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Two weeks ago, I wrote about the PLM Innovation Forum, a virtual conference organized by TECHNIA, where I described some of my experiences with the event and the different ways of interaction in a virtual conference.

The content remains available till May 31st, so I had time to stroll through the rich content offered. In particular, if you are already familiar with the Dassault Systèmes & TECHNIA offerings, the content is extremely rich.

From the “auditorium“, I selected four presentations that have a logical relation to each other. I believe they will help you understand some of the aspects of PLM independent of the PLM vendor. Let’s start.

Value-Driven Implementation

In this session, Johannes Storvik, you can identify three parts. In the first part, Johannes talks about how to select the best PLM-approach, discussing the various options from custom, standardized, or even fully Out-Of-The-Box, comparing these options with building types. An interesting comparison, however, there is a risk with this approach.

Many companies are now stating they only need a collection of Commercial of the Shelf (COTS) systems and prefer only OOTB. The challenge with this approach is that you start from the tools, constraining the business from the start.

I would state start from your business goals, and ultimately they will lead to requirements for the tools. And then, if available, you find solutions that require no or minor adaptation. Starting from the business is crucial, and Johannes elaborates more on that.

The second part discussing PLM benefits, and if you are looking for confirmation PLM brings value, have a look at the topics, areas, and numbers mentioned. Most benefits and areas are quite traditional, related to a coordinated organization (if you follow my coordinated to connected typology).

The last part, connecting the dots from business to enablers, a Benefits Dependency Network, is a methodology that I recommend. Originally developed by Cranfield School of Management, it allows you to connect your PLM-needs to the company’s business needs and strategies. You can read more about this methodology in this HBR article: A tool to map your next digital initiative.

Benefits Dependency Network: note the potential storyline you can build

My experience from this methodology is that it allows you to extract one, two perhaps three storylines. These storylines then help you to explain why the PLM enablers are needed connecting to a business case into one understandable storyline, suitable for all levels in the company

With Johannes, we went from PLM-characteristics towards connecting PLM to the business and exec management, making PLM implicit visible at the management level. Now the next step.

Industrialization of the Construction Industry

The theme of this session might be misleading. Arto Tolonen, from the LETHO group, has a long history in PLM as a practitioner and at the University of Oulu, where he specialized in Product Data Management and Product Portfolio Management.

The last part of his presentation is dealing with transformational thinking for the construction industry from a one-off construction towards thinking in repeatable processes, using PLM practices. With his dry humor, he asks:
“Why are all buildings prototypes ?” and more.

For many years, I have been preaching PLM practices to be valuable for other industries too. See this 2013 post: PLM for all industries?  The most common challenge was to respond to the question:  “What does your tool do?”   PLM practices only become valuable if you think in repeatable processes.

The exciting part is when Arto talks about the disconnect between the exec level in an organization and reality in the field. Understanding how products are performing, and how each product contributes to the profit of the company, is usually blurred with subjective information. Your company’s love baby might be the worst performer but never dropped from the product portfolio for sentimental reasons.

Arto explains the importance of (digital) portfolio management, connecting the economic data with the technical data. And by doing so, use portfolio management to drive the development of new offerings based on market needs and numbers. Or to decommission products.

I am fully aligned with Arto and believe that a digital transformation should include a connected product portfolio management environment, driving new development projects. Product Portfolio management is not the same as BOM-management.

The portfolio items are facing the outside world, your customers. How the products are built, is defined in the inside world of BOMs and design data.

Now combining product portfolio management with product management makes a lot of more sense if you are going to use it to support the modularization of your products. Based on solution platforms, you can design your products to become modular, leading to a lot of business benefits.

With Arto, we discovered the need to have digital portfolio management connecting business performance and product development. Another implicit reason for PLM to your business explained with humor. Now the next step.

Modularization

Closely related to product portfolio management is the topic of modularization.  If you want to optimize your offering with a great variety of choices for your customers, without spending more time to develop an individual solution, you need to implement modularization for your products.

Daniel Strandhammar van Brick Strategy explains this topic in his session. So many companies I am working with a claim that they want to move from and ETO (Engineering To Order) model to a CTO (Configure To Order) model. Unfortunately, many of them keep on talking about that without making steps towards more configurable products.

Although in many PLM-infrastructures, the capabilities exist to support the modularity of a product portfolio, it requires thinking and analysis outside the tools. The tools are there to support the modularization. Still, it depends on your engineering teams to transform the company’s portfolio step by step into a more modular product.  Brick Strategy is typical such a company that can help you and coach you in a modularization process.

If you look at the benefits Daniel is mentioning related to modularization, these benefits are significant. However, as Daniel also explains per type of business, the effects of modularization might be different, still in every situation worth to invest.

It is interesting to know that many of the modularization methodologies come from Scandinavian countries. Perhaps a region, with companies like Scania (master of modularization), IKEA and others leading the ways towards modularization. Is it a surprise that LEGO is also a Scandinavian company?

Daniel continues by explaining how a roadmap for modularization could look like. If you are struggling with that point, have a look at the video. It is a crucial part of the story.

Note: There is also a presentation from Anders Malmberg fro Scania talking about their Starling project. Not particularly related to modularization, more related to how to organize significant PLM transformations.

With Daniel’s presentation, we see the relation between a product portfolio and modularization. Another implicit reason for PLM to improve your business explained. Now let’s do it.

 

Making Multi-view BOM a reality

My ultimate dream was that James Roche from CIMdata would complete the storyline. We went from business initiatives through product portfolio management and modularization through a flow of organizational topics to enhance your business outcome using PLM.

With James, I was hoping we now would get the final necessary part, the need for a multi-view BOM, and how to establish this. As I mentioned before with modularization, many companies started with a kind of ETO-approach to deliver solutions for their customers. The downside of this approach is that, when designing a product, the manufacturing process was already leading the way the BOM will be structured. Many of the companies that I work with are in this situation. There is no clear EBOM and MBOM, the situation is a kind of hybrid BOM, blocking modularity and multi-plant manufacturing.

James’s presentation unfortunate started with a 10 min technical delay, and then the next part is crucial to understand. He explains nicely what it means to have a “hybrid” single BOM and more to a multi-view EBOM/MBOM. James addressed this topic, both using an example looking at it from a technological and organizational view.

As James is the CIMdata Practice Director for Aerospace & Defense, this was the industry in focus and even example provided above is not necessarily the best solution for every A&D company. Organizational change and managing risks are crucial in such a transition, and that is where James spent even more time. It would be great, and I consider it one of my next blog options, to discuss and share best practices for other types of industries. Is there always a need for a multi-view BOM and are they all the same?

With James we concluded the PLM value story, making it my fourth pick of the PLMIF conference, giving you an end-to-end storyline why PLM is important and how it is connected to your business results.

 

Conclusion

The four presentations that I highlighted here show a storyline that is crucial to understand and pitch when you talk about the business value of PLM. It is not about technical features and functions. It is part of a business strategy, building the right portfolio, manage it in a modular manner, and use multiple BOM views to optimize the delivery of your products.

