Is PLM Customization a Data Management Titanic?

PLM implementations are not simple. At the time when PLM vendors are working how to improve their out-of-the-box product offerings, PLM customization plays a very significant role. According to the analysts, customizations and services can be estimated as about 40-50% of total revenues in PDM/PLM domain.

What is behind these numbers and why it happens? In order to understand it, I think, we need to get short round-trip in the history of Product Lifecycle Management. The roots of PLM are in the first implementations made by large aerospace, defense and automotive manufacturers. This is the birth place of PLM and origin of PLM ideas. Since then, PLM started their journey downstream by proliferating ideas, software products and implementations. I can identify the following three trends in Product Lifecycle Management these days:

Maturity of the basic product offering
The PLM core functionality came to the stable form and mostly represented by product data management, lifecycle components and additional modules related to the business process activities – requirements, program, project, services and other processes. Interesting is that PDM and Lifecycle are considered as the most mature components of these portfolios.

Industry specialization
Initially, PLM started in aero/auto domains. However, nowadays it is moving towards all industries. In order to play industry game well, PLM vendors decided to invest into industry orientation. This trend can be characterized by a wide range of options starting from industry marketing and ending by providing packaged PLM solutions for the specific industries (i.e. Apparel, CPG, Food and Beverage, etc.)

Emerging trends
I can identify two main emerging trends – SaaS / OnDemand and Open Sources. Both are focused on how to satisfy needs of customers differently utilizing new software technologies  and deployment as well as by investing in the alternative form of business models.

When PLM industry focused mostly on providing out-of-the-box functionality, I didn’t find any technological trends focused on core data management capabilities of existing and future PLM systems. This is a very bad sign, in my view. Looking backwards, I can see significant improvements that were made in PLM software by the introduction of flexible data modeling. It allowed to decrease cost of PLM implementations, but created the huge amount of today’s customizations and implementations based on existing PDM/PLM platforms.  And this is a growing conflict between customized PLM software and upgrades to the coming releases of PLM portfolios.

I found the following Develop3D’s article as a very interesting. Al Dean is writing about replacement of highly customizable instance of MatrixOne by Open Source PLM Aras. There is more information about this event on Aras website. Read it. It looks like customer made the decision in favor of Open Source because of absence of alternatives to move to the next version of out-of-the-box MatrixOne version. I want to point out on the discussion about PLM software upgrades – PLM, Cloud, SaaS and Software Upgrades. My conclusion was simple – technology and architecture matter. If PLM data management capabilities could manage the upgrade event from highly customizable solution, I doubt the customer’s decision was to dump out existing vendors. Does it mean Aras has such technology? I don’t know. However, coupled with Open Source business model it crushed existing PLM implementation.

So, what is my conclusion? My hunch is that PLM vendors forgot to invest into data management technologies. PLM data management technologies were created 10-15 years ago. Since then, industry developed huge amounts of customized implementations. I see these implementations as Titanic pushing forward… Do you think they will be able to achieve port of destination or will die in front of icebergs of upgrades? I see it as a real and dangerous problem.

Just my thoughts…
Best, Oleg

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  • Jovan

    Actually, combinig this and other of your thoughts what do you get. Open standards for Data Management and Portable Customization… Immagine how everything would be simplified (and I am sure this can still be done for SMBs)!
    Different vendors could propose their added value, and companies would have the choice to change easily without giving up their IP…
    A sweet dream…

  • Oleg,

    This is a favorite topic of mine so I am pleased to see you tackling it. I think it may be more like a timebomb than the Titanic but it is still an apt analogy. It kind of reminds of the line from Jurassic Park, “just because you can do something doesn’t mean you should”. Today’s PLM vendors seem to be shying away from true customization and trying to encourage more out of the box implementations but there are numerous legacy implementations that are really struggling to upgrade their software because of the level of customizaion.
    Without naming names I was involved with two very large electronics customers that both attempted highly customized implementations of PLM and ended up moving away from these systems only to return and attempt implement more off the shelf type functionality with these same systems with much greater success. I think this is why it is so critical to fully assess your process prior to implementing a new PLM and to adjust to the PLM as much as possible without compromising capability too much.

