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Trends

PLM and Unknown Unknowns Use Cases

by Oleg on April 29, 2013 · 0 comments

Recent tragic event in Boston, raised again the question about critical role of real time information integration. You may think, it is not something that related to engineering and manufacturing software. Until recent time, I’ve seen it exactly in the same way. However, with the latest trends in the developing of data and information systems, I can see how big data, data analytic and analyzes can be used by business enterprise software too. Getting back to events of 9/11, Donald Rumsfeld, US Secretary of State for Defence, stated at a briefing: ‘There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.’ Originally “unknown unknowns” statement was considered as a nonsense. However, if we think twice, the concept of unknown unknowns might be relevant to many companies in manufacturing.

One of the key roles of PLM these days is to help companies to innovate. There are some many definitions of “innovation”. You can think about innovating organization, innovative processes. Here is the thing. Most of companies these days are afraid about how not to get “surprised” by innovation coming from unknown innovators, competitors and other factors – new economic condition, financial impacts, new product segments, cross domain innovation, etc.

In my view, the key element of preventing “unknown unknowns” impact is to get better analyzes of the data in your company and outside. Companies owns a lot of data business data, stored in databases and mainframes behind the firewall. This is “known knowns” because in this area business decisions are generally made based on historical data. This is where PLM/PDM operates today. There are lots of data that mostly unstructured and resides in emails, blogs, internet, websites, etc. This is a place of “known unknowns”. Companies dealing with big data and some others are trying to solve today. The biggest danger is coming from unknown unknowns. We need a solution to fix it.

What is my conclusion? There are many things that can influence manufacturing organizations. We live in a very dynamic world. Market conditions are changing, new competitors are entering market in a very disruptive way, financial market influence, employees turnover. These are “unknown unknowns” of PLM and future innovative solutions software vendors can come with to market. Just my thoughts…

Best, Oleg

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Product Lifecycle Exhaust

by Oleg on April 24, 2013 · 0 comments

Do you think Big Data and noSQL are the last and coolest trend in data world? No way. Software architects and geeks are sleepless to find new and unknown trends and opportunities. Last week I attended COFES 2013 in sunny Arizona. The following buzzword caught my attention during one of the presentations. Here is a new buzzword – Data Exchaust.

I tried to find a better definition of what this term means. There is no consolidate view about that. The I found the best explanation about what is Data Exhaust on IT Law Wiki. Navigate your browser here. It provides four different definitions. The following one resonated the most with my way to think about data exhaust:

The “aggregation of [consumer] data through the digitization of processes and activities” in the commercial sector which generates metadata supporting corporate profit generation.

Here is a picture I captured during COFES 2013 presentation. It shows the idea of data exposed out as a result of mobile device usage.

Data exhaust is tightly connected to some notions of big data. Another interesting article I captured was a publication from O’Reily Strata website. Navigate to the following link to read the article – Tertiary data: Big data’s hidden layer. The article is worth reading. We are producing lots of data these days and this data can be very valuable. Unfortunately, we are far behind in our ability to capture the data we are producing and getting a value of this. Here is an interesting passage:

Back in the days of floppy disks, the lines of ownership were pretty clear. If you had the disk, the data was yours. If someone else had it, it was theirs. Things these days are much blurrier. That tertiary data — data that’s generated about us but not by us — doesn’t just build up on your mobile devices of course. Other people are building datasets about our patterns of movement, buying decisions, credit worthiness and other things. The ability to compile these sorts of datasets left the realm of major governments with the invention of the computer. We’re all aware of this, and there’s even a provocative buzzword to describe it: data exhaust. It’s the data we leave behind us, rather than carry with us.

I captured the following picture from the same article. It shows a visualization of iPhone location tracker.

Data exhaust conversation made me think about Product Lifecycle Exhaust. In everything PLM does today, we are very focused on how we create data during the engineering and manufacturing stage. PLM products provide little to none attention to the information products produce during their lifecycle. The situation is better for long lifecycle articles like airplane and nuclear submarines. But this is where PLM attention to lifecycle information ends.

What is my conclusion? Cost and quality are two top priorities of every manufacturers. In my view, data exhaust can be an interesting source of information about how to improve quality and reduce cost. We can learn about usage experience of our products, we can discover what features are not used by customers and we can learn how to optimize products in order to serve our customers in a better way. Just my thoughts. Do you see it the same way? Speak up. I want to know your opinion. If it resonates, come with examples, please.

Best, Oleg

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How PLM can adopt Sales 2.0?

by Oleg on April 22, 2013 · 0 comments

The last decade was all about 2.0. To me, 2.0 trend was about how to re-think existing norms and behaviors, re-invent something well-known and to challenge existing axioms. Internet changed a lot in our life for the last decade. One of the places that remains very conservative is enterprise sales. If you are social web enthusiast, tech geek or iOS developer, try to speak to people selling to big enterprises. You can find yourself in the wrong territory after first 5 minutes of talk. However, I can see how changes are coming to this place too. In the beginning of this year, I tried to challenge my friend from enterprise sales department. If you missed my previous blog, navigate here – PLM, Viral Sales and Enterprise Old Schoolers. One of my conclusions after this post was that even enterprise sales has strong roots, the time is coming to challenge the current status.

I’ve been catching up on emails and social media during my long journey from Boston to Singapore this weekend. The following Gigaom article caught my attention – Enterprise 2.0: The science of inside sales. Take five minutes of your time and read the article. Freemium was a king of the road in consumer market for the last 3-5 years. It seems to me everybody read the “Free” bible by Chris Anderson. I remember my note back in 2009 – Is Free the future of PLM? What I found very interesting in Gigaom article is the idea of merging of two parallel models – freemium and direct sales.