 

Note: two more weeks to see the full presentations of PLMIF – go and have a look in case you haven’t done so: http://www.plmif.org

 

 

 

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.

I was happy to take part at the PI PLMx London event last week. It was here and in the same hotel that this conference saw the light in 2011  – you can see my blog post from that event here: PLM and Innovation @ PLMINNOVATION 2011.

At that time the first vendor-independent PLM conference after a long time and it brought a lot of new people together to discuss their experience with PLM. Looking at the audience that time, many of the companies that were there, came back during the years, confirming the value this conference has brought to their PLM journey.

Similar to the PDT conference(s) – just announced for this year last week – here – the number of participants is diminishing.

Main hypotheses:

  1. the PLM-definition has become too vague. Going to a PLM conference does not guarantee it is your type of PLM discussions you expect to see?
  2. the average person is now much better informed related to PLM thanks to the internet and social media (blogs/webinars/ etc.) Therefore, the value retrieved from the PLM conference is not big enough any more?
  3. Digital Transformation is absorbing all the budget and attention downstream the organization not creating the need and awareness of modern PLM to the attention of the management anymore. g., a digital twin is sexier to discuss than PLM?

What do you think about the above three hypotheses – 1,2 and/or 3?

Back to the conference. The discussion related to PLM has changed over the past nine years. As I presented at PI from the beginning in 2011, here are the nine titles from my sessions:

2011       PLM – The missing link
2012       Making the case for PLM
2013       PLM loves Innovation
2014       PLM is changing
2015       The challenge of PLM upgrades
2016       The PLM identity crisis
2017       Digital Transformation affects PLM
2018       PLM transformation alongside Digitization
2019       The challenges of a connected Ecosystem for PLM

Where the focus started with justifying PLM, as well as a supporting infrastructure, to bring Innovation to the market, the first changes became visible in 2014. PLM was changing as more data-driven vendors appeared with new and modern (metadata) concepts and cloud, creating the discussion about what would be the next upgrade challenge.

The identity crisis reflected the introduction of software development / management combined with traditional (mechanical) PLM – how to deal with systems? Where are the best practices?

Then from 2017 on until now Digital Transformation and the impact on PLM and an organization became the themes to discuss – and we are not ready yet!

Now some of the highlights from the conference. As there were parallel sessions, I had to divide my attention – you can see the full agenda here:

How to Build Critical Architecture Models for the New Digital Economy

The conference started with a refreshing presentation from David Sherburne (Carestream) explaining their journey towards a digital economy.  According to David, the main reason behind digitization is to save time, as he quoted Harvey Mackay an American Businessman and Journalist,

Time is free, but it is priceless. You cannot own it, but you can use it. You can’t keep it, but you can spend it. Once you have lost it, you never can get it back

I tend to agree with this simplification as it makes the story easy to explain to everyone in your company. Probably I would add to that story that saving time also means less money spent on intermediate resources in a company, therefore, creating a two-sided competitive advantage.

David stated that today’s digital transformation is more about business change than technology and here I wholeheartedly agree. Once you can master the flow of data in your company, you can change and adapt your company’s business processes to be better connected to the customer and therefore deliver the value they expect (increases your competitive advantage).

Having new technology in place does not help you unless you change the way you work.

David introduced a new acronym ILM (Integrated Lifecycle Management) and I am sure some people will jump on this acronym.

David’s presentation contained an interesting view from the business-architectural point of view. An excellent start for the conference where various dimensions of digital transformation and PLM were explored.

Integrated PLM in the Chemical industry

Another interesting session was from Susanna Mäentausta  (Kemira oy)  with the title: “Increased speed to market, decreased risk of non-compliance through integrated PLM in Chemical industry.” I selected her session as from my past involvement with the process industry, I noticed that PLM adoption is very low in the process industry. Understanding Why and How they implemented PLM was interesting for me. Her PLM vision slide says it all:

There were two points that I liked a lot from her presentation, as I can confirm they are crucial.

  • Although there was a justification for the implementation of PLM, there was no ROI calculation done upfront. I think this is crucial, you know as a company you need to invest in PLM to stay competitive. Making an ROI-story is just consoling the people with artificial number – success and numbers depend on the implementation and Susanna confirmed that step 1 delivered enough value to be confident.
  • There were an end-to-end governance and a communication plan in place. Compared to PLM projects I know, this was done very extensive – full engagement of key users and on-going feedback – communicate, communicate, communicate. How often do we forget this in PLM projects?

Extracting More Value of PLM in an Engineer-to-Order Business

Sami Grönstrand & Helena Gutierrez presented as an experienced duo (they were active in PI P PLMx Hamburg/Berlin before) – their current status and mission for PLM @ Outotec. As the title suggests, it was about how to extract more value from PL M, in an Engineering to Order Business.

What I liked is how they simplified their PLM targets from a complex landscape into three story-lines.

If you jump into all the details where PLM is contributing to your business, it might get too complicated for the audience involved. Therefore, they aligned their work around three value messages:

  • Boosting sales, by focusing on modularization and encouraging the use of a product configurator. This instead of developing every time a customer-specific solution
  • Accelerating project deliverables, again reaping the benefits of modularization, creating libraries and training the workforce in using this new environment (otherwise no use of new capabilities). The results in reducing engineering hours was quite significant.
  • Creating New Business Models, by connecting all data using a joint plant structure with related equipment. By linking these data elements, an end-to-end digital continuity was established to support advanced service and support business models.

My conclusion from this session was again that if you want to motivate people on a PLM-journey it is not about the technical details, it is about the business benefits that drive these new ways of working.

Managing Product Variation in a Configure-To-Order Business

In the context of the previous session from Outotec, Björn Wilhemsson’s session was also addressing somehow the same topic of How to create as much as possible variation in your customer offering, while internally keep the number of variants and parts manageable.

Björn, Alfa Laval’s OnePLM Programme Director, explained in detail the strategy they implemented to address these challenges. His presentation was very educational and could serve as a lesson for many of us related to product portfolio management and modularization.

Björn explained in detail the six measures to control variation, starting from a model-strategy / roadmap (thinking first) followed by building a modularized product architecture, controlling and limiting the number of variants during your New Product Development process. Next as Alfa Laval is in a Configure-To-Order business, Björn the implementation of order-based and automated addition of pre-approved variants (not every variant needs to exist in detail before selling it), followed by the controlled introduction of additional variants and continuous analysis of quoted and sold variant (the power of a digital portfolio) as his summary slides shows below:

Day 1 closed with an inspirational keynote; Lessons-Learnt from the Mountaineering Experience 8848 Meter above sea level  – a mission to climb the highest mountain on each of the continents in 107 days – 9 hours – setting a new world record by Jonathan Gupta.

