Is it a time to change “PLM for SMB” mantra and call it “efficient PLM”?

PLM was born as a strategy and technology for large organizations. These manufacturing companies supposed to have enough resources and pay for expensive PLM licenses. From that standpoint, PLM was a typical example of enterprise software sold to large customers. For many years, it was an absolutely normal thing – complex portfolios, enterprise sales, implementation consulting, maintenance programs.

It didn’t work for smaller midsize manufacturing organizations. These companies didn’t by PLM idea and expensive licenses. SMB business is tough for everyone. PLM vendors were trying to find a solution. One of them is to “downsize” or “right size” PLM technology to answer the needs of small companies. These are so called “mid-size” or “SMB” companies. The debates about PLM for SMB are well-known in the industry. You can track these discussions on blogs, analyst researches and vendor websites.

Here are few examples to catch up with the discussions. One-on-one SmarTeam talk about PLM for SMB by Jim Brown of Tech-Clarity; 5 Reasons for Small to Medium-size manufacturers to adopt PLM Industry Week article by Omnify PLM CTO Chuck Cimalore; Vendors try to “rightsize” PLM for smaller businesses by Beth Stackpole of DE, PTC introduces PTC PLM Cloud for SMB Market by Barb Schmitz from 3D CAD world. You can easy find more articles.

After speaking many years with manufacturing companies, I found companies get annoyed by “PLM for SMB” message. Companies are ready to call themselves unique, but not “small-to-medium”. Modern manufacturing trends including growing contract manufacturing dependencies, agile manufacturing transformation, small teams and global distribution of resources put a question mark behind the definition of “SMB” and complexity of manufacturing for small companies.

I can see more manufacturing companies moving IT into cloud including Exchange servers, networks and enterprise applications. Communication and support for distributed processes is a killer requirement for agile engineering and manufacturing teams. Besides that, all companies (including very large manufacturing organizations) are looking for rapid implementations, ease of use, best practices, templates, implement using staging approach, integrate with CAD systems and ERP.

The following article caught my attention during the weekend – Top 3 Things to Consider Prior to Implementing PLM for Mid-Market Companies by Ilan Madjar. My favorite part is related to the definition of “SMB” not as a company, but as a type of implementation.

We prefer to define mid-market based on the characteristics of the implementation, and not on the company’s size or revenue. We look at the number of users, the scope of the implementation, the different functionality being implemented and the size of the team, both internal and external, conducting the implementation. For instance, a mega-company that uses the system in a small division would constitute a mid-market implementation, by my definition. Correspondingly, a large company migrating out of a PDM system to PLM (enterprise system) but maintaining the existing functionality and support team, would also be considered a mid-market implementation.

So, it looks like “mid-market” is not about the company. It is about type of PLM implementation, which is agile, cost effective and has fast ROI. No surprise each time PLM vendor started to sell mid-market solution, it created a conflict with a larger PLM portfolio, since everyone else wanted to buy “mid-market” PLM features too.

What is my conclusion? It is a time to call things by their names. There is no “SMB” manufacturing organizations. There are organizations that cannot or don’t want to afford expensive old-fashion PLM implementations. There are organizations that are looking for quick ROI. There are organizations that don’t want to have 10 people IT team maintaining PLM installation and upgrades. There are organizations that have people distributed everywhere and cannot rely on old-fashion enterprise PLM server. My hunch we are going to see more such organizations in the near future. So, core elements of “PLM for SMB” approach will be applicable to all manufacturing companies. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion about BOM can be unintentionally biased.