DEXPERIENCE followed by an Aras blog post Don’t Be a Dinosaur from Mark Reisig, and of course, I would say Oleg Shilovitsky’s post: What to learn from Ericsson PLM failure?

Setting the scene

Verdi’s article is quite tendentious based on outside observations and insinuations. I let you guess who sponsored this article.  If I had to write an article about this situation,

I would state: Ericsson and Dassault failed to migrate the old legacy landscape into a new environment – an end-to-end migration appeared to be impossible.

The other topics mentioned are not relevant to the current situation.

Mark is chiming in on Verdi’s truth and non-relevant points to data migration, suggesting PLM is chosen over dinner. Of course, decisions are not that simple. It is not clear from Mark’s statement, who are the Dinosaurs:

Finally, don’t bet your future on a buzzword. Before making a huge PLM investment, take the time to make sure your PLM vendor has an actual platform. Have them show you their spider chart.  And here’s the hard reality: they won’t do it, because they can’t.

Don’t be a dinosaur—be prepared for the unexpected with a truly resilient digital platform.

I would state, “Don’t bet your future on a spider chart” if you do not know what the real problem is.

 

Oleg’s post finally is more holistic, acknowledging that a full migration might not be the right target, and I like his conclusion:

Flexibility Vs. Out of the box products – which one do you prefer? Over-customize a new PLM to follow old processes? To use a new system as an opportunity to clean existing processes? To move 25,000 people from one database to another is not a simple job. It is time to think about no upgrade PLM systems. While a cloud environment is not an option for mega-size OEMs like Ericsson, there is an opportunity for OEM IT together with the PLM vendor to run a migration path. The last one is a costly step. But… without this step, the current database oriented single-version of truth PLM paradigm is doomed.

The Migration Problem

I believe migration of data – and sometimes the impossibility of data migration – is the biggest elephant in the room when dealing with PLM projects. In 2015 during the PI PLM conference in Dusseldorf, I addressed this topic for the first time: The Challenge of PLM Upgrades.
You can find the presentation on SlideShare here.

I shared a similar example to the Ericsson case from almost 10 years ago. At that time, one of the companies I was working with wanted to replace their mainframe application, which was managing the configuration of certain airplanes. The application managed the aircraft configuration structures in tables and where needed pointing to specifications in a document repository. The two systems were not connected; integrity was guaranteed through manual verification procedures.

The application was considered as the single version of the truth, and has been treated like that for decades. The reason for migration was that all the knowledge of the application disappeared, tables were documented, but the logic was not. And besides this issue, the maintenance costs for the mainframe was also high – also at that time vendor lock-in existed.

The idea was to implement SmarTeam – flexible data model – rapid deployment based on windows technology  -to catch two birds with one stone, i.e., latest microsoft technology and meanwhile direct link to the controlled documents. As they were using CATIA V5, the SmarTeam-integration was a huge potential benefit. For the migration of data, the estimate was two months. What could go wrong?

Well, technically, almost nothing went wrong. The challenge was to map the relational tables to the objects in the SmarTeam data model. And as the relational tables contained a mix of document and item attributes, splitting these tables was not always easy. Sometimes the same properties were with different values in the original table – which one was the truth? The migration took almost two years also due to limited availability of the last knowledgeable resource who could explain the logic.

After the conversion, the question still remained if the migrated data was accurate? Perhaps 99 %?
But what if it was critical? For this company, it was significant, but not mission critical like in Ericsson, where a lot of automation and rules are linked together between loads of systems.

So my point: Dassault has failed at Ericsson and so will Siemens or Aras or any other PLM vendor as the migration issue is not in the technology – we should stop thinking about this kind of migrations.

Who are the dinosaurs?

Mark is in a way suggesting that when you use PLM software from the “old” PLM vendors, you are a dinosaur. Of course, this is a great marketing message, but the truth is that it is not the PLM vendor to blame. Yes, some have more friction than the other in some instances, but in my opinion, there is no ultimate single PLM vendor.

Have a look at the well-known Daimler case from some years ago, which made the news because Daimler decided to replace CATIA by NX. Not because NX was superior – it was about maintaining the PLM backbone Smaragd which would be hard to replace. Even in 2010, there was already the notion that the existing data management infrastructure is hard to replace. See a more neutral article about this topic from Monica Schnitger if you want: Update: Daimler chooses NX for Smaragd.  Also here in the end, it became a complete Siemens account for compatibility reasons.

When you look at the significant wins Aras is mentioning in their customer base, GM, Schaeffler or Airbus, you will probably discover Aras is more the connection layer between legacy systems, old PLM or PDM systems. They are not the new PLM replacing old PLM.  A connection layer creates a digital thread, connecting various data sources for traceability but does not provide digital continuity as the data in the legacy systems is untouched. Still it is an intermediate step towards a hybrid environment.