There are some analogies to discover between his mission and a PLM implementation. It is all about having the total picture in mind. Plan and plan, prepare step-by-step in detail and rely on teamwork – it is not a solo journey – and it is about reaching a top (deliverable phase) in the most efficient way.

The differences: PLM does not need world records, you need to go with the pace an organization can digest and understand. Although the initial PLM climate during implementation might be chilling too, I do not believe you have to suffer temperatures below 50 degrees Celsius.

During the morning, I was involved in several meetings, therefore unfortunate unable to see some of the interesting sessions at that time. Hopefully later available on PI.TV for review as slides-only do not tell the full story. Although there are experts that can conclude and comment after seeing a single slide. You can read it here from my blog buddy Oleg Shilovitsky’s post : PLM Buzzword Detox. I think oversimplification is exactly creating the current problem we have in this world – people without knowledge become louder and sure about their opinion compared to knowledgeable people who have spent time to understand the matter.

Have a look at the Dunning-Kruger effect here (if you take the time to understand).

 

PLM: Enabling the Future of a Smart and Connected Ecosystem

Peter Bilello from CIMdata shared his observations and guidance related to the current ongoing digital business revolution that is taking place thanks to internet and IoT technologies. It will fundamentally transform how people will work and interact between themselves and with machines. Survival in business will depend on how companies create Smart and Connected Ecosystems. Peter showed a slide from the 2015 World Economic Forum (below) which is still relevant:

Probably depending on your business some of these waves might have touched your organization already. What is clear that the market leaders here will benefit the most – the ones owning a smart and connected ecosystem will be the winners shortly.

Next, Peter explained why PLM, and in particular the Product Innovation Platform, is crucial for a smart and connected enterprise.  Shiny capabilities like a digital twin, the link between virtual and real, or virtual & augmented reality can only be achieved affordably and competitively if you invest in making the source digital connected. The scope of a product innovation platform is much broader than traditional PLM. Also, the way information is stored differs – moving from documents (files) towards data (elements in a database).  I fully agree with Peter’s opinion here that PLM is conceptually the Killer App for a Smart & Connected Ecosystem and this notion is spreading.

A recent article from Forbes in the category Leadership: Is Your Company Ready For Digital Product Life Cycle Management? shows there is awareness.  Still very basic and people are still confused to understand what is the difference with an electronic file (digital too ?) and a digital definition of information.

The main point to remember here: Digital information can be accessed directly through a programming interface (API/Service) without the need to open a container (document) and search for this piece of information.

Peter then zoomed in on some topics that companies need to investigate to reach a smart & connected ecosystem. Security (still a question hardly addressed in IoT/Digital Twin demos), Standards and Interoperability ( you cannot connect in all proprietary formats economically and sustainably) A lot of points to consider and I want to close with Peter’s slide illustrating where most companies are in reality

The Challenges of a Connected Ecosystem for PLM

I was happy to present after Peter Bilello and David Sherburne (on day 1) as they both gave a perspective on digital transformation complementary to what I submitted. My presentation was focusing on the incompatibility of current coordinated business systems and the concept of a connected ecosystem.

You can already download my slides from SlideShare here: The Challenges of a Connected Ecosystem for PLM . I will explain my presentation in an upcoming blog post as slides without a story might lead to the wrong interpretation, and we already reached 2000 words. Few words to come.

How to Run a PLM Project Using the Agile Manifesto

Andrew Lodge, head of Engineering Systems at JCB explained how applying the agile mindset towards a PLM project can lead to faster and accurate results needed by the business. I am a full supporter for this approach as having worked in long and waterfall-type of PLM implementations there was always the big crash and user dissatisfaction at the final delivery. Keeping the business involved every step seems to be the solution. The issue I discovered here is that agile implementation requires a lot of people, in particular, business, to be involved heavily. Some companies do not understand this need and dropped /reduced business contribution to the least, killing the value of an agile approach

 

Concluding

For me coming back to London for the PI PLMx event was very motivational. Where the past two, three conferences before in Germany might have led to little progress per year, this year, thanks to new attendees and inspiration, it became for me a vivid event, hopefully growing shortly. Networking and listening to your peers in business remains crucial to digest it all.

 

According to LinkedIn, there are over a 7500 PLM consultants in my network.  It is quite an elite group of people as I have over 100.000 CEOs in my network according to LinkedIn. Being a CEO is a commodity.

PLM consultants share a common definition, the words Product Lifecycle Management. However, what we all mean by PLM is one of the topics that has evolved over the past 19 years in a significant way.

PLM or cPDM (collaborative PDM)?

In the early days, PLM was considered as an engineering tool for collaboration, either between global subsidiaries or suppliers. The main focus of PLM was to bring engineering information to manufacturing in a controlled way. PLM and cPDM, often seen as solving the same business needs as the implementation of a PLM system most of the time got stuck at the cPDM level.

Main players at that time were Dassault Systemes, UGS (later Siemens PLM) and PTC – their solutions were MCAD-driven with limited scope – bringing engineering information towards manufacturing in a coordinated way.

PLM was not really an approach that created visibility at the management level of a company. How do you value and measure collaboration? Because connectivity was expensive in the early days of PLM, combined with the idea that PLM systems needed to be customized, PLM was framed as costly and hard to deliver value.

Systems Engineering and New Product Introduction

Then, 2005 and beyond, thanks to better connectivity and newcomers in the PLM market, the solution landscape from PLM became broader.  CAD integrations were not a necessary part of the PLM scope according to these newcomers as they focused on governance (New Product Introduction), Bill of Materials or at the front-end of the product design cycle, connecting systems engineering by adding requirements management to their PLM suite.

New players in this domain where SAP, Aras, followed by Autodesk – their focus was more metadata-driven, connection and creating an end-to-end data flow for the product. Autodesk started the PLM and cloud path.

These new capabilities brought a broader scope for PLM indeed. However, they also strengthened the idea that PLM is there for engineers. For the management too complicated, unless they understood the value of coordinated collaboration. Large enterprises saw the benefits of having common processes for PLM as an essential reason to invest in PLM. The graph below showed the potential of PLM, where the shaded area indicates the potential revenue benefits.

Still, this graph does not create “hard numbers,” and it requires visionaries to get a PLM implementation explained and justified across the board.  PLM is framed as expensive even if the budgets spent on PLM are twenty percent or less compared to ERP implementations. As PLM is not about transactional data, the effects of PLM are hard to benchmark. Success has many fathers, and in case of difficulties, the newcomer is to blame.

PLM = IoT?

With the future possibilities, connectivity to the machine-level (IoT or IIoT), a new paradigm related to PLM was created by PTC.  PLM equals IoT – read more here.

Through IoT, it became possible to connect to products/assets in the field, and the simplified message from PTC was that now thanks to IoT (read ThingWorx) PLM was now really possible, releasing traditional PLM out of its engineering boundaries. The connected sensors created the possibility to build and implement more advanced and flexible manufacturing processes, often called Smart Manufacturing or Industrie 4.0.

