Clarity on PLM

What I learned this week … was sparked by a conversation with a friend from the industry over a drink last night. We were discussing the cloud, PLM, multitouch, and IT in general. To be fair, there were other topics of conversation, but he is one of the people that I really respect for his insight into technology. We were discussing my thoughts on PLM in the Cloud, when it finally struck me. Are we going to ruin the design process for experienced engineers by hampering their real-time interaction with the system? Are we heading in the right direction for tomorrow’s engineers?

What Am I Talking About?

Work with me for a minute, this conversation was after only one beer so I think it makes a lot of sense. We were talking about what kids today will expect in the user interface of the future. We were talking about how our kids talk on their headsets and use their game controllers so naturally, doing things we don’t even understand. They are pushing combinations and series of buttons in rapid succession to make things happen in their game – in their virtual world. Then it struck me – why am I so excited about multi-touch and user interfaces that help replicate the real world? Isn’t the whole point of using a computer to go beyond what you can do manually? To super-enable your abilities?

OK, back to CAD and PLM.  Multitouch, 3D manipulation, and motion interfaces are cool. We all saw Iron Man, and we have seen demonstrations of multi-touch CAD. Now I am asking “so what?” OK, I love multitouch (and I want an iPad). But I have a tablet PC with a touch-sensitive screen, and how often do I pull my hands off of the keyboard to touch the screen (hint, no fingerprints on it)? I don’t even like to take my fingers off of the keyboard to grab the mouse, so I have learned a lot of shortcut keys and typeahead tricks. Why? I don’t want to replicate getting a blank piece of paper out of my desk, writing a report on it, making copies, manually distribute it to colleagues for review, and then file it in a file cabinet. The real world is much less efficient than my virtual computer world, so why replicate it in my user interface? OK, we all know the answer. It reduces the learning curve, and it makes interaction more intuitive. But for the experienced user I am going to call that assumption into question (translate as you will).

For the experience user – particularly for the people that grew up using Xbox controllers to manipulate their virtual world in ways they can’t dream of interacting in the real world – we need to do better. Don’t make them touch the screen, take advantage of the fact that they have ten fingers that can all act independently. Give them a motion-sensitive Wii/Xbox-type of controller that they can do ten things at a time with. Track their eye motion. Read their brain waves. The point is to most effectively translate and extend the ideas in the designer’s mind to the system. For the first-time user, multi-touch makes sense. For marketing presentations, the same. For a  day-to-day, interactive interface between an engineer’s fast-moving brain and their high-powered computing equipment it has to be fast and efficient for the experienced user – and that doesn’t necessarily mean natural or intuitive. Particularly when the definition of “intuitive” changes as more of the Xbox generation is sitting in front of the CAD system.

What Does This Have to do with The Cloud?

OK, if you are still with me I appreciate it. I know this has gotten long, and I haven’t even touched on the cloud yet. I will make this brief. I pointed out two types of concerns in my post on PLM and the cloud. One set of concerns was corporate, the other was performance for the user. Let’s relate the concepts above to the real-time performance of an engineer. A lot of the buzz around CAD in the cloud has discussed the challenge of rendering graphics rapidly and getting them back to the engineer. That is a big concern, and I have seen in posts like Josh Ming’s post on SolidSmack about SolidWorks on the cloud that progress is being made.

But what about input performance?  If the goal is to make the human-machine interface as efficient as possible and not distract the engineer from innovating, there can’t be a lag between action and reaction. Part of that lag time is computing/rendering responses. The other is capturing what they are doing. This is where I get concerned about lag times in the cloud. Maybe I need to look back at my son’s Xbox experience and just get over it? But I still have a lingering concern about maintaining real-time user-machine interfaces through the Cloud. I know a lot can be done client-side on the PC or workstation, but I still have to wonder if we are heading the right direction for the real design jocks. Maybe it is too much to ask engineers to learn that level of interaction with their systems, but won’t the Xbox-controller-wielding generation expect that, and won’t it be intuitive to them? If X-A-B-Y-LR-LR-X means pass the football in their game, why couldn’t they learn that means create a thumbnail of my 3D model and check it into the PLM system? Then, I am confident that powerful computing infrastructure (in the cloud or elsewhere) can execute on that.

