PLM consulting is an interesting part of PLM business. Traditionally, PLM projects were big and expensive. When you about to pay millions to PLM vendor and service providers, you better check yourself and hire consulting people. Even for small and midsize projects consulting service can pay off.
Last year I shared my thoughts about how to disrupt PLM consulting and services. But PLM consulting isn’t perfect. These are specific elements of PLM consulting – organizational transformation and specific skills of PLM products.
PLM consulting and advisory is heavily focusing on organizational business transformation. These projects are typically involving understanding of manufacturing company business model and product development process and combining it with the knowledge of PLM tools. However, the last one is usually not in the focus of PLM consulting. At least not as it is advertised. PLM consulting is usually advertised as vendor neutral. And it should be that way.
Things are usually getting very vendor and PLM software dependent when it comes to implementation consulting and services. PLM projects are considered very labor and service intensive. Every PLM product is advertised to be insanely flexible and configurable. However, when it comes to implementations, customers are demanding high level of software vendor or consulting partner involvement.
PLM consulting and service is very labor intense, dependent on unique knowledge and availability of knowledgable people. In my view, it is the biggest factor preventing PLM vendors from scaling their business. I’m not talking about top OEM implementations. These companies are paying lot of money to PLM vendor and will continue do it in foreseeable future. However, for many middle size and smaller manufacturing business, PLM practices are our of reach and dependent on PLM consulting and service offering that cannot scale much in its current business status quo.
Over the week, I was reading CBInsight article – Killing Strategy: The Disruption Of Management Consulting. What I found is very much resonated with my thoughts about PLM consulting. Too much focus on strategy and business transformations in a company while missing elements of adapting PLM implementation processes for a specific company. The gap is a place where a failure of many PLM processes – disconnect between planning and practical steps, over spending and slow ROI.
According to CBInsight, here are 4 functions of consulting:
1- Information: The data and analyses that take the client’s world, industry, and market position and make sense of it. 2- Expertise: An experienced operator’s perspective on a problem and the different ways that it can be solved. 3- Insight: The rigorous, analytical application of expertise to data to come up with insights that will help the company succeed. 4- Execution: The roadmap to choosing and implementing the changes to be made.
Check the article and examples of consulting transformation in consulting industry. Here are my two favorite examples – 1- Experts on demands from GLG and 2- Balance between inside and outside work in consulting projects.
An example of GLG shows how network on consulting people can be used for expertise in variety of topics.
GLG retooled the company to focus on connecting experts with people who needed them. Ironically, with this new business model, the company found that management consulting firms — often hungry for very specific, niche expertise — were some of its best customers.
“You could call what we do consulting, but it isn’t, really,” GLG President and CEO Alexander Saint-Amand told Recode. “We’ve done millions of projects. Our members have answered almost 100 million questions on our various sites. But the primary experience is a one-to-one phone call or meeting.”
The popularity of expert networks has risen significantly in the last decade as banks, hedge funds, and others have found the value in on-demand industry experts. In 2008, companies less than $100M on expert learning networks. By 2017, that number was $800M and rising.
Another example is balance between internal legal work and legal firms hired on demand.
Over time, as outside law firm fees rose higher and higher, companies started to look for alternatives. Globalization was driving new transnational legal issues, and this increased complexity made it beneficial for business leaders to have legal support close and on-call at any time. Moreover, with an explosion in the general amount of litigation and activism across the world, corporations realized they needed to “make” expertise “inside the organization,” as attorney Ben Heineman puts it, rather than “buy” it outside the organization.
Forty years later, it is usually the corporate GC (general counsel) who most closely advises a company’s CEO on legal matters — not some senior partner at a corporate law firm. While corporate law firms have their purpose, corporations now mostly prefer to keep their legal work in-house. Similarly, consulting and strategy teams could be increasingly brought in-house, rather than hired externally.
As Clay Christensen points out in the Harvard Business Review, the inside counsel model is made possible by the fact that general counsels and their staff today have access to powerful legal workflow and on-demand staffing tools like Axiom. They can get customized support from networks like AdvanceLaw. And they can outsource more basic tasks like “large-scale document and data review” to firms like LeClairRyan, which run leaner and cheaper than a conventional law firm.
So, here is my take on a possible path for future success formula in PLM consulting. It will come as a combination of 1/ internal company knowledge; 2/ network of consulting experts and 3/ technology and product services available on demand.
What is my conclusion? I will draw the following path in PLM consulting disruption. There is a disconnect between PLM strategy and implementations. The time when manufacturing companies outsourced PLM strategy and business transformation consulting is coming to the end. It will be PLM consulting disruption can come in a way of new balance between internal company knowledge combined with a network of powerful experts and generic implementation services provided by companies specialized in technologies and PLM products. Just my thoughts…
Best, Oleg
Want to learn more about PLM? Check out my new PLM Book website.
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.