None of the traditional PLM vendors is talking about PLM solely anymore. Digital transformation is a topic discussed at the board level, where GE played a visionary role with their strong message for change, driven by their CEO Jeff Immelt at that time – have a look at one of his energizing talks here.

However is PLM part of this discussion?

Digital Transformation opened a new world for everyone. Existing product lifecycle concepts could be changed, products are becoming systems, interacting with the environment realized through software features. Systems can be updated/upgraded relatively fast, in particular when you are able to watch and analyze the performance of your assets in almost real-time.

All consultants (me included) like to talk about digital transformation as it creates a positive mood towards the future, imagining everything that is possible. And with the elite of PLM consultants we are discovering the new roles of PLM – see picture below:

Is PLM equal to IoT or Digital Transformation?

I firmly believe the whole Digital Transformation and IoT hypes are unfortunately obfuscating the maximum needs for a digital enterprise. The IoT focus only exposes the last part of the lifecycle, disconnected from the concept and engineering cycles – yes on PowerPoint slides there might be a link. Re-framing PLM as Digital Transformation makes is even vaguer as we discussed during the CIMdata / PDT Europe conference last October. My main argument: Companies fail to have a link with their digital operations and dreams because current engineering processes and data, hardware (mechanical and electronics) combined with software are still operating in an analog, document-driven mode.

PLM = MBSE?

However what we also discussed during this conference was the fact that actually there is a need for an end-to-end model-based systems engineering infrastructure to support the full product lifecycle. Don Farr’s (Boeing) new way to depict the classical systems engineering “V” also hinted into that direction. See the image below – a connected environment between the virtual modeled word and the physical world at any time of the product lifecycle

So could MBSE be the new naming for PLM?

The problem is as Peter Bilello also mentioned during the CIMdata/PDT conference is that the word “ENGINEERING” is in Model-Based Systems Engineering. Therefore keeping the work what the PLM “elite” is doing again in the engineering box.

So perhaps Model-Based Enterprise as the new name?

Unfortunate MBE has already two current definitions – look here and here. Already too much confusion, and there a lot of people who like confusion. See Model-Based – The confusion. So any abbreviation with Model-Based terminology in it will not get attention at the board level. Even if it is crucial the words, Model-Based create less excitement as compared to Digital Twin, although the Digital Twin depends on a model-based approach.

Conclusion

Creating and maintaining unique products and experiences for their customers is the primary target of almost every company. However, no easy acronym that frames these aspects to value at the board level. Perhaps PID – the Product Innovation Diamond approach will be noticed? Your say ….

 

Perhaps an ambiguous title this time as it can be interpreted in various ways. I think that all these interpretations are one of the most significant problems with PLM. Ambiguity everywhere. Its definition, its value and as you might have noticed from the past two blog posts the required skill-set for PLM consultants.

As I am fine-tuning my presentation for the upcoming PLMx 2018 Event in Hamburg, some things become clearer for me. This is one of the advantages of blogging, speaking at PLM conferences and discussing PLM with companies that are eager to choose to right track for PLM. You are forced to look in more depth to be consistent and need to have arguments to support your opinion about what is happening in the scope of PLM. And from these learnings I realize often that the WHY PLM remains a big challenge for various reasons.

Current PLM

In the past twenty years, companies have implemented PLM systems, where the primary focus was on the P (Product) only from Product Lifecycle Management. PLM systems have been implemented as an engineering tool, as an evolution of (Product Data Management).

PLM systems have never been designed from the start as an enterprise system. Their core capabilities are related to engineering processes and for that reason that is why most implementations start with engineering.  Later more data-driven PLM-systems like Aras and Autodesk have begun from another angle, data connectivity between different disciplines as a foundation, avoiding to get involved with the difficulty of engineering first.

This week I saw the publication of the PLMPulse survey results by i42R / MarketKey where they claim:

The results from first industry-led survey on our status of Product Lifecycle Management and future priorities

The PLMPulse report is based on five different surveys as shown in the image above. Understanding the various aspects of PLM from usage, business value, organizational constraints, information value and future potential. More than 350 people from all around the world answered the various questions related to these survey.  Unfortunate inputs from some Asian companies are missing. We are all curious what happens in China as there, companies do not struggle with the same legacy related to PLM as other countries. Are they more embracing PLM in a different way?

The results as the editors also confirm, are not shocking and confirming that PLM has the challenge to get out of the engineering domain. Still, I recommend downloading the survey as it has interesting details. After registration you can download the report from here.

What’s next

During the upcoming PLMx 2018 Hamburg conference there will be a panel discussion where the survey results will be discussed. I am afraid that this debate will result again in a discussion where we will talk about the beauty and necessity of PLM and we wonder why PLM is not considered crucial for the enterprise.

There are a few challenges I see for PLM and hopefully they will be addressed. Most discussions are about WHAT PLM should/could do and not WHY.  If you want to get to the WHY of PLM, you need to be able to connect the value of PLM to business outcomes that resonate at C-level. Often PLM implementations are considered costly and ROI and business value are vague.

As the PLMPulse report also states, the ROI for PLM is most of the time based on efficiency and cost benefits related to the current way of working. These benefits usually do not offer significant ROI numbers. Major benefits come for working in a different way and focusing on working closer to your customer. Business value is hard to measure.

How do you measure the value of multidisciplinary collaboration or being more customer-centric? What is the value of being better connected to your customer and being able to react faster? These situations are hard to prove at the board level, as here people like to see numbers, not business transformations.

Focus on the WHY and HOW

A lot of the PLM messages that you can read through various marketing or social channels are related to futuristic concepts and high-level dreams that will come true in the next 10-20 years. Most companies however have a planning horizon of 2 years max 5 years. Peter Bilello from CIMdata presented one of their survey results at the PDT conference in 2014, shown below:

Technology and vision are way ahead of reality. Even the area where the leaders focusing the distance between technology and vision gets bigger. The PLM focus is more down-to-earth and should not be on what we are able to do, but the focus should be on what would be the next logical step for our company to progress to the future.

System of Record and System of Engagement

At the PLMx conference I will share my experiences related to PLM transformations with the audience. One and a half-year ago we started talking about the bi-modal approach. Now more and more I see companies adopting the concepts of bi-modal related to PLM.  Still most organizations struggle with the fact that their PLM should be related to one PLM system or one PLM vendor, where I believe we should come to the conclusion that there are two PLM modes at this moment. And this does not imply there need to be only one or two systems – it will become a federated infrastructure.

Current modes could be an existing PLM backbone, focusing on capturing engineering data, the classical PLM system serving as a system of record. And a second, new growing PLM-related infrastructure which will be a digital, most likely federated, platform where modern customer-centric PLM processes will run. As the digital platform will provide real-time interaction it might be considered as a system of engagement, complementary to the system of record.

It will be the system of engagement that should excite the board members as here new ways of working can be introduced and mastered. As there are no precise blueprints for this approach, this is the domain where innovative thinking needs to take place.

