How PLM vendors can miss digital transformation

How PLM vendors can miss digital transformation

digital-transformation-plm-wrong-priorities

Digital transformation is a new trend and manufacturing companies are exploring how to become leaders in a new digital society and what does it mean for their organizations. Here is a definition of digital transformation I captured on TechTarget website, which I like very much.

The term transformation refers to a fundamental change to an organization’s day-to-day business from the types of products and services it produces to how it delivers them. Simply implementing technology alone doesn’t bring about digital transformation but changing an organization to reap the potential of those technologies does. A 2011 study by the MIT Center for Digital Business and Capgemini Consulting examined 157 executives in 50 companies with $1 billion or more in annual revenue. The study found that to transform, organizations need to retool their underlying business and operating models and resulting products and services.

But digital transformation can be also confusing. Is it about how to get all equipped with shiny new devices and report up. To focus on the right things is extremely important. Capgemini Rahul Gupta, vice president of enterprise applications is alerting about a potential problem of band-aid approach in digital transformation:

“Everyone, including all your customers, is using digital devices to get information from your business and access to your transaction tools,” said Rahul Gupta, vice president of enterprise applications at Capgemini, a consulting and technology services firm. In the recent past, Gupta saw most businesses took Band-Aid approaches to digital transformation projects. They focused on the front office and updating user interfaces to improve the user experience for customers using digital devices, he said. Now, more businesses are seeing that digital technology must be implemented on the back end, too.

This message is resonating to my thoughts about how digital transformation is related to PLM activity and strategy. Digital transformation is an enabler on top of PLM systems. However, there is a second aspect too- PLM is enabling digital transformation by providing technologies, infrastructure and tools without accessing to the data. Therefore, digital transformation is depended on the process of getting data from PLM environment and backbones through the digital capabilities.

Unfortunately, I see a problem with the last one. Most of PLM digital transformation projects are so called app modernization and focusing on a development of new applications, mobile access, user experience improvement. None of these projects, in my view, is taking digital transformation to the core and considering to change fundamentals of PLM backbones.

And the core reason for that is aging PLM technologies provided by all PLM vendors today. All major pure platforms coming from Dassault Systems, Siemens PLM and PTC are technologies developed 20-25 years ago. These products are mature and stable, but at their core capabilities, these products were developed at the analog age. After all, most of digital user experience projects are essentially lipstick on a pig. The nuts and bolts of PLM system and experience didn’t change. Those systems are clunky and complex. Most of digital transformation work that vendors are doing is yet another layer of software applied on top of existing platforms, data models, workflows and… technological limitations.

What is my conclusion? PLM vendors are potentially focusing on a wrong priorities by trying to refurbish their product facade and add digital experience. Digital transformation is a full stack activity requires also to focus on future PLM back-ends. PLM industry is standing in front of dilemma – to keep existing mature product stacks and architecture up and running or to come with alternatives. The latest is not simple because it can be expensive and disruptive at the same time. But the fundamental ROI in new PLM projects combined with the need to transform business in a digital era, can bring PLM vendors to the inevitable decision point. The decision to hide might not work at this stage and can be very risky for the sustainable future of PLM businesses. 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 can be unintentionally biased.

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  • Oleg I am a bit surprised by your post warning PLM Vendors can miss digital transformation. I am more afraid many companies are going to benefit less from digital transformation or even disappear if they do not transform their PLM. The majority of companies manages their product innovation still in old linear and document-driven processes and systems.
    You mention “Most of PLM digital transformation projects are so called app modernization etc…..” I have not seen many real PLM digital transformation projects. Most current projects are indeed upgrades or a little extend of the old/current PLM.

    I think we share the same vision about a services-based PLM infrastructure, which is not based on a single massive system. However seeing startups in this domain failing due to lack of awareness/skills in companies makes me realize that the need is not yet identified in companies.

    Human beings are the bottle-neck for disruption. There will be always good and bad technology. If a company has a vision what they want to achieve, the can implement the vision. For the moment the vision is still on maintain a lot the old status quo in a modern look-and-feel

  • beyondplm

    Jos, thanks for sharing your observations!

    I think, you’re absolutely right- people are main bottleneck for transformation, because humans don’t like the change. This is not a surprise and therefore lot of companies implementation document driven process are stuck with these processes and don’t like to move forward. And I agree, there is a chance PLM can help manufacturing companies into their digital transformation journey.

    But… my point is PLM vendors. Although all vendors are talking about “digital era”, they do very little to transform their backends. Digitalization seems like an app modernization. So ,we can see new “digital experience”, which is relying on old fashion document management driven backend infrastructure.

    I didn’t think about it, but you comment actually is a good reminder that many “digital transformation” projects can stuck with old PLM systems refurbished for digital era.

    Thanks, Oleg