Cloud PLM and SaaS sales mindset

by Oleg on May 22, 2015 · 2 comments

cloud-plm-sales

I want to talk about PLM sales today. If you want to succeed in sales, a mindset is a right starting point. But, enterprise sales needs a special mindset. PLM sales is very special case. These days SaaS / cloud software is setting new rules for enterprise software. How does it influence and change PLM sales? What advantages cloud PLM can get compared to a traditional PLM products and sales model?

Few days ago, I posted about how to stop blaming engineers for PLM sales problems? In my view, engineers are on average bad sales people. Therefore, to put engineers in the spot of selling PLM and blame them for wrong articulation of PLM value is a bad idea. There are thousands of books and article on the topic of how to sell to enterprise organizations. It is a good reading for coming Memorial Day long weekend.  Today, I want to talk about cloud PLM sales – a new category that has a chance to change the way we sell PLM.

I can see two aspects of cloud PLM sales. First is related to a new reality of our world – internet, online connectivity, social networks, virality. How does it help to sell PLM? It certainly helps to create a new level of awareness about what your product does. If you didn’t setup your product twitter account, blog and other social channel, do it now! But, it doesn’t change a fundamentals. Despite all social channels, selling to enterprise is still very much old-schoolers game. In my view, there is no PLM vendors that discovered a new way to sell PLM until now. You can read more in my earlier post – PLM, Viral Sales and Enterprise Old Schoolers.

Second aspect is related to the fact how PLM companies are managing enterprise sales process and new business models. My attention caught the A16Z blog post - If SaaS products sell themselves, why do we need sales? The article gives you an excellent perspective on the details of sales process. I like the comparison of enterprise sales to the process of getting a bill passed in Congress. Certainly true. Although PLM is not a new category in the market, I would consider PLM sales challenge to create a unique value for every customer as something real PLM vendors are facing every day. PLM sales are competing with many other activities in manufacturing companies and it is literally hard to take it through the all three steps of decision process – why to buy PLM, why to buy PLM from a specific vendor and why to buy PLM now.

SaaS sales are facing the same level of sales difficulties. At the same time I’ve been thinking how cloud PLM can get some advantages over a traditional PLM product sales. And the point of “customer facing activity” form A16Z blog is clearly resonating here. This is a passage to pay attention in my view:

SaaS is a winner-take-all market involving a “land-and-expand” sales strategy. However, landing doesn’t necessarily mean expanding and winning. Staffing your startup with customer-facing resources — professional services, customer support, etc. — at this stage is an investment that will pay off not only in expanding your footprint inside that account, but in building the most powerful sales tool there is: a good reference. And while new clients are great, the best place to sell something is where you’ve already sold something.

You may ask me how is that related? Here is the thing… Landing should be an easy process in SaaS PLM compared to a traditional PLM sales process. And this is where cloud PLM can provide a clear differentiation. A traditional PLM approach is to sell on a premise of changing the way customer is doing business and manage product development processes. When it is done, you can setup PLM system and prove it. But it is a very lengthy process. Opposite to that, you can think about cloud PLM first sale as a “land” process. Do it for the most painful problem customer has. This is why PLM sales should be more technical. Land it to the customer for a cost of zero dollars. After all, you can leverage elasticity of the cloud as a biggest advantage. After you done, work on expand option. New subscription business models will help you to provide a new way for customer – pay per use.

What is my conclusion? Moving to the cloud, doesn’t mean PLM can sell itself. After earlier attempts, it looks like wrong sales strategy. At the same time, landing small feature to solve the most painful problem for a customer can be a right step to start. The challenge is to have enough customer facing resources that can help to discover it and land an initial solution with very low cost and super fast ROI. In my view, it is a completely different mindset from what we had before in PLM and enterprise. It is a time for PLM vendors to retool sales teams with new skills. Just my thoughts…

Best, Oleg

Image courtesy of Kittisak at FreeDigitalPhotos.net

 

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high-tech-electronic

Products are getting complex these days. Look on every small electronic gadget in your hands. It is actually combined from multiple pieces – mechanical parts, plastics, electronic and software. Traditionally you are using separate tools to design these parts – MCAD, PCB design, software tools. Then it gets tricky a bit – you need to put together right information about the product, manage changes, coordinate with suppliers, etc. PLM tools are here to help. But, for some reasons, it is a difficult problem to handle.

Engineering.com article In High-Tech Electronics, Managing Three Lifecycles As One is a New Key to Product Development by Laila Hirr speaks exactly about that problem. Here is my favorite passage from the article explaining the problem:

HTE’s need for PLM is straightforward—a firmer grasp of the information generated before and during product development and subsequently “in the field.” Many information needs go unmet when products go into assembly operations of original equipment manufacturers (OEMs) and built into other manufacturers’ components in complex supply chains. Users and system integrators may also be slow to share information.