  • Jovan, you are right – sweet dreams! How to make them come true? Money…. Open standards need to be paid by somebody. Today, PLM vendors are not interested to pay for open standards, since it is not giving them any competitive advantages. I’m watching very closely how “open source” can be monetized. Interesting, if 3’000 seats open source installations will pay maintenance. This can be an inflation point… Best, Oleg

  • Stephen, Thank you for your comments! Actually, I think, this is a very interesting opportunity. PLM vendors are definitely taking this route now. To build off the shelf functionality to replace heavy customized environments. I think, the key for success is to build flexible systems that not require a high customization level. The level of flexibility can guarantee adoption to customer processes, but gives an option to migrate between system’s version without an upgrade hassle. However, I don’t think such a system ever exists. Best, Oleg

  • It’s good to see the PLMIG are trying to start to set PLM Standards… http://www.plmig.com/welcome/stdsworkshops.shtml, regds, jez

  • Thanks for your thoughts. I think about following cases:
    – Extensive PLM customization will continue to be a part of implementation, as the gap between the Actual Industry Standards/Process & maturity of PLM solutions keep on increasing, may be slowly.I think this is a never ending story as PLM solutions are more generic in nature.
    – Other side, Let’s imagine, that we have some PLM Industry standards in place, then also I think PLM customization will exist because industries will resist – to change there existing working process (evolved in years) to inline with standards may be for which the PLM solution pre-configured.

    Just my thoughts……!

  • Jez, thanks for your comment! It would make sense to me if those standards-related activities were short and implemented. Unfortunately, standards are like toothbrushes – everyone needs them, but nobody wants to use somebody else standard. The biggest problem for standards is funding. Who is interesting? Best, Oleg

  • Chandrajit, Thank you for your insight! My point is that if PLM vendors will allow smooth migration of customization between product version, the situation can be improved. Most of the customizations created problems for customers to move to the next version. This conflict will prevent industry from moving forward. With regards to standards – there is no sense to create standards and assume resistance. If standards cannot be adopted, they are not efficient. Think about GSM in mobile communication or any other adopted standard… Best, Oleg

  • .
    Aras is not open sources but refered to “Msft open source” that is not open source.

    One of the really bad think around Aras. Is yes you strart with something that look like free but when you required to get some more specific functions you have to go in third party module that become very expensive at the end.

  • Bruno, Thank you for your comment! Could you, please, explain more in details? I understand, Aras is using on the Microsoft’s open source license (http://www.microsoft.com/opensource/licenses.mspx). But, despite some legal implication related to other available open source licenses, why do you see it different? Best, Oleg

  • Thought might be helpful to respond / clarify on the Msft open source and other comment
    * Yes, Aras is on Microsoft technologies (Win Server, SQL database, .NET)
    * Aras is using Ms-PL license for open source (OSI approved license)

    By combining open source on Microsoft we have opened ourselves up to the anti-Microsoft bashing. For us it’s not religious, it’s about enterprise qualified infrastructure and IT skills that every company has.

    The comment about “start free, then specific functions go to 3rd party module that become expensive”. Not clear, but figure this must be referring to CAD integrations… since full enterprise PLM is free (inc NPDI, BOM/parts, config mgt, drawing & doc mgt, eng change, supplier mgt, quality, compliance, etc, etc, etc).

    Aras is open and anyone can do their own integrations if they choose. If you want prepackaged integrations with ongoing support, upgrades, etc… then “yes” those are from 3rd parties and have cost (still no license expense, only ongoing subscription/maintenance – same as any other PDM system).

    In fact, for a company with 30 seats of CAD the Aras connectors are <50% of the cost of Teamcenter, Windchill or other PLM/PDM over 5 year. Combine that with elimination of all PLM license expenses and the business case is very strong.

    Hope this helps.

    MarcL
    http://www.aras.com

  • Marc, thanks for clarifications! Best, Oleg

  • As far as I know, the old established PLM vendors use 3rd party CAD integrations quite heavily when integrating CAD systems other than their own.. If Aras use 3rd party CAD integrations, they are just following a tried and trusted industry model..
    PS. Speaking from the perspective of a PLM implementation company, we just wish some of the other systems we work with were as easy to configure/customise as Aras.. If they were, life would be a lot easier..
    Anyway aligning the PLM solution to the company’s processes is important. That’s why people always want to do it. The OOTB templated approach is a poor substitute. That’s why what Aras are doing with an architecture that allows/encourages/facilitates process-technology alignment (and does so in a way that allows you to upgrade easily) is such a breath of fresh air for people like us..

