PLM, IT Transformation and Self-Organization

I was reading HBR Blog post by Andrew McAfee “IT’s Three Key Organizational Transformations“. The issue of IT spending made me think about the amount of software packages and IT services, a typical organization absorbed during the last 10-15 years for product development, engineering and manufacturing. The question, I wanted to ask and discuss, is what will be the future of these systems?

Disparate Systems and Product Development
The IT landscape in a typical manufacturing or engineering company is a blend of many systems. Each system is responsible for a particular business or engineering function. In many situations engineers are using different applications (in some cases, number is really big). As I had chance to discuss in “PLM and Heterogeneous Product Development, multiple systems is the reality and won’t be changed in a visible future.

Single System Myth And Transformation
I can see some of the business application vendors are still following “a single system” approach. Such big single systems are very complicated in setup, implementation, maintenance and, the most important, in change management. Vendors are still working on these systems will be actively looking how to transform these systems into a slim, agile set of the components (or services). In my view, we’ll see more and more smaller application.

PLM and Self-Organization
The idea of Self-Organization in PLM is interesting. Let me think what how possible it can be done? The value of existing systems is significant from the standpoint of data and processes they support. Since changes in such systems are very complicated, potentially, they can be self-organized into islands of information that will become available via set of services. Within the time, the value of information will become more critical. At the same time, process-oriented pieces of these apps will be transformed into a more agile set of services.

What is my conclusion today? Organizations are overloaded with software products – coming as OTS products and various forms of service deliveries. In addition to that, manufacturing organization created a huge number of customized software that applies to their specific processes. The biggest organizational problem, in my view, is how to move forward? There is a cost of maintaining all these systems (most of them, by the way, are in the active operation). At the same time, the cost of migration to a new system (or systems) is very high. And, there is an urgency to solve real business problems today. So, organization will struggle to find a pathway to self-organization product development and manufacturing systems. What will be technology and/or method to solve this problem? I think, we will have to discover it in the next decade.

Just my thoughts…
Best, Oleg

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  • Jeff

    Oleg,
    Have you seen any study showing a correlation between the degree of product development system integration and overall business results? My manager pulled together a small sample of 5 or 6 companies and is trying to draw the conclusion that companies with the same vendor for PLM and CAD have better business results. What are your thoughts?

  • Jeff, There is an industry agreement that CAD vendors are supporting their PDM (PLM?) better than one comes from competitors. In my view, this is less related to business and more related to the technologies. Vendors like PTC, Siemens, Dassault can provide additional internal support (API etc.) to integrate their own CAD systems. Also, the same companies will have better compatibility with new CAD versions release. This is a general rule. My opinion is that devil is in details. You need to define what function of the system is more important to you. How your CAD/design is dependent on Item, BOM and Configuration Management. What level of integration do you need with Manufacturing/ERP? Do you really going to have an advantage from the overall system alignment to a single vendor, even if CAD-PDM/PLM bundle will have the best-in-class integration? These are questions I’d be asking and analyzing to get a final conclusion. I hope it helps. If not we can contact me on oleg dot shilovitsky at gmail dot com. Best, Oleg

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