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signs-to-change-plm-system

Happy New Year! This is my first post in 2015. Internet is overloaded with new things, trends and New Year resolutions. It made me think about new PLM. Should you plan a new PLM in a New Year? I think, this is a good theme for a New Year post.

To implement PLM is not a simple task. It takes time and resources from organization. After PLM is passing the initial adoption phase, it becomes a valuable organizational IT asset. Nevertheless, as everything else, it can get old, inefficient and expensive. So, what are those signs that can tell that your organization should start thinking about new PLM software? I wanted to come with 5 signs that can indicate you need to find a new PLM system.

1- It gets harder to make changes and support new processes

Nothing is static. New products, changes, new problems, business requirements – this is only a short list of things that can bring you to the point of PLM implementation enhancement and changes. A well designed and implemented PLM system should be flexible enough to adapt to new processes, integrate with new tools and solve business problems with a reasonable cost.Usually, it related to 3 major elements of PLM system – data model, integration with other tools and compliance to new versions of design tools, databases and operation requirements. If you feel that every new project is a big deal, changes are costly and new requirements are impossible to implement – it is a moment you should think about replacement.

2- Workarounds are proliferating

Another good sign that something goes wrong with the existing system is to watch how people are avoiding to use it. Watch internal IT projects that delivered functionality similar to what is demanded from PLM system. To monitor that, you can check main engineering tasks related to new product introduction, BOM management, ECO/ECO, data collaboration, supply chain and design sharing. You can see how often engineers are preferring to use PLM system alternative (Excel, SharePoint, Google Drive, Email, etc.) to get job done instead of PLM software. If it happens too often and you can see resistance to use existing PLM software, something is wrong and this is a moment to think about replacement.

3- The use of PLM in organization is not growing

The nature of PLM system is connect people in organization. PLM provides an information hub that can streamline processes and deliver information. A good indication that things are going well is a growing number of people using PLM system. It is easy to get this information from monitoring existing system. Watch how departments, teams and people are using PLM system. If the usage is growing, you are in a good shape. However, if you see a decline or stagnation, it is a sign of a problem. This is still not a reason for change, but it is a good indication something is going wrong.

4- Support & Maintenance cost is increasing

This is an indicator of how healthy is your PLM provider. It is not unusual for software companies to raise maintenance cost at the end of software lifecycle. Essentially, it means organization is looking for an additional compensation to cover cost of support and maintenance. There is nothing wrong to pay for support. However, in case of increased support cost, the recommendation should be to look for strategic alternative before vendor will shutdown a product and it will become non-compatible with new hardware and software.

5-  Product or vendor have merged or went out of business

Mergers and acquisitions can happen. If PLM vendor and product got involved into M&A activity, you need to watch carefully the situation. The product you are using can be discontinued and merged with another product. Depends on vendor and situation it may take years until product will be discontinued. However, as a customer, you may see some strategic changes in a way new requirements will be satisfied or strategic effort will be applied.

What is my conclusion? Lifecycle is a natural thing. PLM software has its own lifecycle. It is important to watch carefully the way PLM vendor and product are performing and take decisions accordingly. Poor software performance and poor vendor performance can lead you to the right decision. To get there on time is your responsibility in today’s dynamic business environment. Just my thoughts…

Best, Oleg

photo credit: reidrac via photopin cc

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What is PLM software replacement cycle?

by Oleg on December 12, 2014 · 2 comments

plm-recycle

PLM selection is complex process. It takes time to make a decision, evaluate, build a pilot and implement PLM system. I’ve been thinking about how this process can change in the future. Navigate to my Future PLM selection post to catch up. One of my discoveries was the following data point about age of ERP system.

Bluelinkerp blog – When should you replace your ERP software brings an interesting diagram – the majority of ERP implementations is up to 7 years old. The chart based on data provided by Aberdeen study – Aging ERP – When your ERP is too old.

erp-system-age

This data point is not scientific, my I can predict that company is replacing ERP system every 7-10 years. This number is actually aligned with similar numbers I’ve heard from ERP resellers in the past.

It made me think about replacement cycle of PLM systems. I guess we can probably see a similar trend in the PLM market too. PLM systems are aging and we can probably discover lifecycle of PLM implementations. Sort of PLM recycling. I’ve been trying to find some information to support it, but didn’t find much references online.

Joe Barkai’s blog – Product Innovation Congress 2014 San Diego brings some interesting fact about PLM system replacements. Here is the passage from Joe’s blog.

There appears to be much activity in selecting, replacing and upgrading PLM software. Some were first time PLM buyers, but there were a surprising number of companies expressing dissatisfaction with the exiting solution and seeking a “better” PLM system. I did not conduct a structured survey, but anecdotally it appears that a good number of those in search of a PLM replacement are users of ENOVIA SmarTeam and ENOVIA MatrixOne.

My observation: The continued search for a “better” PLM system will continue to drive activity and put pressure on PLM vendors to deliver greater value in enhanced functionality, lower cost, faster deployment, and new delivery and ownership models. The move of reluctant PLM vendors such as Oracle Agile to offer a cloud delivery model is but one recent example and I except other PLM vendors are in the process of following suit. This dynamic keeps the door open for vendors such as Aras PLM that continues to challenge the hegemony of the incumbents.

That being said, buyers should realize that the PLM software itself isn’t a substitute or remedy for flawed and suboptimal product development processes. For each dissatisfied PLM user company you will find many others who are highly successful and are able reap the full potential of the very same PLM software. It isn’t the SW. It’s you. Don’t blame the vendor.

