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This year started for me with a discussion related to federated PLM. A topic that I highlighted as one of the imminent trends of 2022. A topic relevant for PLM consultants and implementers. If you are working in a company struggling with PLM, this topic might be hard to introduce in your company.

Before going into the discussion’s topics and arguments, let’s first describe the historical context.

The traditional PLM frame.

Historically PLM has been framed first as a system for engineering to manage their product data. So you could call it PDM first. After that, PLM systems were introduced and used to provide access to product data, upstream and downstream. The most common usage was the relation with manufacturing, leading to EBOM and MBOM discussions.

The traditional ENOVIA PLM backbone

IT landscape simplification often led to an infrastructure of siloed solutions – PLM, ERP, CRM and later, MES. IT was driving the standardization of systems and defining interfaces between systems. System capabilities were leading, not the flow of information.

As many companies are still in this stage, I would call it PLM 1.0

PLM 1.0 systems serve mainly as a System of Record for the organization, where disciplines consolidate their data in a given context, the Bills of Information. The Bill of Information then is again the place to connect specification documents, i.e., CAD models, drawings and other documents, providing a Digital Thread.

Aras – Bills of Information creating the Digital Thread

The actual engineering work is done with specialized tools, MCAD/ECAD, CAE, Simulation, Planning tools and more. Therefore, each person could work in their discipline-specific environment and synchronize their data to the PLM system in a coordinated manner.

However, this interaction is not easy for some of the end-users. For example, the usability of CAD integrations with the PLM system is constantly debated.

Many of my implementation discussions with customers were in this context. For example, suppose your products are relatively simple, or your company is relatively small. In that case, the opinion is that the System or Record approach is overkill.

That’s why many small and medium enterprises do not see the value of a PLM backbone.

This could be true till recently. However, the threats to this approach are digitization and regulations.

Customers, partners, and regulators all expect more accurate and fast responses on specific issues, preferably instantly. In addition, sustainability regulations might push your company to implement a System of Record.

PLM as a business strategy

For the past fifteen years, we have discussed PLM more as a business strategy implemented with business systems and an infrastructure designed for sharing. Therefore, I choose these words carefully to avoid overhanging the expression: PLM as a business strategy.

The reason for this prudence is that, in reality, I have seen many PLM implementations fail due to the ambiguity of PLM as a system or strategy. Many enterprises have previously selected a preferred PLM Vendor solution as a starting point for their “PLM strategy”.

One of the most neglected best practices.

In reality, this means there was no strategy but a hope that with this impressive set of product demos, the company would find a way to support its business needs. Instead of people, process and then tools to implement the strategy, most of the time, it was starting with the tools trying to implement the processes and transform the people. That is not really the definition of business transformation.

In my opinion, this is happening because, at the management level, decisions are made based on financials.

Developing a PLM-related business strategy requires management understanding and involvement at all levels of the organization.

This is often not the case; the middle management has to solve the connection between the strategy and the execution. By design, however, the middle management will not restructure the organization. By design, they will collect the inputs van the end users.

And it is clear what end users want – no disruption in their comfortable way of working.

Halfway conclusion:

Rebranding PLM as a business strategy has not really changed the way companies work. PLM systems remain a System of Record mainly for governance and traceability.

To understand the situation in your company, look at who is responsible for PLM.

• If IT is responsible, then most likely, PLM is not considered a business strategy but more an infrastructure.
• If engineering is responsible for PLM, then you are still in the early days of PLM, the engineering tools to be consulted by others upstream or downstream.

Only when PLM accountability is at the upper management level, it might be a business strategy (assume the upper management understands the details)

Connected is the game changer

Connecting all stakeholders in an engagement has been a game changer in the world. With the introduction of platforms and the smartphone as a connected device, consumers could suddenly benefit from direct responses to desired service requests (Spotify, iTunes, Uber, Amazon, Airbnb, Booking, Netflix, …).

The business change: connecting real-time all stakeholders to deliver highly rapid results.

