Legacy Systems and Future Coolness of PLM Software.

Enterprise software sucks. How many times we’ve heard that for the last 5 years? Probably too many… I remember one of the first articles about that back in 2007 – Why Enterprise Software Sucks? by Jason Fried. The article got almost 100 comments, which confirmed that the topic does matter. Earlier this month, I found an article re-thinking the view on enterprise software – Why Enterprise Software sucks – 6 years later. Take some time and read these articles. There is a clear confirmation that trend towards developing better enterprise software is positive. While you can still see lots of crappy software used by enterprise organizations, enterprise software and SaaS is seeing lots of innovation. At the same time, legacy systems is one of the main factors that prevents enterprise software from innovation. Here is a very important passage:

One of the main reasons that enterprise software sucks is because enterprises are still using software from the 1990′s (or worse). Putting traditional enterprise systems in place is expensive, time consuming, and requires massive customization. Once it’s deployed, it gets relied on by other software, workflows, and processes. Over time, it becomes mission critical and a load bearing wall. Companies are entrenched in their systems and don’t dare touch it if it’s “working” (think: Windows XP).

Let’s get back to PLM. Think about typical situation of manufacturing company using PDM/PLM legacy systems. The deployment cycle of legacy PDM/PLM systems is 3-5 years from initial product introduction and demonstration. Installation and customization can potentially take up to 1-2 years to get it done. As a result of that, companies are using PDM software developed back in early 2000s. The average investment into an existing PDM/PLM deployment can be in the range from $0.5M up to millions of dollars. The level of complexity to update an existing system is high. The migration is combined from multiple factors – data import, customization of new systems, people training. Companies need to pay a lot of money to re-implement software and processes, which is a complicated decision in terms of product ROI.

What is my conclusion? The roots of future enterprise software coolness is deep in enterprise legacy products. The ability to transfer data and processes from old systems to new environment and keep ROI of these projects high – this is a major goal of new enterprise vendors these days. Just my thoughts…

Best, Oleg