What is PLM? This question is accompany the product lifecycle management business for the last 20+ years. Started as a solution to manage CAD files, PLM has strong engineering roots and for many years was considered a pure engineering system. Check CIMdata reports from my last trip to CIMdata Industry and Market event and you will find that the top 3 use cases for PLM are still in the engineering domain with a very traditional scope of PLM implementations – engineering data management, release, and change management, and configuration management. For years, the engineering-centered approach when selling PLM was the go-to strategy.
The question about PLM and engineering focus is one of the very often debated topics. PLM sibling – ERP is the usual business darling for years perceived as a business system (vs PLM as an engineering one). However, the market is evolving and manufacturing businesses are looking at digital transformation as a way to change their business. The best business definition of PLM provided by CIMdata says:
PLM is a strategic business approach that applies a consistent set of business solutions that support the collaborative creation, management, dissemination, and use of product definition information. Supporting the extended enterprise (customers, design and supply partners, etc.)
It sounds very profound and reassuring PLM can help businesses. But when it comes to many PLM sales, companies still buy engineering data management heavy involving CAD data management, change control, and maybe some design supplier collaboration.
As the market evolves and manufacturing companies are going through the digital transformation time, it’s worth asking: Is this focus on engineering actually undermining your PLM sales? Let’s talk about it today.
A simple formula for how to sell anything to any business
If you talk to sales professionals, they will tell you that business is always focusing on three fundamental things:
- How to make money?
- How to save money?
- How to reduce the risks?
On the grand schema of things, everything you sell to any business (PLM is not an exclusion from this rule) must be classified by one of these criteria – you either help the business to make money, or you save money by optimizing cost and expenses or focusing on how to reduce potential risks of something goes wrong.
Traditional Engineering-Focused PLM on Efficiency and Productivity
Traditionally, selling PLM solutions has involved a heavy focus on their engineering aspects. Managing CAD data was the starting point for many PLM implementations. PLM products were supporting engineering processes and attached to CAD systems that obviously were focusing on product design. To manage engineering and product development processes was in the middle of PLM sales stories. How to save time collaborating between engineering teams, save time making engineering collaboration… etc. It was all about efficiency and frankly saying was using engineering management as the main champion of PLM systems sales.
Check most PLM sales topics and you will find benefits related to design data management improvements, streamlining change control, accelerating ECO process automation, integration with CAD systems, and more. While these features are crucial for a PLM system, the emphasis is primarily on the technical nuts and bolts.
While there is nothing wrong with engineering optimization, I found that most companies’ PLM programs are extremely narrowly focused on efficiency and the traditional approach of selling PDM and PLM to centralize the data and optimize engineering work.
The Changing Landscape
Today, businesses are becoming more concerned about how PLM systems can help to fulfill the strategic role in an overall product development and manufacturing operation. The change is coming from the businesses themselves. Manufacturing companies are looking at product lifecycle management not only as a mechanism to support product data management and organize product development process but also as a technology and tool to cover the entire product lifecycle from early computer-aided design (CAD), customer feedback, raw materials supply chain and overall process management.
As companies are becoming digital, the question of data quality and the connection of PLM to business processes is becoming more important. Last, but not least is the XaaS trend that changes manufacturing business from selling products to selling digital services. Companies are not selling industrial equipment, engineers, construction machines, and many other products, but renting them as a service to other companies. It immediately triggers many questions about how to control data, monitor machines, manage maintenance, re-fabricate them, and make them available to other customers.
Hence, the question arises: Is our engineering-focused approach to selling PLM outdated? Does it resonate with today’s business leaders who have a broader view of PLM and change the way PLM can be sold to businesses?
Business-Focused PLM: A New Perspective
You always go with the money. It was a recommendation I got from my long-time business advisor who told me that it is much more beneficial to stay in the money line in any business. This means by connecting to a profit center of the business, instead of a cost center.
The shift from an engineering to a business focus when selling PLM doesn’t diminish the value of the engineering aspects. Instead, it elevates the conversation to a strategic level, aligning the PLM pitch with broader business objectives. How to do so?
In my three examples below I will discuss how focusing on (1) getting more money; (2) saving money; and (3) reducing risks can help PLM sales to change the way PLM projects can be sold to companies focusing on digital transformation.
How to Shift the Focus and Become Digital Business
Check all successful businesses that were built in the last 15-20 years. There is one common element between all these businesses. They built their business around the data as a main element of their strategy. Unfortunately for many manufacturing companies, data is an afterthought. First, they focus on how to build physical products, then thinking how data can help them to organize their business.
And this is where the switch should be coming. A business-focused PLM approach can come if companies put a digital infrastructure to manage information to help them (1) make more money; (2) save money and (3) mitigate risks. It can mean many things – better decisions when selecting materials and suppliers, better forecast of maintenance, and analytics to demonstrate to businesses how PLM can help (not only providing technical features).
If you’re ready to shift your PLM sales strategy from an engineering to a business focus, here are a few strategies:
Make more money
To make more money starts from making products that customers are looking for and do it fast. It also means being able to track customer feedback and get analytics from existing product usage. It can be also an organization of digital processes capable to sell services to existing customers and optimize product delivery functionality and experience. It also means being able to present products, provide a digital experience, and tailor it to customer needs.
Save money
Building products involves a lot of decisions. How to make the right decisions based on accurate data? This is a question PLM software can help their customers (manufacturing companies) to make. Buying the right components, optimizing product cost, making orders on time, and saving on product maintenance. This is a quick list of options you can think about when trying to save $$$ during product development, manufacturing, supply chain, and maintenance.
Mitigate risks
These are killers. Modern manufacturing is experiencing an enormous amount of risks. Starting from supply chain turbulence and coming to the complexity of regulation, competition cost pressure, and many others. How to keep management “out of jail” when something critical happens with the product your business is building is a lot of responsibility. Selling this capability of PLM can be priceless if you know how to do so.
What is my conclusion?
It’s not that the engineering aspects of PLM are no longer important. They’re essential. However, to be competitive in modern PLM sales, you need to be different. Keep in mind, all “old PLM salespeople” are saying the same stories – single source of truth, organize data, save engineering time… While it is very important, it won’t make you different and stand out in the PLM crowd. Managing data (eg. BOM) is not a goal, it is a function to solve the problem – optimize cost, buy the right parts, and find an optimal supplier and contract manufacturer. Thinking about the business aspects will help you to show the value of PLM differently and find new PLM features that can sell it differently too.
If we want to improve our PLM sales, we need to adjust our focus. We need to stop thinking only about engineering and start thinking about business. In doing so, we might find that the market for PLM is broader and more receptive than we ever imagined. Just my thoughts…
Best, Oleg
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital thread platform including PDM/PLM and ERP capabilities that manages product data and connects manufacturers, construction companies, and their supply chain networks. My opinion can be unintentionally biased.