My hunch most of large manufacturing companies already made few PLM system implementations. They made mistakes and probably want to fix them. In addition to that, businesses and systems requirements are evolving. People turnover is another factor. Enterprise systems lifecycle can be triggered by new people coming to the role of managing enterprise and engineering IT. So, 7-9 years, is a good time period to make analysis, fix problems and re-think PLM implementation and strategy.

What is my conclusion? Understanding of PLM software replacement cycle and lessons learned from an implementation can help to build a better PLM industry eco-system. It is less about blaming vendors of companies for software problems. It is more about understanding of business, technologies and implementation needs. Just my thoughts….

Best, Oleg

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Why all PLM software will be SaaS soon?

by Oleg on November 26, 2014 · 0 comments

plm-cloud-dream

I’ve be sharing many of my thoughts about how different cloud technologies can be used to implement PLM. Nevertheless, once in a while, I’m also getting comments and questions about acceptance of cloud PLM for large companies. Usually, it comes in the intersection of security and readiness of large manufacturing companies for cloud (SaaS) software.

TechMVP article – The benefits of SaaS transformation: both the obvious and non-obvious shows some very interesting perspective on that topic. Let me go straight to security question:

The second common objection stems from the thought process amongst large enterprise CIOs regarding whether to allow certain applications to live outside of the enterprise’s firewall.  IT managers and executives – sometimes speaking about legitimate security concerns and sometimes speaking to protect their jobs – stand in the way of core applications moving to the cloud via a SaaS vendor.  At the same time, these same decision makers have adopted Salesforce.com for CRM, and allow unencrypted email between employees and non-employees, thus calling into question the sincerity of their argument against other SaaS applications.  The successful adoption of CRM in the cloud has opened the floodgates for virtually all other types of applications to move to the cloud even over the objections of certain IT managers.

Towards this end, we have seen in recent years the advent of ERP (FinancialForce, Workday), Marketing Automation (Eloqua, Marketo), and Software Development or ALM (GIT and Rally Software) in the cloud.  These types of applications manage information that is often considered the “crown jewels” of corporate data, and thus are the types of applications that some thought would never take root in the cloud.

I can observe a significant growth of SaaS software adoption by manufacturing outside of pure engineering domain. You can see software in different categories – ERP, CRM, marketing, project management, software lifecycle management and many others. Imagine manufacturing product with software code managed using GIT? What will be the point to reject PLM system managing engineering bill of materials in the cloud?

Another interesting perspective is related to creation of new software companies. The graph below demonstrate a complete dominance of news business starting SaaS companies.

saasapps

One more data point is coming closer to PLM business and related to implementation of ERP systems. Panorama consulting solutions published an interesting 2014 ERP report, which speaks about type of ERP systems implemented in 2013. As you can see on-premise and hosted system is accounting together for 96% of all systems.

type-of-erp-software-2013

What is my conclusion? I wonder what percentage of new PLM systems implemented in 2014 will be SaaS. The number is probably not very high. However, traditionally, it takes long time to decide about PLM system. My hunch, that broad adoption of SaaS software in other domains will push manufacturing companies to evaluate more PLM systems and make their decision faster than before. SaaS lower risks and upfront cost, which can be an additional factor for manufacturing companies to taste cloud PLM sooner than later. Just my thoughts…

Best, Oleg

photo credit: Robert Hensley via photopin cc

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PLM vendors, large manufacturers and public cloud

October 14, 2014

Companies are moving to cloud these days. The question vendors and customers are asking today is how do we move to the cloud. I’ve been asking this question in my post few month ago – PLM / PDM: Why the cloud? Wrong question… I discovered multiple options for customers to start their move to the cloud […]

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PLM implementations: nuts and bolts of data silos

July 22, 2014

Data is an essential part of every PLM implementation. It all starts from data – design, engineering, manufacturing, supply chain, support, etc. Enterprise systems are fragmented and representing individual silos of enterprise organization. To manage product data located in multiple enterprise data silos is a challenge for every PLM implementation. To “demolish enterprise data silos” […]

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PLM for Small Teams – Autonomous Alignment

June 19, 2014

This week is very fruitful for PLM events. PTC Live 2014, Siemens PLM connection, GrabCAD media event. Twitter and other social networks can help you catch up with multiple events at the same time with minimum time. So, in 1-2 hours, you can get up to speed with news and updates. Chad Jackson’s and Allan […]

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What PLM vendors can learn from manufacturing startups?

June 13, 2014

About half year ago, I was looking for bluetooth location trackers. The solution that caught my attention was Tile. I liked the slick video and interesting design. At that time I learned that Tile grabbed $2.6M via crowdfunding – very remarkable result. However, I noticed that solution is not available. I followed Tile since than […]

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PLM Implementations Challenges and 3 Organizational Lenses

June 4, 2014

It is not unusual to hear people speaking about PLM implementation and changes that need to be done in the organization. Very often, PLM vendors or implementers are calling this process business transformation, which is literally supposed to make a change in everything that related to product design, engineering, manufacturing, support and services. So, to […]

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PLM Services, Department Stores and Digital Future

June 2, 2014

Don’t be surprised if your most trusted CAD/PLM service provider will be acquired tomorrow. According to Joe Barkai’s post- PLM Service Providers Ready To Deliver Greater Value, we have been witnessing a wave of mergers and acquisitions of PLM services companies (the examples – Accenture / PRION Group, Accenture / PCO Innovation, KPIT-Tech / I-Cubed […]

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Will PLM Vendors Jump into Microsoft Cloud Window in Europe?

April 10, 2014

Cloud is raising lots of controversy in Europe. While manufacturing companies in U.S. are generally more open towards new tech, European rivals are much more conservative. Many of my industry colleagues in Germany, France, Switzerland and other EU countries probably can confirm that. Europe is coming to cloud systems, but much slower. I’ve been posting […]

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