  • Graham, I agree -flexibility has a very important role. However, OOTB templates are popular for most of PLM vendors these days. My take on this is that OOTB is a good marketing tool to prove what you can do. However, for long term implementation it becomes problematic. Also, customers have different needs and adapting solutions to their business processes. Thanks for your comments! Best, Oleg

  • Coming back to the Aras Open Source issue. I’m a bit astonished, how the Open Source Idea is being treated in the discussion.

    Many software solutions nowadays incorporate Open Source, allow (in parts) code customization und integration of third party products and solutions, but do not claim itself to be Open Source.

    The Term Open Source means best to my knowledge (besides many aspects in detail): O p e n S o u r c e. Thus, it would be interesting to know:

    Under which Open Source label does Aras provide its own intellectual property? Where can I find the complete Source of the Aras Solution provided under the current Aras Innovator License Agreement? Does anybody know?

  • Roland, I think the answer was provided by MarcL in his comment before. I hope he will be kind and explain it more in details. Thank you for your comment! Best, Oleg

  • Since I’m the guy refered to in this statement “It looks like customer made the decision in favor of Open Source because of absence of alternatives to move to the next version of out-of-the-box MatrixOne version.” I figured I had better weigh in!

    I don’t think customization is the “Titanic” any longer, maybe 10years ago. We had lots of great alternatives to choose functionality from. The real preverbal “iceberg” was the license model that most platform suppliers offered us. We spent a lot of time in 2009 working through our platform options with a full understanding of what the business needed and the areas that brought a reasonable return on investment. We went with the solution that offered us the correct value for what we needed to accomplish. We revisited the platform because it was the right time to upgrade for us. Nothing is ever free, the Aras platform provided the most value against our business requirements for function.

    I agree with you that the maturity of the platforms across the market place is solid for basic PDM and lifecycle/workflow capabilities. Our analysis showed that clearly. Industry Specialization really has just blown out the complexity of the different platform modules helping the platform suppliers lock in a revenue stream as a company expands functionality. I ask myself.. “if an industry solutions helps implement faster why do I have to pay for it three times, for the license, the implementation and then maintenance every year? “ I could accept the logic that OOB Industry Solutions hold down implementation costs so implementers should be able to maximize margins and reduce implementation risks. It should lead to more fixed price bids!

    I have been in this business for 10 years now and I came from 17 years of product development before that so I know this space well. The key future trends in this space will be ubiquitous access to data (without writing more checks very year for uplifts, licenses and modules) and the ability to fully integrate systems that make up the PLM platform. I doubt any big company with SW and HW to consider can make a single application solution work like I see in sales presentations. Maybe when I die and go to heaven! In our world functionality has to be coupled with the ability to integrate and deliver a sustainable business model that generates a solid ROI! The investment “iceberg” can’t sink the return part of the ROI calculation!

    I like your Titanic idea, but not the title. PLM implementation is a major endeavor for a company. It’s a long journey. The license cost modules to me are the Icebergs, only a small portion is visible from the surface but the danger lurks below after you set sail. So I might re-title “ Is PLM License Models the Data Management Titanic”.

    Yes there’s risk, as with any PLM implementation and we are managing them carefully. We just decided to set sail in the Caribbean…………… now we can concentrate on where we are going.

  • Tom Gill

    Roland,

    The solutions (Product Engineering, Quality Planning, and Program Management) are available under the MS-PL license, the framework is available under the MS-RL license. MS-PL is well recognized as a fully open license. MS-RL does not allow redistribution, so you cannot start a business based on a modification of the framework.

    The code for the solutions comes with the download from the Aras web site. The framework code must be obtained from Aras.

    Tom

  • David, It is great to have you on blog! Thank you for your comments and insight! I like your idea about ubiquitous access to data and integration. I see a big reflection of flexibility behind such solution. I’m looking forward to the situation when PLM system can be implemented with lower risk and with less cost in comparison to what we have today. Best, Oleg

  • Tom, Thanks for the explanations! What do you mean by framework code? Is it binary code that can be only redistributed? Best, Oleg

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