What means low-cost PLM?

Earlier this week my attention was caught by Siemens PLM tweet message claiming the definition of low-cost PLM. Check this link.

Low-cost #PLM doesn’t mean free software downloads … it means PLM software that can be deployed out-of-the-box, with minimal configuration instead of costly customization.

The article connected to this tweet is self-explanatory – A Formula for Low-Cost PLM at DNV GL. Siemens PLM brings a testimonial from Teamcenter customers. The following passage gives you an idea about what is the point of low cost PLM according to Siemens PLM. Check the infographic in the article – I found it interesting.

Low cost PLM doesn’t mean free software downloads … it means PLM software that can be deployed out-of-the-box, with minimal configuration instead of costly customization, that can be managed and maintained cost-effectively over time. For example, the Teamcenter Schedule Manager provides out-of-the-box capabilities to help DNV GL users plan, execute and track projects, while providing financial and technical status for management.

However, the passage made me think about the statement regarding what low -cost PLM is not. It is not “free”… We all know that “free is not actually means free”. The many examples of free things that are actually free. Just a few examples – free mobile phone requires a one-year contract; Filling a form to get a free white paper means somebody has your email address and other personal details, etc. etc.

So, free is just a business model for a company giving software for free and charging for services and maintenance or, alternatively, open source software company later one selling implementation services. Few articles that give you more ideas about some free PLM players such as Aras – A full PLM suite free of charge – what’s the catch with Aras?

Another interesting article from Upchain PLM – Why Open Source PLM Doesn’t Mean Free. Here is an interesting passage:

As anyone who has ever purchased enterprise software knows, the sticker price and the total cost of ownership are very different numbers. A report from Panorama Consulting found that you can expect to spend 5 times the licensing fee to get an ERP up and running. And while this is a little high, it’s not a far stretch from the 1.5-3 times figure that gets thrown around for most enterprise solutions.

Here is the thing – if making an enterprise system such as PLM is anyway cost much more than licenses, the focus should be not on what software has a free or paid license, but which system will have a lower cost of deployment, implementation, and maintenance. So, the real answer to the question about low-cost PLM is a question of what deployment model is actually better.

In my view, the battle in PLM world is now between two polar opinions 1/ out of the box PLM; vs 2/ flexible and fully customizable PLM. The first model says that you can get up and running with out of the box PLM if the model PLM system is providing matching your needs. The second model says that you might spend more time implementing PLM upfront, but because of flexibility and absence of rigidity, you can get lower cost of maintenance, changes and at the end of the day, total cost of ownership.

What is the right answer? In my view, none of these models are perfect. Instead, you should think about sustainability and openness of PLM solution and platform you’re buying in. If out of the box PLM gives you a quick upstart, check how much will cost to improve or change what you do in the future. At the same time, if you are getting free open source PLM, check how much effort will cost you to support self-maintenance and implementation effort to make it work for your company. In both cases, think about infrastructure and IT maintenance cost, which lead to advantages of SaaS or hosted models.

What is my conclusion? Like most of the things in this world, the debates about low-cost PLM and out-of-the-box vs flexible PLM models aren’t black and white. Most of out of the box vendors will force you to upgrade to more expensive licenses once you want to step outside of the box. At the same time, providers of free, open source and flexible PLM systems will be limited to serve a large community of companies without broad community support. The important factor is to check how your company business can match a traditional PLM implementation model. How the business process and requirements can fit the functional scope of PLM systems and paradigms. In other words, it is not about three letters P/L/M, but about what the system does and how it improves your business. We are moving into the era when function and service are more important for business today and companies are changing too fast to spend months and sometimes years to adopt and implement software. So,  a combination of low cost and value is more important. These days getting up to speed fast and solving manufacturing business problems in a simple way is a priority. 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.

Siemens NX and Solid Edge images are credit Siemens PLM web site and blogs.