That’s why I hope that neutral PLM conferences will less focus on WHAT can be done. Discussions like MBSE, Digital Thread, Digital Twin, Virtual Reality / Augmented Reality are all beautiful to watch. However, let’s focus first on WHY and HOW. For me besides the PLMx Hamburg conference, other upcoming events like PDT 2018 (this time in the US and Europe) are interesting events and currently PDT the call for papers is open and hopefully we  find speakers that can teach and inspire.

CIMdata together with Eurostep are organizing these events in May (US) and October (Europe). The theme for the CIMdata roadmap conference will be “Charting the Course to PLM Value together – Expanding the value footprint of PLM and Tackling PLM’s Persistent Pain Points” where PDT will focus on Collaboration in the Engineering Supply Chain – the extended digital thread.  These themes need to be addressed first before jumping into the future. Looking forward to meeting you there.

 

Conclusions

In the world of PLM, we are most of the time busy with explaining WHAT we (can/will) do. Like a cult group sometimes we do not understand why others do not see the value or beauty of our PLM concepts. PLM dialogues and conferences should therefore focus more on WHY and HOW. Don’t worry, the PLM vendors/implementers will always help you with WHAT they can do and WHY it is different.

 

myplmSorry guys, I am aware of the fact that the definition of PLM is very ambiguous. Every vendor, implementor and probably PLM consultant has a favorite definition. Just to illustrate this statement,  read Brain Soaper´s recent post: What are the top 5 things to know about PLM ?

Interesting Brian starts with stating the definition of PLM is priority #1, however as you can see from the comment session, it is all about having inside your company a common definition of PLM.

And now I start writing about digital PLM, again a definition. You might have read in my blog about classical PLM and modern PLM.

Classical PLM

classical PLMFor me, classical PLM is the way PLM has been implemented in the past 15 years, often as an extension of engineering with the purpose of centralizing and sharing information.

In particular for CAD data, classical PLM is focusing on managing files in a controlled way, through check-in and check-out mechanisms. On top of file management, classical PLM provides more data-driven functionality, like project management, process governance (workflows / approvals / ECx processes) and BOM management (to link to ERP).

Classical PLM can still bring great benefits to a company as time for searching, paper-based processes and data retyping in ERP can be avoided, leading to reuse and fewer errors. The ROI time for a classical PLM implementation lays between two years to three years; my observations from the past. This time can still vary a lot as not every company or implementor/vendor uses the ideal approach to implement PLM, due to cultural issues, wrong expectations or lack of experience from both parties.

The connotations I have with classical PLM are:
linear, rigid, mechanical,(old) automotive, previous century

Modern PLM = Digital PLM

InfoInContextModern PLM is based on the vision that all information should be managed and stored as data objects, not necessary in a single system. Still the PLM infrastructure, using structured and unstructured data, should give each user in the organization with almost real-time information in context of other relevant information.

My non-stop blog buddy Oleg recently wrote a post in that context: Data as a platform & future manufacturing intelligence. Oleg is nicely describing some of the benefits of a data-driven approach.

Accenture provides insight with their infographic related to Digital PLM. Read it here as it is very concise and gives you a quick impression what Digital PLM means for an organization. Here is my favorite part, showing the advantages.

accenture digital PLM

The substantial advantages from digital PLM are all coming from the fact that information is stored as data objects, all having their individual versions, relations and status. The advantage of data elements is that they are not locked in a document or specific file format. Information can flow to where or whom needed without translation.

The connotations I have with digital PLM are:
real-time, data continuity, flexible, software and future.

 

Still some caution:

Reported ROI numbers for digital PLM are significant larger than classical PLM and I observed some facets of that. Digital PLM is not yet established and requires a different type of workforce. See other blog post I wrote about this theme: Modern PLM brings Power to the People.

But what about digital PLM – where is the word digital relevant ?

ETO – model-based engineering

Where to focus first depends very much on your company´s core business process. Companies with an Engineering To Order (ETO) process will focus on delivering a single product to their customer and most of the time the product is becoming more like a system, interacting with the outside world.

Big challenges in ETO are to deliver the product as required, to coordinate all disciplines preferable in a parallel and real-time manner – in time – on budget. Here a virtual model that can be accessed and shared with all stakeholders should be the core. The construction industry is introducing BIM for this purpose (a modern version of DMU). The virtual model allows the company to measure progress, to analyze and simulate alternatives without spending money for prototypes. In the ideal world engineering and simulation are done on the same model, not losing time and quality on data translations and iterations.

The virtual model linked to requirements, functions and the logical definition allows virtual testing – so much cheaper and faster and therefore cost efficient. Of course this approach requires a change in how people work together, which is characteristic for any digital business. Breakdown the silos.

Typical industries using the ETO model: Construction, Energy, Offshore, Shipbuilding, Special Equipment

 

CTO – model-based manufacturing

In a Configure To Order (CTO) business model you do not spend time for engineering anymore. All options and variants are defined and now the focus is on efficient manufacturing. The trend for CTO companies is that they have to deliver more and more variants in a faster and more demanding global market. Here the connectivity between engineering data and manufacturing data becomes one of the cornerstones of digital PLM. Digital PLM needs to make sure that all relevant data for execution (ERP and MES) is flowing through the organization without reformatting or reworking the data.

The digital thread is the dream. Industry 4.0 is focusing on this part. Also in the CTO environment it is crucial to work with a product model, so all downstream disciplines can consume the right data. Although in CTO the company´s attention might go to MES and ERP, it is crucial that the source of the product model is well specified and under control from (dgital) PLM.

Typical CTO industries are: Automotive, Consumer Goods, High-Tech, Industrial Equipment

BTO – models everywhere

flexibleIf your company has a Build To Order main delivery process, the optimum for digital PLM lies in the middle of ETO and CTO, depending on the type of products your company delivers.

In BTO there is always engineering to do. It can be customer specific engineering work (only once) or it can be changing/ adding new features to the product.

Modularity of the product portfolio might be the answer for the first option, where the second option requires strong configuration management on the engineering side, similar to the ETO model. Although the dream of many BTO companies is to change a CTO company, I strongly believe change in technology and market requirements will always be faster than product portfolio definition.

pointETO, BTO and CTO are classical linear business models. The digital enterprise is changing these models too. Customer interaction (myProduct), continuous upgrade and feedback of products (virtual twin), different business models (performance as a service) all will challenges organizations to reconsider their processes.

Digital PLM utilizing a model-based or model-driven backbone will be the (potential) future for companies as data can be flowing through the organization, not locked in documents and classical processes. In my upcoming blog post I will spend some more time on the model-based enterprise.

Conclusion:
It depends on your company´s core business process where the focus on a model-based enterprise supported by (digital) PLM benefits the most. In parallel business models are changing which means the future must be flexible.

Digital PLM should be one of your company´s main initiatives in the next 5 years if you want to stay competitive (or relevant)

 

What do you think ? Am I too optimistic or too pessimistic ?

