For the last few months, I’ve been having many discussions and debates about the current state of PLM, manufacturing trends, problems, IT solutions and possible ways to sell them to customers. Digital transformation seems to be a common topic for most of PLM companies today. As much as I like digital trends, unfortunately for most of the parts, it used as a new marketing gimmick to sell old PLM solutions available for decades.
Practical digital transformation is hard. It requires organizational changes. Many projects are failing. The situation overall reminding me of PLM sales in the 2000s when the focus was on how PLM can bring a business transformation to manufacturing OEMs. Nothing changes much – companies are still slow to change and “business transformation” is currently converting into “digital transformation”.
The question, I’m asking myself is how to sell PLM in the current status of engineering and manufacturing software market? To have solution-oriented marketing seems to be winning in the long run because it helps to establish a meaningful conversation with a potential customer. However, Out of the Box PLM concept has bad reputation. So, the solution is not necessarily something that you can package and sell. Which creates a conflict between solution marketing and product delivery. The market for large enterprise PLMs is extremely narrow. My hunch, we are talking about top 1000 companies in the world that are ready to adopt enterprise PLM as it is today. A bloody competition is inevitable in this domain.
Outside of large enterprises, PLM is still largely unknown software, which is usually facing a lot of criticism and questions. The situation is, of course, different from a decade ago. Cloud PLM movement made by Autodesk back in 2011 had its impact on the market and spurred the interest of manufacturing companies to a new type of solutions. Few M&A movements created some waves, but market is pretty much an Excel status quo.
So, how to sell PLM in such a market? One size doesn’t fit all. If you’re challenging the status of large enterprise PLM implementation, the target audience is probably executive sponsors and large enterprise ITs. Check some of my earlier articles
Outside of the enterprise domain, PLM sales peoples are in the uncharted territory. I can see two possible options – (1) sell to major programs in manufacturing companies; (2) sell to engineering organizations. This is a dilemma, most of PLM companies are facing today.
To sell PLM to major programs is a proven method used by PLM vendors for many years. In such a way you created an initiative that is positioned to solve of the strategic problems of manufacturing companies, aligning PLM product with the goals of this initiative and choose C-level sponsor to sell it to an organization. As the number of the organization moving into digital future increase, such go to market can be a viable option.
To sell PLM to engineering organization at first sounds like a step in the past when PLM was mostly focused on managing of CAD data (in other words, PDM). However, it is a very shortsighted view. Smaller companies are a step ahead from larger organizations in the adoption of digital technologies. Most of these companies are “digital native” and they have an urgent needs in solutions capable to connect engineering and downstream processes. But, to do so, PLM vendors have to sell to engineers and get engineering buy-in to solutions.
What is my conclusion? In my view, the value of PLM technologies is in the ability to connect downstream processes with engineering. This is a charter for many companies looking into pragmatic digital transformation. How to connect purchasing, manufacturing planners, contractors, suppliers into a single digital network? It is a very challenging task because nothing is more complex than the competition with a status quo. The good news is that companies are moving towards digital transformation regardless of what PLM companies are doing. Timing is everything and the second wave of cloud and digital native PLMs can become a winner. Just my thoughts…
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.