Will PLM digital transformations fail because of enterprise data ownership?

Will PLM digital transformations fail because of enterprise data ownership?

Digital transformation is a new darling of technological marketing PLM. It is promising to transform processes and organize data and work in a much better way than companies did before. Imaging all changes in our consumer live in driving, communicating, shopping now applying to business transformation. I’m very much excited about digital transformation technology and opportunities. Digital transformation, digital twin, digital thread. It smells good, but let see if it will bring a new reality in PLM and enterprise software.

Few days ago, I had a great discussion with many people about Master Data Management and its relationship to product development and PLM – PLM and future global master product data. Also check for comments here. The key point of this discussions was about how to manage data “disconnected” from applications, is it possible and what technology and vendors will be selected to manage master data. In my view, all enterprise software vendors are looking how to lead this data transformation activity. Even more, infrastructure vendors will be joining competition as well. The main reason why everybody is so much interested is because digital transformation can change the status quo of data ownership in the company and this is a big deal. The elephant in the room – all enterprise software business models are heavy dependent on data ownership and data locking.

Forbes article – Why most  digital transformation will fail brings a great paradigm explanation – data is liquid.

The prevailing metaphor for data is that it is a liquid – it flows in streams, collects in pools and lakes, goes through pipes, gets frozen, and so forth. From the perspective of system engineering, this viewpoint makes sense, because in general the challenge in building IT systems is accessing, moving, collecting and transforming data. Plumbing is something that IT people have been doing for more than fifty years, and not surprisingly they have become very good at it.

Which is conflicting with  applications paradigm of enterprise information. The most interesting thing is happening with the data in application layer. Between applications data is extracted, loaded, transformed – boring and expensive enterprise data piping. Everyone hates that.

My favorite passage is about this conflict – every vendor is demanding to centralized data in their own repository. PLM is pretty much thinking and doing the same.

Every major vendor in the data space is attempting to sell their solution to these problems. Half of them use machine learning to attempt to identify patterns and matches. The other half use indexing mechanism. What all of them have in common are two factors – they require that the data be centralized in a single repository, and in general they do at best a mediocre job of handling keys, because in most cases they are reliant upon consistency of patterns, something very difficult to get when you’re trying to pull data from multiple sources.

This, I believe, is why most data transformation initiatives will fail.  There are things that you not only can do, but must do, in order to move an organization so that it is. Many of those things will not come out of a box. Some of them will be organizationally painful, because they concern who controls the flow of data in the organization, and this is a form of power that those in position of power will not willingly give up.

On the road to digital transformation, PLM vendors will face an increased competition from everyone across enterprise data ownership chain. The old debates about MBOM ownership between PLM and ERP now will come on a larger scale. What technologies can become a key to make PLM a preferred place for data. I can see growing data management and analytic capabilities of CRM and ERP. Infrastructure vendors can be a new competitor to PLM vendors proposing cloud IT stack to enterprise companies to manage data across multiple databases and platforms. Most of PLM architectures are good ol’ SQL based data management systems.

What is my conclusion? Digital transformation in PLM can easy take us to the same route of data ownership and PLM competition with other enterprise vendors about who owns bill of materials, customer data and many other bits and pieces of enterprise information. Old problems will be coming with a new name. This is a moment to watch a transformation. Because whoever will sell “digital transformation” successful to C-suite can be a next winner in data ownership. Do you think an alternative scenario is possible? Will digital transformation break many years of enterprise software business models? A very good question to ask enterprise software and business architects. Just my thoughts….

Best, Oleg

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


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