For me the real dinosaurs are these large enterprises that have been implementing their proprietary PLM environments in the previous century and have built a fully automated infrastructure based on custom data models with a lot of proprietary rules. This was the case in Ericsson, but most traditional automotive and aerospace companies share this problem, as they were the early PLM adopters. And they are not the only ones. Many industrial manufacturing companies suffer from the past, opposite to their Asian competitors who can start with less legacy.

What’s next?

It would be great if the PLM community focused more on the current incompatibility of data between current/past concepts and future digital needs and discuss solution paths (for sure standards will pop-up)

Incompatibility means: Do not talk about migration but probably focus on a hybrid landscape with legacy data, managed in a coordinated manner, and modern, growing digital PLM processes based on a connected approach.

This is the discussion I would like to see, instead of vendors claiming that their technology is the best. None of the vendors will talk about this topic – like the old “Rip-and-Replace” approach is what brings the most software revenue combined with the simplification that there is only OnePLM. It is interesting to see how many companies have a kind of OnePLM or OneXXX statement.

The challenge, of course, is to implement a hybrid approach. To have the two different PLM-concepts work together, there is a need to create a reliable overlap. The reliable overlap can come from an enterprise data governance approach if possible based on a normalized PLM data model. So far all PLM vendors that I know have proprietary data models, only ShareAspace from Eurostep is based on the PLCS standard, but their solutions are most of the time part of a larger PLM-infrastructure (the future !)

To conclude: I look forward to discussing this topic with other PLM peers that are really in the field, discovering and understanding the chasm between the past and the future. Contact me directly or join us as the PLM Roadmap and PDT Europe 13-14 November in Paris. Let’s remain fact-based!
(as a matter of fact you can still contribute – call for papers still open)

 

 

 

I am writing this post during the Easter weekend in the Netherlands. Easter / Passover / Pascha / are religious festivities that happen around this time, depending on full moons, etc. I am not the expert here, however, what I like about Easter is that is it is an optimistic religious celebration, connecting history, the “dark days,” and the celebration of new life.

Of course, my PLM-twisted brain never stops associating and looking into an analogy, I saw last week a LinkedIn post from Mark Reisig, about Aras ACE 2019 opening with the following statement:

Digital Transformation – it used to be called PLM,” said Aras CEO Peter Schroer, as he opened the conference with some thoughts around attaining sustainable Digital Transformation and owning the lifecycle.

Was this my Easter Egg surprise? I thought we were in the middle of the PLM Renaissance as some other vendors and consultants talk about this era. Have a look at a recent Engineering.com TV-report: Turning PLM on its head

All jokes aside, the speech from Peter Schroer contained some interesting statements and I want to elaborate on them in this post as the space to comment in LinkedIn is not designed for a long answer.

PLM is Digital Transformation?

In the past few years, there has been a discussion if the acronym PLM (Product Lifecycle Management) is perhaps outdated. PTC claimed thanks to IoT (Internet of Things) now PLM equals IoT, as you can read in  Mark Taber’s 2018 guest article in Digital Engineering: IoT Equals PLM.
Note: Mark is PTC’s vice president of marketing and go-to-market marketing according to the bio at the bottom of the article. So a lot of marketing words, which  strengthens the believers of the old world, that everything new is probably marketing.

Also during the PDT conferences, we discussed if PLM should be replaced by a new acronym and I participated in that discussion too – my Nov 2018 postWill MBSE be the new PLM instead of IoT? is a reflection of my thoughts at that time.

For me, Digital Transformation is a metamorphosis from a document-driven, sequential processes towards data-driven, iterative processes. The metamorphosis example used a lot at this moment, is the one from Caterpillar towards the Butterfly. This process is not easy when it comes to PLM-related information, as I described in my PI PLMx 2019 London Presentation and blog post: The Challenges of a Connected Ecosystem for PLM. The question is even: Will there be a full metamorphosis at the end or will we keep on working in two different modes of operations?

However, Digital Transformation does not change the PLM domain. Even after a successful digital transformation, there will be PLM. The only significant difference in the future – PLM boarders will not be so evident anymore when implementing capabilities in a system or a platform. The upcoming of digital platforms will dissolve or fade the traditional PLM-mapped capabilities.

You can see these differences already by taking an in-depth look at how Oracle, SAP or Propel address PLM. Each of them starts from a core platform with different PLM-flavored extensions, sometimes very different from the traditional PLM Vendors. So Digital transformation is not the replacement of PLM.

