Rethinking PLM ROI in the Digital Age: From Single Database to Connected Services

Every business is looking for three things: how to make more money, save costs, and reduce risk. Manufacturing companies are no exception to this rule. They are constantly searching for ways to build products faster, at optimal costs, and to mitigate the many risks that exist in modern manufacturing processes, such as regulations, supply chain issues, quality control, and others. Companies are constantly seeking ways to stay competitive and adapt to the ever-evolving digital age.

Digital Reset of Businesses. Connected Services.

How modern Product Lifecycle Management (PLM) technologies, software and implementation methods can help in this process? In my article today, I want to talk about product lifecycle management return on investment (PLM ROI). While speaking about product lifecycle management, I mean not only PLM software but also other systems and mechanisms to organize an optimal product development process. It includes product data management supply chain management, document management, PLM systems, computer aided design, data sharing and ways to organize digital business processes.

Rethinking PLM ROI in a modern digital process management is a critical aspect of business adaptation process digital ways of doing business. It includes ways any organization governs how organizations manage their product data, documents, and processes.

In the face of rapidly advancing technology and changing customer expectations, the traditional PLM is becoming suboptimal and in doesn’t fit the reality of many organizations. For example, companies are using multiple cloud services (SaaS apps) and not thinking anymore about how to bring all the data in a single PLM database. To maximize the Return on Investment (ROI) of PLM, companies must rethink their strategies and embrace the opportunities presented by the digital age.

Creating of connected service and switching to from document oriented approaches to data approaches are two main characteristics of digital transformation. Let’s compare the world “before and after” digital PLM solutions.

Digital PLM: Before and After

Moving to digital business processes means a lot for companies. Main elements of digital business processes is not to rely on old paper and document oriented business processes. If something works, don’t break it. I’m sure you’ve hear it many times. While it feels like “copy existing process” to computer is a quick and easy answer, in fact, it is not always the right thing to do. Here is the comparison:

Before the Digital Age: Traditional PLM

Here is my list of three most important characteristics of PDM/PLM as we know it for the last 20 years. It includes Single Source of Truth (SSOT), centralize document storage and document approval.

1. Single Source of Truth (SSOT): Traditional PDM/PLM systems focused on establishing a single database as the central repository for product data. Files are attached. It is done to ensure that all stakeholders had access to the same information, reducing errors and miscommunication.
2. One Place to Store Documents: Alongside data management, PLM also provided a single location for storing important documents related to product development, such as CAD files, derivative files with neutral geometry (eg. PDF, STEP, etc) design specifications, compliance documents, and manufacturing instructions.
3. Document Approval: Document approval workflows were a key feature of traditional PLM systems, ensuring that changes and updates to product documents followed a structured process.

These three elements of product lifecycle management as we know that exist surrounded by ideas of taking documents under control in one place. But things are changing in digital systems focusing on data (not documents), online services and the need to accelerate business processes.

Here is what is happening now as we move towards new digital PLM strategies.

1. Multiple Connected Services: In the digital age, PLM is evolving from a single, monolithic system to a network of interconnected services and platforms. These services can include data management, analytics, Artificial Intelligence (AI), cloud-based collaboration tools, and more. This shift enables companies to tap into the full potential of digital transformation.
2. Seamless Information Flow: The focus is shifting from merely storing data and documents to facilitating seamless information flow across the organization. This allows real-time collaboration, data-driven decision-making, and faster responses to market demands.
3. Decision Support: Digital-age PLM systems are shifting focus towards smart usage data for decision support. Data must be available to everyone, when needed and in the right context. To have data available in the real time for decision support capabilities through advanced analytics and AI-driven insights is quickly becoming a key for new ways of designing and building products. Companies can now move beyond simply “doing things right” to understanding the “right things to do,” optimizing processes, and ultimately driving higher profitability.

PLM ROI in the Digital Age: Expanding Horizons

Here is how you can think about expanding a traditional PLM ROI with new capabilities, tools and services.

• Accelerate Processes: The transition from traditional PLM to a digital-age PLM can significantly accelerate product development processes. This speed allows companies to bring new products to market faster, potentially increasing sales and market share.
• Decision Effectiveness: With enhanced decision support tools, organizations can make informed decisions that align with their strategic goals. This shift from efficiency-driven decision-making to effectiveness-driven decisions can lead to more profitable outcomes.
• Digital Processes and Intelligence: The integration of digital processes and intelligence into PLM empowers organizations to discover new revenue streams and monetize their data and insights. This, in turn, can drive substantial ROI by uncovering untapped opportunities for revenue growth.

Challenges of Embracing Digital PLM

Transformation is a complex process. Technologies are easy, but people are hard, While the benefits of transitioning to a digital-age PLM are substantial, companies must also overcome several challenges:

• Strategic Planning: Successful digital transformation requires strategic planning. Companies must have a clear vision of their digital objectives and how PLM fits into their broader digital strategy.
• Mindset Shift: Shifting the focus from data storage to information flow requires a change in mindset across the organization. Employees need to embrace new ways of working and leverage the full potential of digital tools.

How to Make the Transition

Here is my recipe for transition to digital services and realizing the new potential. To navigate these challenges effectively and maximize ROI, companies should consider the following steps:

• Start Agile Transformation: Adopt agile methodologies to facilitate a faster and more flexible transition to digital PLM. Get rid of Excels and old fashion databases, Agile approaches allow organizations to adapt to changing requirements and technologies as they evolve.
• Focus on Data: Data is the lifeblood of digital PLM. Invest in data quality, data analytics, and data integration to ensure that your PLM ecosystem thrives. To bring mechanism to capture data from file based system and make it available in the organization.
• Bring in New Services: Identify and implement new digital services that align with your PLM strategy. This might include AI-powered analytics, IoT (Internet of Things) integration, or cloud-based collaboration tools.
• Connect Them Together: Ensure seamless integration between these services to create a holistic digital PLM ecosystem. This interconnectedness enables the flow of data and information across the organization.

What is my conclusion?

The digital age is reshaping the landscape of PLM, demanding a shift from traditional, monolithic PLM systems to interconnected, data-driven service ecosystems. It is already happening now. the new cloud PLM services are introduced and making it possible to easy interplay with other SaaS services – ERP, CRM, MES and others. The integration is much easier using REST API and modern integration tools. Check my recent article about PLM+ERP approach.

To realize a substantial ROI in this digital age, companies must embrace this transformation, strategically plan their digital initiatives, and foster a culture of innovation and collaboration. By doing so, organizations can not only improve their engineering efficiency but also accelerate processes, enhance decision-making, and unlock new revenue streams in an increasingly competitive market.

Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital-thread platform with cloud-native PDM & PLM capabilities to manage product data lifecycle and connect manufacturers, construction companies, and their supply chain networks. My opinion can be unintentionally biased.