What PLM vendors can offer in exchange of ownership of your data?

What PLM vendors can offer in exchange of ownership of your data?

For many years, PLM companies lived with the vision and value proposition of single source of truth (SSOT). Last month in Chicago during PLMx session, I shared my ideas how PLM can extract more business value from PLM. Check my article here.

The idea of digital value chain sounds appealing to me. PLM vendors should come to the point of rethinking value proposition. To lock data in PLM data bases, to control it and call it single source of truth was the mantra of last 2 decades. Engineering, manufacturing and business people in industrial companies are looking for business value, intelligence and connectivity of data located in multiple databases and connected data sources.

My attention was caught by few articles published by Aras’ Mark Reisig where he speaks about Lifecycle ownership and digital dexterity – Developing your digital dexterity and Own the lifecycle. Check the articles and draw you opinion.

In a nutshell, articles are proposing “to focus on the forest”, which is in other words – data. The idea is simple company should own data about product lifecycle.

Today, global organizations are rethinking how they use product data. They’re turning to more open and flexible approaches to creating a more digitally connected enterprise, attempting to use product data across the entire lifecycle to drive their business velocity, increase their customer centricity, improve their use of data to make data-driven decisions, strengthen their ability to innovate and execute, and to quickly adapt to changing market realities

The shortest path to meeting your future customer’s unmet needs is to “Own the Lifecycle”.  This is at the heart of any organization’s digital transformation journey.  Anyone can talk a big game, but to really own the customer experience, you must own the product lifecycle. This is easier said than done due to the complexities of existing legacy systems—based on outdated architectures and sub-optimal processes—that exist in many manufacturing organizations. The answer is not a monolithic PLM system with static integrations pretending to be some type of backbone. Rather, it is an open platform approach that provides the flexibility to optimize your processes and select technologies you need with customizations, where applicable, to connect your product data across the lifecycle.

As much as I can understand, ownership of lifecycle is not different from single source of truth. The picture below shows no difference with dozen of other pictures with PLM as a SSOT (single source of truth).

PLM system is capable to connect and flow data between departments and people. But how to sell this new package to manufacturing companies? Where is the value of PLM? I doubt “replacement of old systems” can give enough value.

Here is an interesting passage:

Many organizations pursuing DXs often unknowingly lock themselves into a particular vendor’s technology stack and pricing. When the competitive landscape shifts and their vendor no longer supports their needs, they find themselves stuck. These closed dependencies are like hidden landmines, waiting to go off when you most need to flex. All enterprise technology should be open (published open APIs and schemas) so you can truly give your organization the ability to pivot, respond, and scale up and down as the market demands.

Moving data from one system to another system has limited value. What is different (with Aras) is an open platform, transparent data schema and open API. Moving data from outdated systems to open platform has a value, but would it be enough to provide a compelling reasons for manufacturing companies to shift from old PLM systems? On the paper, all PLM companies are supporting openness (http://beyondplm.com/2018/11/29/empty-promises-plm-openness-customers-cannot-quit/), which makes marketing and sales of PLM a nightmare of differentiation.

The ugly truth that PLM businesses are fundamentally dependent on data ownership. Nothing is changing from calling single source of truth by another name – ownership of lifecycle. There is something, new PLM companies should sell to manufacturing companies in exchange of ownership of their data. And this is “something” should make a new PLM deal obvious for manufacturing companies like paying for clicks in early days of Google advertising or searching for products on Amazon.

What is my conclusion? The rise of open platforms is an important movement in PLM space. By introducing unprecedented combination of openness, free licenses and new type of services, Aras moved the needle of PLM into a new place. But, this is only a beginning of change. PLM companies should find a way to come to a position to impact a revenue stream for a company. Without that, new PLM openness will be DOA. This is not a simple thing to do. But, otherwise, ownership of lifecycle will remain another buzzword in a lingo of PLM marketing. Just my thoughts…

Best, Oleg

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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