When it comes to PLM and ERP, you may always get some feeling of rivalry at the air. PLM and ERP domains are not competing. However, ERP and PLM vendors are clearly competing for customers strategic mindset. After all, it always comes to the competition for strategic budget allocation.
For many years ERP vendors came first to the corner office of CIO. These days some ERP dinosaurs are fighting for surviving in a new era of cloud computing and SaaS software. Toolbox.com article – 6 Reasons Why The Dinosaurs of ERP Are About To Go Extinct provides an interesting perspective on what happens in ERP software domain and industries today. 6 reasons in the article is the answer why traditional on-prem software solutions provided by companies like PeopleSoft are eaten by rivalry of cloud newcomers.
The article made me think about trajectory of some implementations and vendors in PLM domain. I can clearly see some similarities. Do you think some 20-30 years old PLM vendors will follow the path of the dinosaurs of ERP? Here are some of my thoughts about PLM domain and on-prem / cloud trends.
1- Old platforms need to retire
For the last 15-20 years, manufacturing companies adopted 2-3 generations of PLM software. For some of them (especially very large companies), the process of adoption was long and expensive. It took time to align processes and systems together. At the same time, technology is moving forward. To move forward, many customers need to drop old products and move to support new operational systems, hardware, devices, internet browsers, etc. It is obviously raises a question of how to retire old platforms. But this is a very painful question for many companies.
2- IT managers and upgrades
Upgrades are painful and IT is the department that traditionally spending a lot of resources and cost to upgrade all systems for a company. Cloud systems are going to change it. Since data centers and cloud infrastructure are owned by software vendors, they are also taking responsibilities for the upgrade. Some innovative PLM vendors such as Aras is including upgrades into their subscription also on on-prem installations.
3- Mobile and site independence
Our working environment is changing. 10-15 years ago, out work was mostly on site. These days the workforce is distributed. People don’t need to be at their desk to do a job. Multiple locations is a reality even for small companies. Mobile devices are in everyone pocket. To have a system that capable to work in such environment is an imperative for every company.
4- How to get small customers on board
PLM vendors made multiple attempt to provide a solution for smaller companies. It never worked. I can list number of products that were announced, retired and discontinued. However, the importance of smaller companies will only increase. New technologies and online market communities are making smaller manufacturing more competitive. It will bring an additional need for cloud PLM systems.
What is my conclusion? Manufacturing companies are slow in their adoption of new technologies. PLM never been a first place to innovate for cloud companies. But the reality of the outside world and online business are bringing manufacturing companies to the point that they will need to have a competitive software for product development and manufacturing. Old systems won’t survive and will have to retire. It is a time for PLM vendors to think about innovation and new platforms. Otherwise, it might to be too late to build and too expensive to buy. Just my thoughts…
Best, Oleg