Implications for Manufacturers

I realize that I may not have given you much that is actionable today, so I will leave you with a thought or two to ponder. All of the new UI ideas are cool, and there are huge benefits for companies to move applications to the cloud. But try before you buy. In your environment. With your infrastructure. And your people. And keep the capabilities of bright, highly talented, gaming savvy, trained, dedicated engineers in mind as you evaluate future user interfaces. Multitouch will have great uses in engineering software, and cloud computing has great promise. But let’s be careful what we ask for so we don’t hamper our future innovators. And for goodness sake, let’s make sure we don’t make them put their hands on the screen unless it is really helping them do something more natural (like sketching) that they can’t do better with an Xbox controller.

So those are my (somewhat random) thoughts, I hope you found them interesting. Do you agree? I didn’t, if you did let us know about it.

What I learned this week … is a reaction to some of the buzz coming out of SolidWorks World this year. I am not attending the event, but there has been a lot of good reporting from SolidSmack, Ray Kurland, Derrek Cooper,  and others. The word of Day 1, it seems, was “Cloud.” So much in fact that @rtara (Roopinder Tara) suggested on Twitter a new drinking where there are shots taken every time somebody said the word. So now “PLM” and “Cloud” are official buzz. I have not spent much time on this, so I thought I would use this post as a starting point. Is this a brave new world, or just another buzzword to throw around?

The Buzz

Don’t get me wrong, buzz is not bad. As long as their is beef behind the buzz. OK, not that I have hopelessly mixed my metaphors, let’s do some definition.

• Cloud (from Wikipedia, where else?) – Cloud Computing is Internet- (“cloud-”) based development and use of computer technology.  In concept, it is a paradigm shift whereby details are abstracted from the users who no longer have need of, expertise in, or control over the technology infrastructure “in the cloud” that supports them. Cloud computing describes a new supplement, consumption and delivery model for IT services based on the Internet, and it typically involves the provision of dynamically scalable and often virtualized resources as a service over the Internet.
• Cloud (greatly simplified by me) – Is your data and your applications out on the Internet.

It’s not as mysterious as it sounds, data and applications aren’t randomly dispersed, they are just outside of your organization with service provider(s). Any online application can be considered “Cloud Computing.” Amazon is in the cloud. What’s new is that we are talking enterprise applications in the cloud. And even that isn’t so new, salesforce.com is CRM in the cloud, in a “software as a service” or “SaaS” mode. Seems like we could demystify this a bit, no?

So why is there so much buzz? Wouldn’t it be nice to move all of your IT problems outside to someone else? Why wouldn’t you want someone else to worry about capacity, bandwidth, security, OS upgrades, hardware upgrades, etc.? Oleg has also written a lot about the cloud in PLM Twine.

Buzz Kill

So why wouldn’t the cloud make sense? It lowers costs, simplifies infrastructure, and generally relieves a lot of IT burden from the enterprise. I will offer two perspectives:

• Users Want Performance – For the most part, users don’t care where there data is. But they want to be able to get to there information when they need it, and they want it to be available rapidly. If data (and applications) move to the Internet they will need to maintain an acceptable level of performance. For example, I have two e-mail accounts. One I control on my client, the other is “in the cloud.” When my PC decides to download a new virus definition my Internet-based e-mail slows down. Not just downloading/uploading from my client (which is a bit of a pain), but actually typing an e-mail. The same is true as I am writing this blog post. If my bandwidth goes down or my laptop starts hogging resources for something else, I lose my focus on what I am writing and have to focus on getting the words on the page. If I get distracted by performance issues when trying to write a post or an e-mail, how distracting would it be to an engineer trying to solve a design problem?
• Corporations Need Control – Of course we would like to move our IT problems to someone else. But who can we trust? Who will we work with if the performance our users demand isn’t there? Is it the application service provider’s issue, our Internet Service Provider’s (ISP) problem, our network? How do we guarantee our precious product data is safe? Can we trust our service provider’s employees? Is there more inherent risk when my data and my competitors’ data is on the same infrastructure? Facebook made a mistake and gave access to profile data to the wrong people. Oops. What if that was your CAD data? These are just a few of the questions.

None of the issues are insurmountable. We are moving this direction. It has been an evolution, but more and more of what we do is happening off or our personal machines and outside of our firewall. I do think that trend will continue for cost and simplicity purposes. But the infrastructure and business models for the cloud are just developing for areas like PLM. Stay tuned.

Implications for Manufacturers

The implications from my perspective are clear:

• The Cloud is Compelling
• The Cloud Must Perform
• The Cloud Must be Able to Answer some Serious Corporate IT Questions

Look for evolution when it comes to moving PLM to the cloud, not revolution.