Back to Peter Schroer’s rebuttal of some myths. Note: DX stands for Digital Transformation

Myth #1: DX leverages disruptive tech

Peter Schroer:

 It’s easy to get excited about AI, AR, and the 3D visual experience. However, let’s be real. The first step is to get rid of your spreadsheets and paper documentation – to get an accurate product data baseline. We’re not just talking a digital CAD model, but data that includes access to performance data, as-built parts, and previous maintenance work history for everyone from technicians to product managers

Here I am fully aligned with Peter. There are a lot of fancy features discussed by marketing teams, however, when working in the field with companies, the main challenge is to get an organization digital aligned, sharing data accessible along the whole lifecycle with the right quality.

This means you need to have a management team, understanding the need for data governance, data quality and understanding the shift from data ownership to data accountability.  This will only happen with the right mix of vision, strategy and the execution of the strategy – marketing does not make it happen

 

Myth #2: DX results in increased market share, revenue, and profit

Peter Schroer:

Though there’s a lot of talk about it – there isn’t yet any compelling data which proves this to be true. Our goal at Aras is to make our products safer and faster. To support a whole suite of industrial applications to extend your DX strategy quite a bit further.

Here I agree and disagree, depending on the context of this statement. Some companies have gone through a digital transformation and therefore increased their market share, revenue, and profit. If you read books like Leading Transformation or Leading Digital, you will find examples of companies that have gone through successful digital transformations. However, you might also discover that most of these companies haven’t transformed their PLM-domain, but other parts of their businesses.

Also, it is interesting to read a 2017 McKinsey post: The case for digital reinvention, where you will get the confirmation that a lot of digital initiatives did not bring more top-line revenue and most of the times lead to extra costs. Interesting to see where companies focus their digital strategies – picture below:

Where only 2 percent of the respondents were focusing on supply chains, this is, according to the authors of the article, one of the areas with the highest potential ROI. And digital supply chains are closely related to modern PLM – so this is an area with enough work to do by all PLM practitioners– connecting ecosystems (in real-time)

Myth #3: Market leaders are the most successful at DX

Peter Schroer:

If your company is hugely profitable at the moment, it’s highly likely that your organization is NOT focused on Digital Transformation. The lifespan of S&P 500 companies continuing to shrink below 20 years.

How to Attain Sustainable Digital Transformation

– Stop buying disposable systems. It’s about an adaptable platform – it needs to change as your company changes.

– Think incremental. Do not lose momentum. Continuous change is a multi-phase journey. If you are in or completed phase I, then that means there is a phase II, a phase III, and so on.

– Align people & processes.  Mistakes will happen, “the tech side is only 50% of DX” – Aras CEO.

Here I agree with Peter on the business side, be it that some of the current market leaders are already digital. Look at Apple, Google, and Amazon. However, the majority of large enterprises have severe problems with various aspects of a digital transformation as the started in the past before digital technologies became affordable..

Digitization allows information to flow without barriers within an organization, leading to rapid insights and almost direct communication with your customers, your supply chain or other divisions within your company. This drives the need to learn and build new, lean processes and get people aligned to them. Learning to work in a different mode.

And this is extremely difficult for a market leader – as market leader fear for the outside changing world is often not felt. Between the C-level vision and people working in the company, there are several layers of middle management. These layers were created to structure and stabilize the old ways of working.

I wrote about the middle management challenge in my last blog post: The Middle Management dilemma. Almost in the same week there was an article from McKinsey: How companies can help midlevel managers navigate agile transformations.
Conclusion: It is not (only) about technology as some of the tech geeks may think.

Conclusion

Behind the myths addressed by Peter Schroer, there is a complex transformation on-going. Probably not a metamorphosis. With the Easter spirit in mind connected to PLM, I believe digital transformations are possible – Not as a miracle but driven by insights into all aspects. I hope this post gave you some more ideas and please read the connected articles – they are quite relevant if you want to discover what’s below the surface.

Image:  21stcenturypublicservant.wordpress.com/

I have talked a lot the past years about Digital Transformation and in particular its relation to PLM. This time I want to focus a little more on Digital Transformation and my observations related to big enterprises and small and medium enterprises. I will take you starting from the top, the C-level to the work floor and then try to reconnect through the middle management. As you can imagine from the title of this post, there is a challenge. And I am aware I am generalizing for the sake of simplicity.