What would be the game changer in PLM was the question? The image below describes the 2014 Accenture description of digital PLM and its potential benefits.

Is connected PLM a utopia?

Marc Halpern from Gartner shared in 2015 the slide below that you might have seen many times before. Digital Transformation is really moving from a coordinated to a connected technology, it seems.

The image below gives an impression of an evolution.

I have been following this concept till I was triggered by a 2017 McKinsey publication: “our insights/toward an integrated technology operating model“.

This was the first notion for me that the future should be hybrid, a combination of traditional PLM   (system of record) complemented with teams that work digitally connected; McKinsey called them pods that become product-centric (multidisciplinary team focusing on a product) instead of discipline-centric (marketing/engineering/manufacturing/service)

In 2019 I wrote the post: The PLM migration dilemma supporting the “shocking” conclusion “Don’t think about migration when moving to data-driven, connected ways of working. You need both environments.”

One of the main arguments behind this conclusion was that legacy product data and processes were not designed to ensure data accuracy and quality on such a level that it could become connected data. As a result, converting documents into reliable datasets would be a costly, impossible exercise with no real ROI.

The second argument was that the outside world, customers, regulatory bodies and other non-connected stakeholders still need documents as standardized deliverables.

The conclusion led to the image below.

Systems of Record (left) and Systems of Engagement (right)

Splitting PLM?

In 2021 these thoughts became more mature through various publications and players in the PLM domain.

We saw the upcoming of Systems of Engagement – I discussed OpenBOM, Colab and potentially Configit in the post: A new PLM paradigm. These systems can be characterized as connected solutions across the enterprise and value chain, focusing on a platform experience for the stakeholders.

These are all environments addressing the needs of a specific group of users as efficiently and as friendly as possible.

A System of Engagement will not fit naturally in a traditional PLM backbone; the System of Record.

Erik Herzog with SAAB Aerospace and Yousef Houshmand at that time with Daimler published that year papers related to “Federated PLM” or “The end of monolithic PLM.”. They acknowledged a company needs to focus on more than a single PLM solution. The presentation from Erik Herzog at the PLM Roadmap/PDT conference was interesting because Erik talked about the Systems of Engagement and the Systems of Record. He proposed using OSLC as the standard to connect these two types of PLM.

It was a clear example of an attempt to combine the two kinds of PLM.

And here comes my question: Do we need to split PLM?

When I look at PLM implementations in the field, almost all are implemented as a System of Record, an information backbone proved by a single vendor PLM. The various disciplines deliver their content through interfaces to the backbone (Coordinated approach).

However, there is low usability or support for multidisciplinary collaboration; the PLM backbone is not designed for that.

Due to concepts of Model-Based Systems Engineering (MBSE) and Model-Based Definition (MBD), there are now solutions on the market that allow different disciplines to work jointly related to connected datasets that can be manipulated using modeling software  (1D, 2D, 3D, 4D,…).

These environments, often a mix of software and hardware tools, are the Systems of Engagement and provide speedy results with high quality in the virtual world. Digital Twins are running on Systems of Engagements, not on Systems of Records.

Systems of Engagement do not need to come from the same vendor, as they serve different purposes. But how to explain this to your management, who wants simplicity. I can imagine the IT organization has a better understanding of this concept as, at the end of 2015, Gartner introduced the concept of the bimodal approach.

Their definition:

Mode 1 is optimized for areas that are more well-understood. It focuses on exploiting what is known. This includes renovating the legacy environment so it is fit for a digital world. Mode 2 is exploratory, potentially experimenting to solve new problems. Mode 2 is optimized for areas of uncertainty. Mode 2 often works on initiatives that begin with a hypothesis that is tested and adapted during a process involving short iterations.

No Conclusion – but a question this time:

At the management level, unfortunately, there is most of the time still the “Single PLM”-mindset due to a lack of understanding of the business. Clearly splitting your PLM seems the way forward. IT could be ready for this, but will the business realize this opportunity?

What are your thoughts?