At the end of the day, it is all about setting cost and price. If your cost of the sale is high, you have no chance to scale up and sale to mainstream market. I found the following passage important:

In contrast to traditional outside sales, which is done in-person and tends to involve extensive travel and time expenditures, inside sales is professional B2B sales done remotely via phone, email and chat. It is strategic selling that requires managing a deal through a multi-stage process, multiple touch points with the customer, establishing value and an ROI for the product and supporting complex purchasing methods, like procurement departments, but importantly without visiting the customer.

Another interesting snippet brings you cost vs. price model that can take you beyond the threshold of free online business and allows you to have sales people.

So how do you know if you’re ready to build an inside sales team? Truthfully, if the product is shipping it’s never too soon.  A key test is the price at which you are converting free users to paid. There are a lot of apps that only charge 99 cents or $4.99 a month for the premium version. That won’t cut it – your margins won’t support a sales force. You’ll need a price point of at least $25 to $50 per user per month to validate the value of your product and make enterprise sales work. At that price or above, a workgroup of 10 to 20 users can be sold within a customer account for $5,000 to $10,000 per year. Over time, you’ll be able to increase the deal sizes through premium features like administrative functionality.

And finally, you can see an enterprise example, which probably can make sense for PLM sales too.

The typical inside rep will make $40,000 to $60,000 per year in base salary. Including bonus, their on-target earnings (OTE) will be between $100,000 and $120,000. Most Enterprise 2.0 startups are subscription businesses, so quotas should be tied to Annual Revenue Requirement (ARR) or Monthly Recurring Revenue (MRR) with accelerators for contract lengths greater than one year. A typical quota for your first rep is $500,000 of ARR. Over time, enterprise sales reps often settle around a $1 million quota.

The conversation about inside sales made me think about what PLM vendors potentially can do in order to step into the future of Sales 2.0. Here are 3 fundamental steps:

1. Delivery model. Your should be able to deliver your software without CD/DVD and people that need to come and install it. Call it cloud, online, distributed software – it doesn’t matter. You need to exclude a traditional delivery mechanism driven by traditional software development methods and long awaited releases.

2. Online configuration. After you learn to deliver software online, you need to switch an army of consultants, implementers and service providers to work online. Stop pay to airline tickets. All software configuration and tailoring must be done online.

3. Application and granularity. The nature of application is going to change. We should stop a monolithic nature of enterprise software. In the past, it was important to sell “all-in-one-box”.  In order to support “inside sales” model, business software needs to have an ability to be deployed in a granular way. Some portions of applications can be provided for free, then configuration should allow to turn on licensing feature and  Voilà - you converted your free customer into paying one.

What is my conclusion? The new technology is ready for enterprise. It proven by multiple startup companies and giants of consumer software business. However, enterprise companies are tricky and enterprise sales are even more tricky. Both sides – sellers and buyers are keeping an existing enterprise sales model. This is their life jacket to survive and keep an existing enterprise sales model afloat. The time is coming to disrupt it. Just my thoughts…

Best, Oleg

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The future of PLM Glassware?

April 19, 2013

Technological predictions are tough and nobody wants to make them. Back in 2010, I came with the following post – Who Can Generate 3D/PLM Content For Apple iPad? Back that time, the value of iPad was questioned by many people. Speaking about manufacturing companies, people were very skeptical by the ability of iPad to bring [...]

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Will New Jazz Product Development Model work for PLM?

April 13, 2013

The world around us is changing much faster these days. It happens in many places. Business environment are much more dynamic. New technologies are disrupting existing industries and eco-systems. PLM systems were developed to help companies to manage and follow product development processes in the companies and extended eco-system. As businesses are going through the changes, [...]

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PLM Focus Debates and Strong Anglo-Saxon Vocabulary

April 5, 2013

Working with engineers is like herding cats. Try to put few engineers in a room and get an agreement. If you have 4 engineers in a room, you probably will have about 5-6 opinions about what is the right way. No surprise. That’s what happens when engineers are trying to agree about what is the [...]

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Mobile PLM Native Apps Challenge

April 4, 2013

Native Apps vs. HTML5 enabled web user experience? This is a dilemma for many developers these days.  People are spending more time using native apps comparing to mobile web optimized sites. However, enterprise software companies have an additional challenges to transform their product suites into set of native mobile apps. Multipleplatform development tax and application [...]

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“PLM journey” and thoughts about technology

April 3, 2013

PLM implementations are complex. How many times have you heard about that? I think a lot. Last 15-20 years of PDM/PLM business demonstrated that PLM and ease of implementations are not coming together. If, in addition to that, you ask for low cost, people might be thinking you are joking. I’ve been sharing my thoughts about PLM [...]

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PLM Developers – what is the right mobile platform?

April 1, 2013

Mobile is coming to enterprise. Blackberry was a first device who cracked mobile enterprise. Enterprise mobile email delivered by Blackberry was king of the road many years. Then came iPhone, iPad and many other devices. The development for different mobile platforms is skyrocketing. There are many questions here. Every PLM vendors did a first step [...]

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What Oracle Results Mean for PLM vendors?

March 29, 2013

For many years the business model of CAD, PDM and later PLM vendors was structured as high upfront license combined with continues maintenance payments. The same is true for many other enterprise software vendors. PLM vendors built their businesses around expensive licenses sell covering significant sales cycle cost and even pilot implementations. The majority of [...]

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