PLM – System of Records, System of Engagement, and System of Intelligence

Manufacturing companies today are under pressure to deliver high-quality products at a lower cost, and quickly adapt to changes in the market. This requires a robust product lifecycle management (PLM) system that can serve as a “system of record” – ensuring accurate and timely information about products is shared across all departments. But PLM systems must also be able to act as a “system of engagement”, providing employees with the tools they need to do their jobs effectively. And finally, PLM systems must be turned into “systems of intelligence”, using data analytics to identify opportunities for improvement and trend forecasting. By using PLM in this way, manufacturers can stay ahead of the competition and ensure they are delivering the best products possible.

PLM Platforms and Single Source of Truth (SSOT)

If you talk to PLM software vendors, it is very easy to get an impression of PLM platforms capable to cover all aspects of the product lifecycle. The aspiration of PLM platforms is to get full control and provide an entire set of functions capable to manage data and processes. For many years, the business and technologies of PLM were focused on how to control the data and build business applications on top of the data ownership platforms. The fundamentals of such approaches are going back to the idea of a “single source of truth” and technically means that PLM platforms provide a so-called System of Records (SOR) capable to hold all product information and all related data connecting data silos and ensure no one is left behind.

In my article about post monolithic PLM world, I shared my thoughts about how modern digital thread platforms will become the next step into a world where information is not stored in a single database, but managed by multiple services.

The idea of a digital thread is to connect different silos of information belonging to lifecycle stages together. While the idea is not really new, it started to accelerate recently when companies started a broad digital transformation strategy. In my article Digital Thread, Bill of Materials and Multi-Tenant Architecture. Current PLM systems are mostly focusing on document management and product lifecycle for a single company. Product lifecycle expands the product development process by breaking a single organization’s silos, breaking limits of the current product lifecycle management, and expanding existing paradigms of process management. Digital Thread covers an entire product value chain and not a single organization. This is a challenge for existing PLM solutions. Limitations of current platforms are especially visible in solutions covering supply chain management where coordination of work between multiple companies is so critical. The role of multi-tenant data architecture in future product lifecycle management is to organize a network layer connecting data structure (BOM) representing multiple elements of multi-disciplinary system development. PLM software capable to organize such a network layer will be capable to provide unique functions and data intelligence capabilities to optimize a product lifecycle and business processes. A new software architecture can help to realize the value of data sharing in manufacturing and to support industrial companies in organizing cross-system and cross-organizational workflows.

Organizations of cross-system and cross-organizational workflows brings the question about a new type of services capable of interoperating with each other and also the type of services that are capable to provide a new type of collaboration and communication between multiple systems. Collaboration is the next logical step in this new connected world, but it requires a new way of thinking about these collaborative services.

Data Sharing, Collaboration, and System of Engagement

A decade old Forbes article The Move from System Of Records to System of Engagement brings you an idea about new type of systems that should provide a new way to interact with users. The comparison between SAP, Workday and some other systems in the article, says the ugly truth – the idea of system of engagement is to bring a new flavor of systems built using new user experience ideas and new concept of collaboration and communications. Here is an interesting passage:

In the old days we had mainframe-based interfaces (SAP was designed to work on mainframes) where IBM dictated the size and color of fonts (hence the words “green screen”). Back then every application looked and worked the same. When PC or Client/Server systems came along it was revolutionary – but during those years Microsoft set the standards. All applications used Microsoft Windows widgets, so they looked and behaved ths same. Different menus of course, but the general pull-down and menu structure was all similar. These designs made computer systems easy to learn, but not much fun to use. And as more and more features were added the cascading menus just became ridiculous.

Modern “design-centric” HR/ERP systems (like Workday, Silkroad Point, Saba PeopleCloud, Taleo, SuccessFactors, Kronos, Rypple, and many others) are being designed differently. They assume that the user will operate in “modes” – and this “Modal Design” lets the vendor create different “modes of usage” like a video game. The Facebook UI is essentially designed for the “mode” of viewing updates and sharing pictures and information.

In debates about SOR (system of records) and SOE (system of engagement) I found the following example very interesting. It is comparing a green screen of IBM mainframe with Workday – a modern ERP application.

Take a look how HR systems have evolved over the years. The first, labelled “Green Screen,” is an old-fashioned 1980s style mainframe HR system (I grew up on these). IBM dictated what they looked like, believe it or not. This is a “system of record.” The second is a modern cloud-based ERP system, Workday. Workday is particularly compelling because it not only graphical, but it uses a “modal” user interface.  More on that below. This is a “system of record” which is designed to be a “system of engagement.”

Jumping back into 2022, I can see the same debates are happening now in MES and PLM space. Tulip brings the debates about MES compared to ERP as a system of engagement. The same debates are in CoLab about PLM and DES (Design Engagement System – I never heard such three letter acronym before). Connected online services is another example of modern data management architectures to provide a bigger value.

However, if we look into the problem without names and buzzwords, we can see the intent of new vendors to build a better ERP system, a better PLM system, and a better MES system. And new user experience (UX) paradigms with modern collaborative capabilities helping people to work more efficiently is really important.

What is next – System of Intelligence

Data is quickly becoming one of the most critical elements in many organizations. The amount of data produced by manufacturing companies is huge and all companies are asking questions about how to turn the data into a source of intelligence. In my article – PLM Data Intelligence In Manufacturing I discussed how in the future we can see online services playing a role of a center of intelligence for modern manufacturing organizations and supply chains.

Another Forbes article – From System of Records to System of Intelligence speaks about how digital transformation can be supported by a new type of technologies focused on the data and producing better insight and decision support. Check our – Moving Value: From System of Records to System of Intelligence.

The premise of a system of intelligence is beyond traditional data warehouses and analytical systems. The business case for these (SOI) systems is to take the idea of data intelligence and make it part of the system of records (SOR) eliminating the separation between systems. Old school data warehousing required the separation between systems of records and DW. A new system of intelligence does everything in real time because they are part of data management (system of records). The new system of intelligence will bring real-time analytics to old fashion enterprise systems by providing advanced data management methods, collecting and analyzing data, and replacing old school systems of records.

There is a strong business case to establish a PLM system of intelligence based on the new architecture of the system of records. Over time, a system of intelligence will provide a sustainable strategic digital differentiation with the ability to improve decision support.

What is my conclusion?

Both examples of system or engagement and system of records demonstrate the way novelty is coming to extend and replace old fashion legacy systems. Existing PLM systems and incumbent vendors are great examples of systems of records built on top of old data management architectures with limited collaboration capabilities and the absence of data intelligence mechanisms capable to open the value of the data in a single company and across multiple companies in a value chain. New platforms coming in the way of web services open a modern way to provide solutions for manufacturing companies. However, as always in such situations, the fight will be always between legacy systems and modern approaches. The power of modern web services is the ease of integration and expansion, which gives to these companies a better way to compete with old vendors and platforms. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital cloud-native PLM platform that manages product data and connects manufacturers, construction companies, and their supply chain networks. My opinion can be unintentionally biased.