For many reasons, PLM has repeatedly fallen short in this industrial sector. At CIMdata, the reason we see most often is a lack of integration with the full information set that defines the product. Achieving this integration is a multidisciplinary challenge and in PLM’s twenty-plus year history with the high tech industry, the challenge has yet to be resolved. This largely accounts for the scarcity of compelling PLM successes in HTE and the ongoing skepticism about PLM.

Article speaks about absence of integration between tools and dependencies on homegrown spreadsheets to manage bill of materials and change. Which made me think about core problem in PLM tools – management of multi-disciplinary BOM. I addressed this problem in the keynote presentation at ProSTEP iViP Symposium few weeks ago – PLM and ERP: separated by a common Bill of Materials (BOM). PLM systems today are addressing BOM management. Most of them are taking an approach to manage multiple bill of materials view. However, these tools are not efficient enough to manage a BOM which contains mechanical, electronic and software pieces together.  The complexity of BOM is driven by multiple disciplines, change management and product lifecycle as I presented on the following slide

bom-complexity-1

What is my conclusion? Technical difficulties and disagreement between people often can lead to problems in establishment of cohesive BOM management solutions. PLM fails to provide a way to manage multi-disciplinary BOM and changes. High-tech and electronic industry is specific because of high diversity of design tools – mechanical, electronic, software. PLM tools are not integrated well with design tool, which leads to poor BOM management. There are several reasons why it happens – limits of BOM management tools, complexity of integrations between design tools provided by multiple suppliers, UI complexity. Just my thoughts..

Best, Oleg

Image courtesy of Toa55 at FreeDigitalPhotos.net

 

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To access product information is one of the most important roles of PLM system. Time ago, organizing data in folders was good enough solution. Not anymore. Google changed the way we think about accessing information. Searching engineering and manufacturing software is tricky. There are many things that influencing the way you search for information – access rights, context, dependencies. The following picture summarizes top obstacles in finding information according to the Enterprise Search and Findability Survey 2013 published by FINDWISE.

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I wrote few posts about search in PLM in the past. Navigate to one of them to read more - PLM search and findability. For the last few years, PLM vendors put significant focus on improvements of user experience and search functions. There are examples of search driven user interfaces in Aras PLM, Autodesk PLM360Dassault / EXALEAD and others.

Earlier this week at Siemens PLM connection in Dallas, I had a chance to watch newest updates Teamcenter team made around Active Workspace. The first time product was presented back in 2011. Here is my original post about that- Siemens Active Workspace: PLM next big thing. Since that time, product evolved into rich user experience focusing on providing role-based, information search and navigation client.

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Siemens PLM Active Workspace is available in a browser and provides a way to search, filter and visualize information. In the example below, you can see an interesting combination of search, filtering and bar-chart visualization.

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Product information is usually intertwined with many dependencies. The following example shows the ability to navigate between interconnected pieces of information.

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The same UI is providing an access to the viewer.

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One of the new functions I found is an access to the information such as Bill of Material in a spreadsheet-like way with the ability dynamically select column, filter and sort.

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And finally you can annotate and comment on the pieces of information together with other people. It can give you some sort of social experience

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Search became the most important element of UI when it comes to access of complex information. Search is playing a significant role in the transformation of PLM user experience towards more simple and intuitive UI. Many users will appreciate a better search driven navigation. PLM vendors are paying more attention to search and you can find search functions in other PLM systems too. At the same time, Active Workspace is probably the latest example of search-driven UI in PLM.

What is my conclusion? I found interesting the evolution of Active Workspace for the last 4 years since it was originally presented. The UI became completely webish, many new functions were added. However, the core function of search-driven user experience is there and it provides differentiation to traditional folder-based navigation and browsing interfaces. Just my thoughts…

Best, Oleg

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Bill of Materials (BOM) and product lifecycle open loops

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It is hard overestimate the importance of Bill of Materials for product development. In my keynote at ProSTEP iViP symposium in Stuttgart earlier this month I’ve been sharing my thoughts why developing of single BOM across multiple disciplines in critical for organization. I wanted to bring few examples that can demonstrate why having a single […]

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How much does it cost to manage CAD data?

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What PLM industry can learn from… Hollywood?

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I’ve been reading a blog Getting PLM right: no one answer by Monica Schnitger. It is a slick writeup started from one of the most popular questions in PLM community – Why it makes my head hurt when I think I need/want/cloud use/maybe should think about PLM implementations? Monica speaks about why PLM creates so many […]

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BOM and roadblocks for Product-as-a-Service in manufacturing

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Software-as-a-Service (SaaS) is a software licensing and delivery model in which you are buying software subscription and software is typically centrally hosted. Here is a potentially big news – SaaS model is proliferating into manufacturing. Welcome Product-as-a-Service (don’t be confused with PaaS- Platform as a service). According to IDC report, manufacturing companies have seen some potential […]

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