Will SAP and Siemens come on the same BOM?

A little bit more than one month ago, two giant companies, Siemens and SAP announced their partnership to deliver integrated end-to-end software solutions across the product lifecycle, supply chain, and asset management. If you missed my first article about what means the combination of Siemens and SAP software for PLM industry and manufacturing, please check it out here – PLM( Siemens+SAP) = winners, losers, and questions.

The debates online and in many user groups are around what is going to happen with SAP PLM portfolio and how a combination of Siemens Teamcenter and SAP PLM will work out. You can see many articles, opinions, and comments. The opinions are predictable and driven by the source and the business. If your business is selling SAP PLM solutions, don’t expect this business to be very much excited about the idea of replacing it with Teamcenter. The last might not happen, because customers that invested millions of dollars in implementing, developing, and supporting solutions like SAP Engineering Control Center (ECTR) won’t jump tomorrow to use Teamcenter.

Few articles to mention in this regard – Siemens and SAP Join Forces to Accelerate Industrial Transformation and SAP & Siemens: PLM Market Disruption or Another Good SAP Option. My favorite passages:

The SAP PLM solution portfolio is significantly expanded through our partnership with Siemens and opens up completely new possibilities for our customers. With this, we support our customers in the acceleration of their digitization throughout their companies and transform the idea of Industry 4.0 into reality with a combined solution portfolio consisting of Siemens and SAP components. It is also important to note that the scope of this partnership is currently focused on the discrete industries.

Today the PLM-ERP market has settled down and companies have committed to and invested heavily in their chosen solutions. Customers not using SAP PLM began asking how can I make my Strategic Systems work together more efficiently?  Customers and Engineering PLM providers began creating interfaces to push data over from PLM to ERP.  These were every expensive and did not live up to the promises made. Some customers jumped into the deep end and tried to develop their own bi-directional interfaces which were extremely expensive to develop and maintain. Worse yet when either the PLM or ERP solutions were upgraded, the finger pointing started and the customer was often left holding the bag. Customers and providers learned it is not easy to integrate a PLM solution to an ERP solution. The data objects in PLM will break the “out of the box” functionality in SAP. Customers may also have learned the end result are not just cool visuals but a product and all the processes needed to make, move, sell and support it

As it sounds from these articles and many other sources I had a chance to read and listen to, the overlap between SAP PLM and Teamcenter offering for discrete manufacturing is minimal. I don’t speak about marketing and sales messages, but more focus on customers using existing solutions today. So, this partnership can provide a great message to sales teams and strategic accounts that Siemens-SAP solution will become strong and the alignment will help to develop a better integration between Teamcenter and SAP ERP.

My main point is that in fact, the story between Siemens and SAP can be really exciting if two companies, products, and teams will figure out how to create a reliable and working solution to integrate Teamcenter PLM and SAP ERP, which is about manufacturing Bill of Materials (BOM). The story of PLM-ERP integration always brings tons of debates. Check some of my earlier articles –  Manufacturing BOM dilemma and Manufacturing BOM is the next cool thing in PLM, Manufacturing future will depend on solving old PLM/ERP integration problem.

Manufacturing BOM is in the focus of many manufacturing companies. Efficiency and the ability to manufacture companies to execute flawlessly become more and more important. The manufacturing environment is highly distributed these days with lots of constraints and dependencies. To design and bring a product to market in a short time is a complex task you cannot solve without tools that will help you to connect a bill of materials together. Siemens PLM announcement about TeamcenterX is an indication that Siemens is interested in how to enhance core PLM operations (which BOM) by cloud services. It brings many interesting questions and ideas about how SaaS infrastructure can be used to streamline BOM management processes. There are different aspects of the BOM process that can leverage powerful and scalable SaaS infrastructure – seamless data integration and scale. Bringing multiple manufacturing companies on a multi-tenant SaaS platform can open the door to even more data processing and intelligence.

What is my conclusion?

PLM landscape will not be changed overnight by the partnership between Siemens and SAP. The agreement seems to be more a way to fill the gaps in existing portfolios rather than replace one solution with another. At the same time, there is an opportunity to develop new products and processes to streamline PLM and SAP using existing and new technologies to solve decades-long disputes about BOM ownerships and manufacturing planning. 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.