So those are some early thoughts on PLM and the Cloud, I hope you found it interesting. This will be an interesting evolution to see unfold. There will be bumps in the road (maybe some big ones), but the benefits are compelling. What do you think? Are you ready to give it a try? Have you?

A quick peek into some feedback on my research on … the Evolving Roles of ERP and PLM in the manufacturing industry. First, thanks to Oleg for his feedback an continuing the ERP-PLM conversation on PLM Think Tank. Oleg made some very good points and provided some good research on the research. But in the spirit of a healthy debate I want to “myth bust” his response. I will address each of the sections in his response idividually, although I split the first one into three responses.

Responses and Reactions

Managing Innovation (Busted) - The title to Oleg’s report does not reflect the thrust of my paper, but he touches on a topic that is near and dear to my heart. He makes a strong point that innovation can’t be managed. I think the first two responses to his post say a lot, particularly the first one, show that this isn’t the case. No, we are not going to automate innovation with a product line of robots. But the energy and time of smart, innovative people can be harnessed and guided to produce more results by following an innovation process. I call this operationalizing innovation. It is about process. Really.

Distinct Roles of ERP and PLM (Busted) - The point that I was making in my paper is that ERP and PLM serve different purposes. PLM helps drive product innovation, ERP helps execute the business of manufacturing. PLM’s primary role is not managing innovation, it is helping companies innovate, develop new products, and engineer them more effectively. These are fundamentally different purposes. Yes, there is overlap. But there are more differences than overlaps. See the table below for more of my thoughts on this.

PLM as a Module of ERP (Busted) - Oleg disagreed with my statement that “PLM is not just another module of ERP” and points out SAP as an example. I disagree strongly with this. SAP tried to introduce PLM as just another module. If they were successful there would be no market for PTC Windchill, Siemens Teamcenter, or Dassault Systemes Enovia. What has SAP done over the last couple of years? SAP  developed a multi-year program to introduce PLM as a complete subystem to ERP instead of a module. See my post Does SAP “Do” PLM? for more on that. Can an ERP vendor provide PLM? Sure. Is it part of the ERP system itself? Not in the near future. Need more proof? Oracle bought Agile instead of developing further on their e-business suite. Busted.

Design and Product Data Management (Confirmed) - The core of PLM is data management. PDM should be rock solid, with very robust security. I do believe that extending to other areas (compliance, costing, etc.) that leverage that core data makes absolute sense. It is like building a house on an unstable foundation, it may look nice but in the end it will collapse.

Cross Funtional Processes (Plausible) – I absolutely agree that processes are organizational.  I believe that business processes absolutely come before software and functionality. I also agree that business processes cross enterprise boundaries (click to see the article with that same name). But my point was – and still is – that companies need to choose which processes will be supported by which solution. Yes, the answer can be that some processes are supported by a combination of the two. And I would love to see business process management (BPM) play a role, even to the point of developing composite applications that leverage the functions of each system. But the point is that there are some overlap areas where companies need to choose. There is more to agree with here than disagree, though.

PLM and ERP Integration (Plausible) – I didn’t go into technical integration in my report. Why? Because I believe that it is more important to get the ownership of data and the alignment of business processes right. This includes addressing semantic differences between the systems. The days where we couldn’t get one machine to talk to the other or data was stored in a proprietary format were the dark days of integration. Today, the technical side of integration is “easy.” By “easy” I mean it is a simple matter of time and money, but it is possible. It no longer requires magic. But it does require effort. And there are some good integration stories between ERP and PLM, but currently it is mostly customer or through integration partners. So we are mostly in agreement here (I think).

Where Does PLM Stop and ERP Begin? (Busted) - Oleg says “don’t even try to put this border.” Unfortunately, as a manufacturer you have to. You have to develop a strategy about which system will address which process (again, it can be a combination). From a vendor perspective there are no boundaries, and I am not suggesting some industry standard footprint of each solution. But for an individual implementation? In some processes you have two tools that can do the job, you have to pick.

Summary
So that was a “quick” reply to Oleg’s comments on my recent research. I hope you found it interesting. I hope you found it entertaining. Mostly I hope you (and Oleg) recognize the good spirit in which this is written. Respectful debate is good for all of us. I appreciate Oleg’s perspective even when I disagree. And more often than not, we agree.