IMG-20160412-WA0000Finally, I have time to share my PLM experiences with you in this blog. The past months have been very busy as I moved to a new house, and I wanted to do and control a lot of activities myself. Restructuring your house in an agile way is not easy. Luckily there was a vision how the house should look like. Otherwise, the “agile” approach would be an approach of too many fixes. Costly and probably typical for many old construction projects.

Finally, I realized the beauty of IKEA´s modular design and experienced the variety of high-quality products from BLUM (an impressive company in Austria I worked with)

In parallel, I have been involved in some PLM discussions where in all cases the connection with the real C-level was an issue. And believe it or not, my blog buddy Oleg Shilovitsky just published a post: Hard to sell PLM? Because nobody gives a SH*T about PLM software. Oleg is really starting from the basics explaining you do not sell PLM; you sell a business outcome. And in larger enterprises I believe you sell at this time the ability to do a business transformation as business is becoming digital, with the customer in the center. And this is the challenge I want to discuss in this post

 

The value of PLM at the C-level

imageBelieve it or not, it is easier to implement PLM (in general) instead of explaining a CEO why a company needs modern PLM. A nice one-liner to close this post, however, let me explain what I mean by this statement and perhaps show the reasons why PLM does not seem to be attractive so much at the C-level. I do not want to offend any particular PLM company, Consultancy firm or implementor, therefore, allow me to stay on a neutral level.

The C-level time challenge

elevatorFirst, let´s imagine the situation at C-level. Recently I heard an excellent anecdote about people at C-level. When they were kids, the were probably the brightest and able to process and digest a lot of information, making their (school) careers a success. When later arriving in a business environment, they were probably the ones that could make a difference in their job and for that reason climbed the career ladder fast to reach a C-level position. Then arriving at that level, they become too busy to dive really deep into the details.

Everyone around them communicates in “elevator speeches” and information to read must me extremely condensed and easy to understand. As if people at C-level have no brains and should be informed like small kids.

I have seen groups of people working weeks on preparing the messages for the CEO. Every word is twisted hundred times – would he or she understand it? I believe the best people at C-level have brains, and they would understand the importance of PLM when someone explains it. However, it requires time if it does not come from your comfort zone.

Who explains the strategic value of PLM

There are a lot of strategic advisory companies who have access to the board room, and we can divide them into two groups. The ones that focus on strategy independent of any particular solution and the ones that concentrate on a strategy, guaranteeing their implementation teams are ready to deploy the solution. Let´s analyze both options and their advice:

Independent of a particular solution

tunnel_visionWhen a company is looking for help from a strategic consultancy firm, you know upfront part of the answer. As every consultancy firm has a preferred sweet spot, based on their principal consultant(s). As a PLM consultant, I probably imagine the best PLM approach for your company, not being expert in financials or demagogic trends. If the advisory company has a background in accountancy, they will focus their advice on financials. If the company has a background in IT, they will focus their information on an infrastructure concept saving so much money.

A modern digital enterprise is now the trend, where digital allows the company to connect and interact with the customer and therefore react faster to market needs or opportunities. IoT is one of the big buzz words here. Some companies grasp the concept of being customer centric (the future) and adapt their delivery model to that, not realizing the entire organization including their product definition process should be changing too. You cannot push products to the market in the old linear way, while meanwhile expecting modern agile work processes.

discussMost of the independent strategic consultants will not push for a broader scope as it is out of their comfort zone. Think for a moment. Who are the best strategic advisors that can talk about the product definition process, the delivery process and products in operation and service? I would be happy if you give me their names in the comments with proof points.

Related to a particular solution

hammer and nailWhen you connect with a strategic advisory company, which an extensive practice in XXX or YYY, you can be sure the result will be strategic advice containing XXX or YYY. The best approach with ZZZ will not come on the table, as consultancy firms will not have the intention to investigate in that direction for your company. They will tell you: “With XXX we have successfully transformed (many) other companies like yours, so choose this path with the lowest risk.

And this is the part what concerns me the most at this time. Business is changing rapidly and therefore PLM should be changing too. If not that would be a strange situation? Read about the PLM Identity crisis here and here.

The solution is at C-level (conclusion)

I believe the at the end the future of your company will be dependent on your DNA, your CEO and the C-level supporting the CEO. Consultancy firms can only share their opinion from their point of view and with their understanding in mind.

If you have a risk-averse management, you might be at risk.
Doing nothing or following the majority will not bring more competitive advantage.

The awareness that business is global and changing rapidly should be on every company’s agenda.

Change is always an opportunity to get better; still no outsider can recommend you what is the best. Take control and leadership. For me, it is clear that the product development and delivery process should be a part of this strategy. Call it PLM or something different. I do not care. But do not focus on efficiency and ROI, focus on being able to be different from the majority. Apple makes mobile phones; Nespresso makes coffee, etc.

Think and use extreme high elevators to talk with your C-level!

Your thoughts?

7years

Two weeks ago I got this message from WordPress, reminding me that I started blogging about PLM on May 22nd in 2008. During some of my spare time during weekends, I began to read my old posts again and started to fix links that have been disappearing.

Initially when I started blogging, I wanted to educate mid-market companies about PLM. A sentence with a lot of ambiguities. How do you define the mid-market and how do you define PLM are already a good start for a boring discussion. And as I do not want to go into a discussion, here are my “definitions”

Warning: This is a long post, full of generalizations and a conclusion.

PLM and Mid-market

The mid-market companies can be characterized as having a low-level of staff for IT and strategic thinking. Mid-market companies are do-ers and most of the time they are good in their domain based on their IP and flexibility to deliver this to their customer base. I did not meet mid-market companies with a 5-year and beyond business vision. Mid-market companies buy systems. They bought an ERP system 25-30 years ago (the biggest trauma at that time). They renewed their ERP system for the Y2K problem/fear and they switched from drawing board towards a 2D CAD system. Later they bought a 3D CAD system, introducing the need for a PDM system to manage all data.

PLM is for me a vision, a business approach supported by an IT-infrastructure that allows companies to share and discover and connect product related information through the whole lifecycle. PLM enables companies to react earlier and better in the go-to-market process. Better by involving customer inputs and experience from the start in the concept and design phases. Earlier thanks to sharing and involving other disciplines/suppliers before crucial decisions are made, reducing the amount of iterations and the higher costs of late changes.

PLM_profSeven years ago I believed that a packaged solution, combined with a pre-configured environment and standard processes would be the answer for mid-market companies. The same thought currently PLM vendors have with a cloud-based solution. Take it, us it as it is and enjoy.

Here I have changed my opinion in the past seven years. Mid-market companies consider PLM as a more complex extension of PDM and still consider ERP (and what comes with that system) as the primary system in the enterprise. PLM in mid-market companies is often seen as an engineering tool.

LESSON 1 for me:
The benefits of PLM are not well-understood by the mid-market

To read more:

PLM for the mid-market – mission impossible?

PLM for the SMB – a process or culture change ?

