PLM digitalization: how to create a new value?

Digital transformation is key initiative for many organizations these days. Every organization these days understands that there is no alternative and digital transformation is the only way to survive in a new data driven world. However, when it comes to actually projects and plans, digital transformation can bring lot of questions.

Most of CAD and PLM vendors nowadays are fully equipped with digital transformation lingo and will try to sell you “PLM – Digitalization Style”. As much as slides and words are appealing, this is often old software in a new package. While PLM software can help you to transform organization and processes, I’d not recommend to jump into PLM digital transformation without future analysis and understanding of the deliveries.

There are two main ways digital transformation can be applied in the organization – 1/ improve existing processes; 2/ create new value. Let me give you some examples.

Improve Existing Processes.

As a manufacturing organization, you most probably use variety of communication channels and existing processes. By bringing PLM system to automate and centralize these processes such as change management and lifecycle control, visualization and engineering to manufacturing processes, you can improve the way organization is operating. These are important functionalities and no doubt must be addresses. To build PLM system to redefine processes, introduce automatic change order approvals and many other aspects of product development would be very interesting and beneficial. You will be clearly improving existing processes and sometimes even eliminating non-efficient processes at all.

Create new value

However, there is another aspect of digital transformation – creating a new value.  How it can be created? You need to analyze how digital technology can create a new process. Most importantly, it must be a process which didn’t existing before or (even better) wasn’t even possible without new digital technologies. What are possible examples of such transformation. My best example of new processes is to build them on top of data assets that can become available in organization because of new technologies.

Here are few examples:

1. Cross silos data models and analytics. Collecting and connecting data from multiple data repositories can create a new planning process (e.g. collecting actually manufacturing cost can create a new process of cost awareness and predication in the design stage and sales.

2. Making information accessible globally and remotely. New technology of data sharing can bring valuable data to the end point in organization that never had an access to these data. By doing so, we can help to organize a new processes in support, maintenance and supply chain that wasn’t available before.

What is my conclusion? To automate and optimize existing processes is very important. It can be valuable, but most probably won’t bring a huge business value with fastest ROI. Transformation of existing processes will take time, effort, education and organizational change. Leave it to some better times when your digital transformation projects will be more mature. However, if you think about dimensions of digital transformation that are not covered by traditional PLM or existing processes, that’s something you need to search for. You can find a process, which was not in your organization before and only (!!!) can be available with the usage of new digital technologies. Follow these process and you will find the most valuable digital transformation initiatives with fastest ROI and much lower cost. Just my thoughts…

Best, Oleg

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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.