Do you see it differently? Let us know what it looks like from your perspective.

Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

What I learned this week … is that it is time for me to update the sources where I learn about product innovation, product development, engineering, and manufacturing – and the software that supports it (PLM, etc.). So I thought I would look for suggestions. I have always believed that everybody should have more than one source for information, and so I try to make sure to learn from others and share my thoughts. That is why I chose to focus one-third of my blog posts on “What I Learned,” because if I am not learning then I will just regurgitate the same old stuff. I know blogs like that, they get tiring. My approach? “Two ears and one mouth.”

Places to Learn

Given my role as an analyst and researcher, I get a lot of opportunities to learn:

• Manufacturers – obviously I like to hear about the way technology is working in the field, and how it is helping improve a real manufacturing business. I also like to hear about future strategies that manufacturers are putting in place.
• Bloggers – I find that blogs are a great feed of information with opinions. Different bloggers have different levels of credibility, so I take what I read in light of who I hear it from.
• Print Magazines – I have to admit, I like the feel of the paper, but there are fewer of these around. I typically get news feeds from their web sites or blogs.
• Conferences – I love to hear what people have to say in public, and then ask them some questions offline. Very interesting to hear how the “party line” and the “real story” meet up.
• Other Analysts – I like to share ideas and discuss with other analyst firms. I don’t see them as competitors as much as colleagues. This is why I try to include others’ research in my “Research Rap” posts as well as my own. I should probably read more of their printed works, but I am always concerned that they would feel I am stealing their ideas. I don’t think most really feel that way, and I know many that read my work. I should rethink this one.
• Vendors – I believe that most vendors I speak to have deep knowledge and passion about the industries they serve. I love to hear their views on the market, where they think the future of PLM and manufacturing software will be, and how they plan to support it. I respect vendors’ opinions, although of course I realize that they have multiple motives when talking to an analyst.

Your Turn

OK, that is where I turn to you. What I would love to hear from you (via comment here or direct message) is:

• What other sources should I be paying attention to?
• Which people/companies in the above categories should I be listening to?

So those are my thoughts on getting educated on PLM, I hope you found it interesting. I welcome your help.

A quick peek into some research on … service management from Tech-Clarity Insight: Servicing Medical Devices: World Class Service Management for Medical Equipment. The research extends prior research on equipment service management including the prior report, Tech-Clarity Insight: Equipment Service
Management: Maximizing Profit and Customer Value over the Equipment
Lifecycle. Wow, that was a mouthful! Sorry. In a nutshell, this report is intended to help medical device companies leverage lessons learned from other service-oriented industries, but points out distinct differences in the healthcare industry.

The Research Findings

The research highlights the need for service organizations to master two disciplines in order to achieve world class service:

• Operational Control
• Equipment Intelligence

These two fundamentals of Equipment Service Management (ESM) help companies maintain customer satisfaction, but also allow allow them to profit from the business of service.

For medical device companies, of course, these two disciplines must also address patient safety and regulatory compliance. The medical device industry is highly regulated, including mandatory requirements for tracking product configurations and service history (such as maintaining a “device master record” and tracking what work has been done and by whom). The best practices of ESM are well suited to help medical device companies address both general service management best practices, as well as the unique needs of their industry.

Implications for (Medical Device) Manufacturers

Medical device manufacturers are facing increased pressure from global markets. During the best of times, most saw service only as a necessary function to enable sales. Good service is good business, and happy customers are repeat customers. They are now finding that they also have to be lean in service to maintain profit margins. This is particularly true as more customers ask for fixed-price or performance-based service contracts. Today, more medical device companies are starting to view service as a strategic profit center in addition to maintaining its role in keeping customers happy (and buying more products). Medical device companies should learn from other industries that have already made the transition to being service-led companies, but always keep their eyes on the unique challenges and responsibilities they face as a part of the healthcare industry.

So that was a quick peek into some recent research on servicing medical equipment, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective.

Please feel free to review more free research and white papers about service management, PLM and other enterprise software for manufacturers from Tech-Clarity.

What I learned this week …serves as a cautionary tale for people responsible for product compliance – PLM can help, but compliance requires a multi-pronged approachthat includes strong data gathering, analysis, and docuumentation capabilities (this is where PLM comes in) but also intelligent supply chain relationships and physical validation. This reminder came to me courtesy of AP Enterprise: US buyers must beware in China. The article is a good read, although I had some issues about their dig on 3rd party testing. Their point is you have to know what you are looking for in order to test for it – isn’t that what RoHS, REACH, the SIN list, and countless other lists of substances of concern are all about? Otherwise, some excellent points and examples.