Starting from the C-level of a large enterprise

Large and traditional enterprises are having the most significant challenge when aiming at a digital transformation for several reasons:

  • They have shareholders that prefer short-term benefits above long-term promising but unclear higher benefits. Shareholders most of the time have no personal interest in these companies, they just want to earn money above the average growth.
  • The CEO is the person to define the strategy which has to come with a compelling vision to inspire the shareholders, the customers and the employees in the company – most of the time in that order of priority.
  • The role of the CEO is to prioritize investments and stop or sell core components to make the transformation affordable. Every transformation is about deciding what to stop, what to start and what to maintain.
  • After four to seven years (the seven years’ itch) it is time for a new CEO to create a new momentum as you cannot keep the excitement up too long.
  • Meanwhile, the Stop-activities are creating fear within the organization – people start fearing their jobs and the start-activities are most of the time of such a small-scale that their successes are not yet seen. So at the work floor, there will be reservations about what’s next

Companies like ABB, Ericsson, GE, Philips – in alphabetical order – are all in several stages of their digital transformation and in particular I have followed GE as they were extremely visible and ambitious. Meanwhile, it is fair to say that the initial Digital Transformation plan from GE has stalled and a lot of lessons learned from that.

If you have time – read this article: The Only Way Manufacturers Can Survive – by Vijay Govindarajan & Jeff Immelt (you need to register). It gives useful insights about what the strategy and planning were for digital transformation. And note PLM is not even mentioned there J

Starting from the C-level of a small and medium enterprise

In a small or medium enterprise, the distance between the C-level and the work floor is most of the time much shorter and chances are that the CEO is a long-term company member in case of a long-standing family-owned business. In this type of companies, a long-term vision can exist and you could expect that digital transformation is more sustainable there.

Unfortunate most of the time it is not, as the C-level is often more active in current business strategies and capabilities close to their understanding instead of investing energy and time to digest the full impact of a digital transformation. These companies might invest in the buzz-words you hear in the market, IoT, Digital Twins and Augmented Reality/Virtual Reality, all very visionary topics, however of low value when they are implemented in an isolated way.

In this paragraph, I also need to mention the small and medium enterprises that are in the hands of an investment company.  Here I feel sorry as the investment company is most of the time trying to optimize the current ways of working by simplifying or rationalizing the business, not creating a transformative vision (as they do not have the insights. In this type of companies, you will see on a lower scale the same investments done as in the other category of small and medium enterprises, be it on a lesser scale.

Do people need to change?

Often you hear that the problem with any change within the companies is because people do not want to change. I think this is too much a generalization. I have worked in the past five years with several companies where we explored the benefits and capabilities of PLM in a modern way, sometimes focusing on an item-centric approach, sometimes focusing on a model-based approach. In all these engagements there was no reluctance from the users to change.

However, there were two types of users in these discussions. I would characterize as evolutionary thinkers (most of the time ten years or more in the company) and love-to-change thinkers (most of them five years or less in the company). The difference between these groups was that the evolutionary thinkers were responding in the context of the existing business constraints where the love-to-change thinkers were not yet touched by the “knowledge how good everything was”.

For digital transformation, you need to create the love-to-change attitude while using the existing knowledge as a base to improve. And this is not a people change, it is an organizational change where you need to enable people to work in their best mode. It needs to be an end-to-end internal change – not changing the people, but changing the organizational parameters: KPIs, divisions, departments, priorities. Have a look at this short movie, you can replace the word ERP by PLM, and you will understand why I like this movie (and the relaxing sound)

The Middle Management dilemma

And here comes my last observation. At the C-level we can find inspiring visions often outcome-based, talking about a more agile company, closer to the customer, empowered workers, etc.  Then there is the ongoing business that cannot be disrupted and needs to perform – so the business units, the departments all get their performance KPIs, merely keeping the status quo in place.

Also, new digital initiatives need to be introduced. They don’t fit in the existing business and are often started in separation – like GE Digital division, and you can read Jeff Immelt’ s thoughts and strategy how this could work. (The Only Way Manufacturers Can Survive). However as the majority of the business runs in the old mode, the Digital Business became another business silo in the organization, as the middle management could not be motivated to embed digital in their business (no KPIs or very low significance of new KPIs)

I talked about the hybrid/bimodal approach several times in my blog posts, most recently in The Challenges of a Connected Ecosystem.  One of the points that I did not address was the fact that probably nobody wants to work in the old mode anymore once the new approach is successful and scaled up.

When the new mode of business is still small, people will not care so much and continue business as usual. Once the new mode becomes the most successful part of the company, people do want to join this success if they can. And here the change effort is needed. An interesting article in this context is The End of Two-Speed IT from the Boston Consultancy Group (2016). They already point at the critical role of middle management. Middle management can kill digital transformation or being part of it, by getting motivated and adopting too.

Conclusion

Perhaps too much text in this post and even more content when you dive more in-depth in the provided content. Crucial if you want to understand the digital transformation process in an existing company and the critical place of middle management. They are likely the killers of digital transformation if not give the right coaching and incentives.  Just an observation – not a thought 😉

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