Culture change in a mid-sized company – a management responsibility

Mid-market PLM – what did I learn in 2009 ?

Implementing PLM is a change not a tool

Mid-market deadlocks for PLM

Who decides for PLM in a mid-market company ?

More on: Who decides for PLM in a mid-market company ?

Globalization and Education

globalIn the past seven years, globalization became an important factor for all type of companies. Companies started offshoring labor intensive work to low-labor-cost countries introducing the need for sharing product data outside their local and controlled premises. Also, acquisitions by larger enterprises and by some of the dominant mid-market companies, these acquisitions introduced a new area of rethinking. Acquisitions introduced discussions about: what are real best practices for our organization? How can we remain flexible, meanwhile adapt and converge our business processes to be future ready?

Here I saw two major trends in the mid-market:

Lack of (PLM) Education

dummies_logoTo understand and implement the value of PLM, you need to have skills and understanding of more than just a vendor-specific PLM system. You need to understand the basics of change processes (Engineering Change Request, Engineering Change Order, Manufacturing Change Order and more). And you need to understand the characteristics of a CAD document structure, a (multidisciplinary) EBOM, the MBOM (generic and/or plant specific) and the related Bill of Processes. This education does not exist in many countries and people are (mis-)guided by their PLM/ERP vendor, explaining why their system is the only system that can do the job.

Interesting enough the most read posts on my blog are about the MBOM, the ETO, BTO and CTO processes. This illustrates there is a need for a proper, vendor-independent and global accepted terminology for PLM

Some educational posts:

Bill of Materials for Dummies – ETO  ranked #1

ECR/ECO for Dummies ranked #2

BOM for Dummies – CTO  ranked #4

BOM for Dummies: BOM and CAD  ranked #7

BOM for Dummies – BTO

Where does PLM start beyond document management ?

The dominance of ERP

swissAs ERP systems were introduced long before PLM (and PDM), these systems are often considered by the management of a mid-market company as the core. All the other tools should be (preferably) seen as an extension of ERP and if possible, let´s implement ERP vendor´s functionality to support PLM – the Swiss knife approach – one tool for everything. This approach is understandable as at the board level there are no PLM discussions. Companies want to keep their “Let´s do it”-spirit and not reshuffle or reorganize their company, according to modern insights of sharing. Strangely enough, you see in many businesses the initiative to standardize on a single ERP system first, instead of standardizing on a single PLM approach first. PLM can bring the global benefits of product portfolio management and IP-sharing, where ERP is much more about local execution.

LESSON 2:
PLM is not understood at the board level, still considered as a tool

Some post related to PLM and ERP

Where is the MBOM ?  ranked #3

Connecting PLM and ERP (post 1)(post 2)(post 3) ranked #8

Can ERP vendors do PLM ?

PLM and ERP – the culture change

PLM and ERP – continued

5 reasons not to implement PLM – Reason #3 We already have an ERP system

The human factor

whyworryA lot of the reasons why PLM has the challenge to become successful have to do with its broad scope. PLM has an unclear definition and most important, PLM forces people to share data and work outside their comfort zones. Nobody likes to share by default. Sharing makes day-to-day life more complicated, sharing might create visibility on what you actually contribute or fix. In many of my posts, I described these issues from various viewpoints: the human brain, the innovators dilemma, the way the older generation (my generation) is raised and used to work. Combined with the fact that many initial PLM/PDM implementations have created so many legacies, the need to change has become a risk. In the discussion and selection of PLM I have seen many times that in the end a company decides to keep the old status quo (with new tools) instead of really having the guts to move toward the future. Often this was a result of investors not understanding (and willing to see) the long term benefits of PLM.

LESSON 3:
PLM requires a long-term vision and understanding, which most of the time does not fit current executive understanding (lack of education/time to educate) and priority (shareholders)

Many recent posts are about the human factor:

The Innovator´s dilemma and PLM

Our brain blocks PLM acceptance

PLM and Blockers

The PLM paradox for 2015

PLM and Global Warming

Τα πάντα ρεί

PLM is doomed, unless ……

How to get users excited or more committed to a new PLM system?

The digital transformation

econimistThe final and most significant upcoming change is the fact that we are entering a complete new era: From linear and  predictable towards fast and iterative, meaning that classical ways we push products to the market will become obsolete. The traditional approach was based on lessons learned from mechanical products after the second world-war. Now through globalization and the importance of embedded software in our products, companies need to deliver and adapt products faster than the classical delivery process as their customers have higher expectations and a much larger range to choose from. The result from this global competitiveness is that companies will change from delivering products towards a more-and-more customer related business model (continuous upgrades/services). This requires companies to revisit their business and organization, which will be extremely difficult. Business wise and human change require new IT concepts – platform? / cloud services? / Big data?

Older enterprises, mid-market and large enterprises will be extremely challenged to make this change in the upcoming 10 years. It will be a matter of survival and I believe the Innovator´s Dilemma applies here the most.

LESSON 4:
The digital transformation is apparent as a trend for young companies and strategic consultants. This message is not yet understood at the board level of many businesses.

 

Some recent post related to this fast upcoming trend:

From a linear world to fast and circular ?

Did you notice PLM is changing?

Documents or Intelligent Data ?

The difference between files and data-oriented – a tutorial (part 1)(part 2)(part 3)

PLM is dead, long live …… ?

PLM, Soccer and game changing

PLM and/or SLM? – (part 1)(part 2)

Breaking down the silos with data

ROI (Return On Investment)

No_roiI also wrote about ROI – a difficult topic to address as in most discussions related to ROI, companies are talking about the costs of the implementation, not about the tremendous larger impact a new business approach or model can have, once enabled through PLM. Most PLM ROI discussions are related to efficiency and quality gains, which are significant and relevant. However these benefits are relative small and not comparable with the ability to change your business (model) to become more customer centric and stay in business.

Some of the ROI posts:

To PLM or Not to PLM – measuring the planning phase  ranked #5

Free PLM Software does not help companies  ranked #6

PLM: What is the target?

PLM selection–additional thoughts

PLM Selection: Proof Of Concept observations

Where is my PLM Return On Investment (ROI) ?

A PLM success story with ROI

Conclusion

A (too) long post this time however perhaps a good post to mark 7 years of blogging and use it as a reference for the topics I briefly touched here. PLM has many aspects. You can do the further reading through the links.

From the statistics it is clear that the education part scores the best – see rankings. For future post, let me know by creating a comment what you are looking for in this blog: PLM Mid-Market, Education, PLM and ERP, Business Change, ROI, Digitalization, or …??

Also I have to remain customer centric – thanks for reading and providing your feedback

nochangecartoon

Above Image courtesy of the marketoonist.com – Tom Fishburne
Image related to digital transformation: The Economist – the onrushing wave

coopIn the past two years, I have been heavily involved in PLM Proof of Concepts sitting at both sides of the table. Supporting companies in their PLM selection, supporting a vendor explaining their value to the customer and supporting implementers assisting them with industry knowledge, all in the context of a PLM selection process.

