Data-Driven Business: A Playbook for PLM Vendors to Capitalize on Their Data – Part 1

In an ever-evolving digital landscape, data has become a powerful currency for driving businesses forward. Data is transforming today’s manufacturing world, and PLM vendors are in a unique position to capitalize on the insights it provides. With PLM systems that hold detailed product information such as bills of material (BOMs), drawings, CAD files, change requests and more, they have access to rich datasets that can help manufacturers make decisions faster and create better products. Data can help to optimize manufacturing processes, help to find raw materials and components. Gathering data is an important element in product lifecycle management. Data insights are important to optimize manufacturing output and manufacturing processes. New technologies in data governance, data management, and digital thread can help to organize the manufacturing process. But having this data isn’t enough – to get the most out of their data investments, PLM vendors need to think differently about how they leverage their databases for maximum impact. In this blog post we will explore what it takes for PLM vendors to be truly “data-driven” and provide strategic advice on best practices when capitalizing on big data opportunities within the manufacturing industry.

Data Is Fascinating and It Is A Business Opportunity For PLM

I’ve been a fan of the data and the ways data can be used in modern manufacturing and business systems. For the last 10-15 years, we collected evidence that data is an extremely important asset to optimize any processes. For modern global brands (think FAANG and others), data is a business.

Here are some examples of why I think data is especially fascinating these days

1. The digital age has led to an explosion of data creation, with every click, like, purchase, and search generating data that can be collected and analyzed. This abundance of data presents exciting opportunities for individuals, businesses, and organizations to gain valuable insights and make data-driven decisions.
2. The rise of machine learning and artificial intelligence has increased the importance of data in many areas of life, from healthcare and finance to transportation and entertainment. These technologies rely on vast amounts of data to train algorithms and improve their accuracy, making data a critical component of many industries.
3. Data visualization tools have made it easier than ever to make sense of complex data sets. Interactive dashboards, heat maps, and other visualizations allow users to explore data in new ways, uncover patterns and trends, and communicate findings to others.
4. Data privacy and security have become major concerns in recent years, adding an extra layer of complexity and intrigue to the world of data. As data breaches and cyber-attacks become more common, the importance of protecting sensitive data has never been higher.

All these things together, made me think that data is a big opportunity for PLM business and it will become the driving factor in the next industrial revolution – the digital revolution. Companies are moving from mass production to configurable and highly customizable products. Manufacturing processes for these types of products are different. Modern PLM architectures create a foundation for future data-driven network-based platforms. A successful modern PLM implementation relies on the network of information and the availability of this information inside and outside of the organization.

Read my earlier article about the Future of Data In PLM to learn more about the opportunities I can see with the data in PLM. It is an opportunity to extract more value from PLM, but vendors and the industry need to make changes in order to capitalize on the data.

What Is a Deal With Standards and Data Locking?

For many years in the PLM industry, data was directly connected to the following topics – data standards and data locking. In my earlier article – Who needs PLM standards? you can learn about a variety of perspectives on data standards. The PLM industry created a few valuable standards that today can be used for data transfer and data sharing. However, the majority of these standards and use cases are tightly connected to CAD and design data exchange. PLM databases are using proprietary data models and are hardly discoverable ‘as is’ in the existing PLM and other implementations. Many downstream implementations are using legacy homegrown solutions and heavily customized data management environments.

I hope nobody believes that you can magically extract data from one PLM system, to load it to another system and continue to work. That would not happen in my view. If you experienced something like that in your life, let me know. The systems, environments, configuration, and customization of systems makes it impossible.

Data locking in PLM is a matter of vendors’ business paradigm. It is not specific to PLM, but a broad paradigm used by enterprise software. Locking the data and upselling applications was the strategy used by vendors for many years. However, to turn data into business, PLM vendors will have to leave the paradigm and figure out how to separate data from applications.

People, Process, Technologies. Where is the Data?

My attention was caught by the discussion of changing the paradigm from PPT (People, Process, Technology) to PPDT (People, Process, Data, Technology). Thanks to Jos Voskuil’s blog who mentioned it. The following picture speaks for itself.

You can get a better insight into the proposal from Juha Korpela. Here is my favorite passage:

The Big Problem in data these days is that far too often we fail to deliver business value. Why? Because the “data stuff” is too far removed from the actual business – the people, processes, and technology that are used to really achieve the organization’s goals (usually, making money in some way!).

And why is this, then? Because in the majority of organizations and the majority of business development initiatives, the “data stuff” is an afterthought to people, processes, and technology. A new line of business is going to be set up? Hiring plans, process diagrams, ERP systems will be there. New factory being built? Operators & maintenance engineers, production lines & control centers, logistics will be there. In far too many cases, only when all of that exists will someone start thinking “well, I wonder what kind of analytics stuff we could do here”.

I think the following passage is nailing it down.

…the only thing needed is to consider DATA as a first-class citizen, something that is baked into the very core of your operating model. A thing of its own, not separate but interconnected and integrated with People, Processes, and Technology. Not an afterthought!

Can data break up with PLM systems and become free?

The big deal in making data a first-class citizen is related to changing the paradigm and making data independently available without connection to a specific system. It makes a lot of sense because the lifecycle of data is much longer than the lifecycle of applications. By making data an independent lifecycle entity, we can also solve many problems related to how to handle data across multiple applications and how to use web services that can leverage data for their advantages.

However, the breakup of PLM systems from data can be painful. Also, the vendors will have to figure out how to make a business from data (not applications that lock the data) and also how technologically make data available.

Digital Transformation Opportunity

Digital transformation can potentially free data from legacy systems by enabling data to be more easily accessed, integrated, and analyzed across a wide range of applications and platforms. However, it is important to note that this process is not automatic and requires careful planning and execution to achieve.

One of the key goals of digital transformation is to break down data silos by enabling data to be integrated and shared across different systems and platforms. This can be achieved through the use of APIs (Application Programming Interfaces) and other integration technologies that enable data to be exchanged in real time between different systems.

In addition, digital transformation can also help to automate data processing and analysis, reducing the need for manual intervention and increasing the speed and accuracy of data-driven decision-making.

However, it is important to note that digital transformation alone cannot “un-slave” data from systems. Data ownership and governance are still essential considerations in any digital transformation initiative, and it is important to ensure that data is still properly managed, secured, and governed in accordance with regulatory requirements and best practices.

In the context of existing PLM architecture, the un-slaving data can be an opportunity for vendors delivering systems of engagement and systems of intelligence to create a web service layer on top of existing SOR (Systems of Records). It is also a great opportunity for service vendors to deliver digital transformation solutions.

What is my conclusion?

To make data a “first-class” citizen in the enterprise environment is a big deal. It will be the first step towards sustainable data management architectures and new PLM paradigm shifting. It is an opportunity for new and existing vendors to create a digitally connected enterprise. While digital transformation can potentially free data from legacy systems, it is important to approach this process carefully and ensure that data ownership, governance, and security are still properly addressed. Making data broadly available can support a new generation of PLM services. More about it in my next blog. Just my thoughts…

Best, Oleg

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