Why PLM consultants are questioning new tools and asking about cloud exit strategy? 

I want to continue my dialog with Jos Voskuil, PLM business consultant and PLM coach. If you’re just catching up the conversation, check the following articles:  Why traditional PLM ranking is dead. PLM ranking 2.0?  How to democratize PLM knowledge and disrupt traditional consulting. Some interesting thoughts came over the weekend from Jos’ article – The death of PLM consultancy? As Jos mentioned in his comment earlier “a catchy title is always good for a blog post, in particular using the word dead always scores“.

I agree with Jos saying that company should own the decision process and come to tool selection only after companies knows what to do.

If you hire consultancy firms just for the decision process, it does not make sense/ The decision process needs to be owned by the company. Do not let a consultancy company prescribe your (PLM) strategy as there might be mixed interests. However, when it comes to technologies, they are derived from the people and process needs.

At the same time, Jos is questioning potential problem with cloud tools.

One of the uncomfortable discussions is when discussing a cloud solution is not necessary security (topic #1) but what is your exit strategy? Have you ever thought about your data in a cloud solution and the vendor raises prices or does no longer have a viable business model. These are discussions that need to take place too.

Just few years ago, security was considered as one of the biggest risks for companies to use cloud based software. Not anymore. Cloud adoption is growing. Security is an important question, but based on latest surveys made by CIMdata, the biggest concern today is how to integrate existing IT stacks with cloud services. Check my earlier article.

I agree, cloud might be still not for everyone. But the adoption of cloud is growing and it is becoming a viable business model and technology for many companies. I wonder how “cloud” problem is related to the discussion about the death of PLM consulting. And…  here is my take on this. It is all about business model transformation.

Cloud brings transformation to the business and disrupting existing business models. IT was originally in the opposition to cloud technologies. It was a big  change to old IT business model. Cloud IT was disrupting traditional IT. But IT organization adjusted their business models and found ways to make business in new situations and business conditions. Cloud is transforming PLM business. Large on-premise PLM projects require large capital budget. It is a very good foundation for existing PLM consulting business. SaaS subscription is a new business model and it can be disruptive for lucrative consulting deals. Usually, you can see a lot of resistance when somebody is disrupting your business models. We’ve seen it in many places and industries. It happened with advertising, telecom and transportation. The time is coming to change PLM, engineering and manufacturing software and business.

There is an interesting passage in Jos’ blog about the role of tools and technologies as well as marketing of software companies. Here is the passage:

Don’t try to find answers on a vendor website as there you will get no details, only the marketing messages. I understand that software vendors, including Oleg’s company OpenBOM, needs to differentiate by explaining that the others are too complex. It is the same message you hear from all the relative PLM newcomers, Aras, Autodesk, ……. All these newcomers provide marketing stories and claim successes because of their tools, where reality is the tool is secondary to the success. First, you need the company to have a vision and a culture that matches this tool. Look at an old Gartner picture (the hockey stick projection) when all is aligned. The impact of the tool is minimal.

I think Jos is missing the point with regards to these vendors. The difference is not in marketing, but in the process of PLM tool democratization.  Jos mentioned three companies  – Aras, Autodesk, OpenBOM (disclaimer- I’m co-founder and CEO of OpenBOM). All these tools have one thing in common. You can get the tool or cloud services for free and try it by yourself before buying. You can do it with Aras Innovator, which can be downloaded for free using enterprise open source. You can subscribe for Autodesk Fusion Lifecycle and OpenBOM for trial and free subscriptions. It is different from traditional on premise PLM tools provided by big PLM players. These tools  require months and sometimes even years of planning and implementation including business consulting and services.

What is my conclusion? PLM industry is transforming. And cloud technologies will play a fundamental role by bringing new business models, removing implementation complexity and breaking communication silos. Cloud technology can democratize PLM and turn it from lucrative business tools targeting large enterprise to SaaS tools that can be used by large network on engineers, contractors, engineering and manufacturing companies of all sizes. Network effect created by these tools will make a huge impact on PLM industry. PLM projects will change their nature from large business transformation projects to agile and lean processes of adopting cloud services and tools. Each step will be a small progress towards transforming company product development processes. What about PLM consultants? Of course, we will need them – to help companies to build their vision and to shop for tools online. But, PLM consulting business will have to adapt to new business realities of cloud services and subscription business models. Just my thoughts…

Best, Oleg

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Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.