The Proof of Concept is crucial in a PLM selection process as it is the moment where the first glimpse of reality comes to the table.

Different size of companies, different consultants all have a different view on the importance of the Proof of Concept. Let me share you my thoughts after a quick recap on the PLM selection process.

The PLM selection process

1. Build a vision

visionIt is important that a company understands what they want to achieve in the next five to ten years, before starting a PLM selection process. Implementing PLM means a business transformation, even if you are a small company. If the management does not understand a vision is required, there is a potential risk upcoming, as PLM without a change in the way people work, will not deliver the expected results.

2. Issue an RFI to potential candidates

rfi-plmOnce you have a PLM vision, it is time to get in touch with potential suppliers. The RFI (Request for Information) phase is the phase where you can educate yourself better by challenging the suppliers to work with you on the future solutions.

3. Discuss with selected candidates

discussFrom the RFI responses you understand which companies are attractive because they match your vision, your budget or industry. Have a first interaction with the selected companies and let them demo their standard environment targeted to your vision.

4. POC

test conceptIn this stage, you check with the preferred companies their ability to deliver and your ability to work together. The POC phase should give you the understanding of the scope for the upcoming PLM project and help you to understand who and how the project can be executed. More details about this step below.

5. RFP

No_roiAlthough some companies start with an RFP before the POC, for me it makes most sense to verify the details after you have a proper understanding of the To-Be solution. The RFP is often the base for the contractual scope and therefore should be as accurate as possible

In the past, I wrote in more detail about the PLM selection process. Two posts:  PLM selection: Don’t do this and PLM selection: Do this. Have a read if you want to understand this part in more depth. Now let´s focus on the POC .

POC targets

  • As described before, the target of the Proof of Concept should be to get a better understanding of the potential To-Be processes and obtain an impression of the capabilities of the implementer and the preferred PLM software.

The result should be that you have more realistic expectations of what can be achieved and the challenges your company will face.

  • From there, you can evaluate the risks, address them and build an achievable roadmap to implement. It is important that the focus is not just on the cost of the implementation.
  • To sell PLM inside your company, you need to realign with the vision and explain, to all people involved,the value of “Why PLM”.

Explaining the value is complex, as not everyone needs the same message. The management will focus on business benefits where users will focus how it impacts their daily life.  If you forget to explain the value, the PLM projects, it is considered again as just another software purchase.

POC DO’s

businessMake sure the Proof of Concept is driven by validating future business scenarios, focusing on the To-Be solution. The high-level scenarios should be demonstrated and explained to the business people. In this stage, it is important people realize the benefits and the value of the new processes.

sales eventThe POC is also an internal sales event. The goal should be to get more enthusiastic and supportive business people in your company for the upcoming PLM project. Identify the champions you will need to lean on during the implementation.

balanceTest the implementer. To my opinion the critical success of a PLM implementation depends on the implementation team, not on the software. Therefore, the POC phase is the best moment to learn if you can work with the implementer. Do they know your business? Do they have experience with your business? The more you are aligned, the higher the chance you will be successful as a team

commitShow commitment to engage. Often I have seen POC engagements where the company demanded the implementer or vendor a Proof of Concept for free. This creates an unbalanced situation during the Proof of Concept as the vendor or implementer can not invest time and resources in the process as expected without any commitment from the company. By paying a certain fee for the POC, a company can demonstrate to the implementer /vendor that this POC is valuable for you and you can request the same response from them.

POC DON’Ts

no detailsThe Proof of Concept is not a detailed function/feature check to identify each mouse-click or option in the system. During the implementation, these details might come up. It is important in a Proof of Concept to understand the big picture and not to get lost in the details. As human beings we tend to focus on what does not work, not realizing that probably over eighty-ninety percent works according the needs

ultimateDo not expect the ultimate To-Be scenario demonstrated during the Proof of Concept. The Proof of Concept is a learning stage for both the company and the implementer to imagine the best possible scenario. PLM systems are generic and likely they will not provide a similar configuration and functionality matching your environment. At this stage validate if the primary capabilities are there and if there are gaps.

plm vendorDo not run a POC with a vendor (only). This might be one of the most critical points for a POC. A PLM software vendor’s target is to sell their software and for that reason they often have dedicated presales teams that will show you everything in a smooth manner, overwhelming you with all the beauty of the software. However after the POC this team is gone and you will have to align yourself again with the implementation partner, trying to match again your business needs and their understanding.

imageRealize – you get what you are asking for. This is more a Do-and-Don’t message packed together. A Proof of Concept phase is a point where companies get to know each other. If you are not focused, do not expect the implementer / vendor to be committed. A PLM implementation is not product. It is a business transformation supported by products and services. Do not treat PLM implementers and vendors in the same way, as your customers treat you (in case you deliver products).

Conclusion

There are still many more thoughts about the Proof of Concept . Ideally you run two POCs in parallel, either with two implementers of the preferred software (if possible) or with two different implementers representing different software.

Ideally, as I know it is a challenge, especially for small and medium-sized businesses, where people are running to keep the business on-going.

Still remember, PLM is a business transformation, targeting to improve your business in the upcoming five to ten years, avoiding you are running out of business.

Your thoughts ?

As a bonus a short anecdote that I posted in 2010 still relevant:

plm heaven or hell

Some time ago a Christian PLM Sales professional died (let’s call him Jack) and according to his believe he faced Saint Peter at the gates of Heaven and Hell.
Saint Peter greeted Jack and said: “Jack, with the PLM Sales you have done good and bad things to the world. For that reason, I cannot decide if you should go to Heaven or to Hell. Therefore, I allow you to make the choice yourself”.

Jack replied: “But Saint Peter, how can I make such an important decision for the rest of my eternal life. It is too difficult!”

Saint Peter replied: “No problem Jack, take a look at Heaven and Hell, take your time and then tell me your decision.”

Jack entered Heaven and he was surprised about the quietness and green atmosphere there. Angels were singing, people were eating from golden plates with the best food ever, people were reading poetry and everything was as peaceful as you could imagine. In the distance, he could see God surrounded by some prophets talking about the long-term future. After some time, Jack had seen it and went to Hell to have a view there.

And when he opened the gates of Hell, he was astonished. Everywhere he looked there were people partying, having fun. It reminded him off these sales kick-offs, he had in the past, exotic places with lots of fun. In the distance, he could see the Devil as DJ playing the latest dance music – or was it DJ Tiësto?

Jack did not hesitate and ran back to Saint Peter, no time to lose. “Saint Peter,” he said “I want to go to Hell, no doubt. And pity I did not know it before”

“So be it, ” said Saint Peter “go for it.”

And then once Jack entered Hell, it was suddenly all fire around him, people were screaming of pain and suffering and also Jack felt the first flames.

“Devil!!”  He screamed “what happened to what I have seen before?”

With a sarcastic voice, the devil replied: “That? That was a proof of concept.”

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