PLM Services, Department Stores and Digital Future

PLM Services, Department Stores and Digital Future


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 /Akoya; Kalypso / Integware merge). The following passage gives you a feeling of the core reason behind that.

For years, PLM companies focused more on PLM /PDM implementation than on actually improving business processes. While the business benefits of PLM were well articulated and supported by rosy ROI models and complex colorful architecture slides, many manufacturing companies were unable to achieve the process changes and enterprise software integration that were need to reap the promised benefits, and ended up implementing a PDM system. Albeit critical for managing product data, this reality might explain why some manufacturers feel they might have overpaid for their PLM implementation efforts.

The status quo may be changing, and organizations that have gone through massive implementation projects are ready for more. They need to improve their capacity for more complex multidisciplinary decisions using product data, whether it’s stored in PLM/PDM, ERP or in other, less structured forms; they need to improve collaboration in elongated and fragmented design partner networks and supply chains; they need to leverage product and consumer insight garnered  from social media, warranty claims, and channel activities.

The story makes sense to me. In my post few weeks ago – Why PLM stuck in PDM?, I’ve been talking about exactly the same reasons behind a problem with deep and broad PLM adoption – (1) focus on CAD, (2) poor integration between PLM and ERP, (3) absence of process thinking, etc.

Joe’s article made me think about the role PLM service providers will play in the future PLM implementation strategies. It reminded me department stores. Think Macy’s, JCPenny, Bloomingdale, Nordstorm… Large manufacturing companies own a huge chunk of PLM software. Every PLM vendor has their own strong characteristics. One size doesn’t fit all. Customers’ existing investments are huge.I don’t see these manufacturing companies will start jumping between vendors. So, how to make existing PLM system work and show bigger value becomes very important. Which obviously raises the question about qualified service providers. Large teams and ability to implement any PLM software will be the key for success and profit. Customers will be coming to the PLM service department store and guided to the right brand(s) or configuration of brands depends on their preferences and constraints.

You may ask me who will play the role of Amazon in the growing PLM service eco-system? This is a very interesting question to ask. Will e-commerce come and disrupt B&M PLM services? Who will provide a new class of systems, which requires different service capabilities? Who will provide online PLM services in a lean way. Joe is mentioning Autodesk PLM360, GrabCAD and Aras in the list of potential candidates. Who knows…

What is conclusion? The history often repeats. To pay attention on existing trajectories and department stores and e-commerce is important. New e-commerce vendors are growing up, but  existing B&M department stores are selling lots of stuff. The same happens in PLM. Today, large vendors provide solutions for companies that ready to implement existing PLM software. It sounds like a good strategy for large manufacturing companies with deep pockets. Until the question about “lean and digital” will come up. Will online and lean PLM offerings compete with existing PLM vendors? This is a good question. There is a good chance for newcomers to play disruptive strategies. However, alternatives are possible as well. Either newborns in the cloud will outgrow existing B&M or existing vendors will develop right digital skills and experience. Just my thoughts…

Best, Oleg


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