What PLM Can Do

As my previous post discussed, PLM solutions help by Making Product Compliance Sustainable. In other words, PLM helps companies achieve product compliance without excessive compliance cost. Developing products that meet REACH, RoHS, and other compliance challenges requires manufacturers to:

• Identify Requirements
• Document Product Structures / BOMs
• Gather and Validate Component Data from the Supply Chain
• Analyze Products and Perform What If Analysis
• Mitigate Risk
• Document Compliance and Achieve Auditability

Most PLM solutions can play a significant role in documenting products and BOMs. Other, more capable PLM systems have added features to help companies collect and analyze compliance information in the context of the product design and product lifecyle. Clearly, PLM is a major benefit for compliance.

What PLM Can’t Do

What PLM can’t do is ensure that the data is accurate. As the example in the AP article shows, there are unscrupulous suppliers who are polluting supply chains with improperly identified, toxic materials. No enterprise solution alone can prevent this. Reducing exposure to these problems requires:

• Knowledgeable supply chain personnel
• Validation

PLM can still help in these regards, but it is not the primary tool. For example, PLM can be used to document physical tests in the context of the product record and analyze data for inconsistencies and potential inaccuracies. Some PLM systems also manage supplier records that can be used to document vendor audits and other supply-chain validation functions. But in the end, compliance can’t be based on blind faith in PLM data.

Implications for Manufacturers

PLM is a big part of the answer to reduce product compliance risk. Manufacturers can also leverage compliance information to reduce product and component supply risk. But in the end, having the right data is only part of the challenge. Virtual validation such as documentation and BOM analysis must be accompanied by scanning and/or destructive testing to be sure. Testing should be risk-based, but should also continue throughout the product lifecycle and supplier relationship.

So manufacturers will have to keep on guard, and not just in China. I hope you found it interesting. Let us know what this looks like from your perspective.

A quick peek into some research on … the recovery of the software and hardware industry in this AP piece Analyst firm says tech sector to recover in 2010. The data has me thinking about what state the PLM market will be in this year. From all signs I can see, things are looking much better. I am looking forward to hearing from some of my peers in the analyst community that cover PLM directly, but for now here are some thoughts and – as always – my thoughts on how this will impact manufacturers.

The Research Findings

Here are some snipits from the AP release:

• Forrester Research Inc. … expects global spending on technology products and services to grow 8.1 percent in 2010, to more than $1.6 trillion
• Forrester also said U.S. spending is expected to rise 6.6 percent, to $568 billion
• Last fall Gartner Inc. forecast 3.3 percent growth in global technology spending
• IDC, said in December that worldwide tech spending would grow 3.2 percent in 2010

These are very good numbers. The fact that they don’t agree doesn’t bother me because it is not clear that the big gorillas in the analyst community have any standard definition of the market, they use different data sources, and as all manufacturers know a forecast by definition is wrong. But if you look at each of these, they are trending positive. With that in mind, we know several things:

• The software market is expected to recover
• PLM was growing rapidly (double digit growth) prior to the downturn
• The PLM value proposition is stronger than ever, and more companies have proven the value

I am not an economist, but I like the way this looks for 2010. I have also had the opportunity to talk to a number of manufacturers, and they are still very excited about PLM. I expect demand will be for core PLM, but also for other product innovation, product development, and engineering solutions as I mentioned in my post Mythbusting Product Innovation and PLM 2010 Predictions.

Implications for Manufacturers

Hopefully you and your vendor made it through the downturn. The past year saw many manufacturers take a survive and thrive approach to the market, leaning out to make it through the down market but innovating to be ready to capitalize on the recovery. This time was very though on software vendors as well. Although there were acquisitions, there was not a mass market consolidation as some might have predicted. If your vendor made it to see 2010, the chances are pretty good they will have a better year this year. Hopefully, all of us in the manufacturing and manufacturing software community will.

So that was a quick peek into some recent research on Product Lifecycle Management in 2010, I hope you found it interesting. I am looking forward to COFES (Congress for the Future of Engineering Software) where Cyon Research will report on the buying intentions of manufacturing and engineering companies. I had the opportunity to join Brad Holtz in conducting and presenting part of last year’s research on the impact of the economy on the engineering software market, and plan to do the same in Scottsdale this year.

Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

I had the chance to talk with … Sustainable Minds CEO Terry Swack late last year about their entry into the software world. The company introduced their on demand, green product design software to help manufacturers develop greener products. Sustainable Minds is furthering their ecodesign services by offering companies the ability to measure – and reduce – the environmental impact of their products early in the product lifecycle.

What do they Do?

The key to what Sustainable Minds offers is the ability to help companies make design trade-offs based on objective impact critera. Their product, Lifecycle Analyzer (LCA), allows companies to take a holistic look at the way their products affect our planet, including the energy used to produce it, logistics impact, energy to operate in use, packaging, and consummables. Their methodology, “Okala,” includes “impact factors” that allow designers to compare different options in systematic, repeatable, measurable way. I was impressed that the methodology is based on sound science and data from sources such as the EPA, giving the impact factors credibility. Okala is a single figure scoring system that includes 10 impact categories, over 550 impact factors, and CO2 equivalent values. Although there is no way to truly estimate how “green” a product is, the methodology and software provide a logical way to compare options in a meaningful way.

What do they Offer?

The LCA solution is made to work in conjunction with other solutions like CAD and PLM. For example, it can import a bill of material (BOM) from a CAD system to help engineers understand how “green” their products will perform. By wrapping LCA into the new product development (NPD) process, companies have the opportunity to make environmentally-friendly decision when they still have the flexibility to make decisions that won’t adversely impact product performance or cost, changing “green” from an afterthought to a design parameter that can be tracked.

Sustinable Minds also offers a Learning Center and a community to help companies adopt ecodesign strategies. They also leverage a database with impact factors and offer a process as well as tool. While most companies struggle today with just a process, this broad offering provides a way for companies to get started and makes analyzing design impacts realistically achievable.

Who do they Work With?

LCA is an early product, and Sustainable Minds has been running successful beta pilots. The goal is to work with manufacturers, consultants, and education to promote ecodesign. The company plans to roll out 12 industry modules, so they are thinking very big.

So that’s what I hear from Sustainable Minds, I hope you found it useful. What do you think? What else should I have asked them?

What I learned this week … came after long reflection on my predictions for product innovation in 2010. As you may have noticed from the sparse number of posts in December, I must have been doing a lot of reflecting! I decided to look back at my 2008 research at Aberdeen Group called “The Product Innovation Agenda 2010″ to see whether or not my predictions came true, and bust those that didn’t. I hope you find it interesting. For a look at my take on this last year, please see the post What I Learned: Product Innovation and Engineering “2009 Style.”

Disclaimer on my Lack of a Crystal Ball

First, I want to say that my predictions were not based on a crystal ball or some supposed deep insight into the world of product innovation. As a researcher, I always find it better to ask the people who know the answer instead of guessing. In this case, I surveyed manufacturers about their plans for improving product innovation, product development, and engineering between 2008 and 2010. Then, I compared what the leading companies were doing – and planning to do – differently than average and poorer performing companies.

Predictions and Outcomes

Based on the prior research, here are my thoughts on where we stand as a manufacturing and engineering community against our plans for 2010:

Overall, I feel pretty good about how well the study predicted where companies would focus their efforts. Clearly companies made adjustments based on the economy, but the fact that PLM can help both the top-line and bottom-line was a big benefit.

What Did I Miss?

I missed the impact that social computing would have on product innovation processes. The report touched on open innovation and standardizing innovation processes, but I didn’t ask the right questions to see how the explosion of social networking would impact product innovation. I am not sure that if I asked the right questions that manufacturers would have been able to predict the boom in these technologies and their applicability to product development. I hope that I have made up for my miss by reporting on the trend in posts such as Going Social with Product Development, Social Computing Drives Innovation, Social Innovation in Simple Terms, and Enterprise 2.0 Adoption Study Good Sign for Social Computing in PLM. This is a space to watch in 2010 and companies plan on how to compete in 2011 and beyond.

Implications for Manufacturers

Last year I saw companies adopt a “survive and thrive” approach to innovation due to the down economy. The economic downturn forced companies to run lean and many had to downsize. But many companies I studied were keeping at least a subset of their resources on future innovation to be ready for the return of the market. I noticed that the long-term strategies for PLM were the same, but companies were shifting PLM strategies to short-term tactics to reduce cost and get the most out of existing resources.

Predictions for 2011 and Beyond

This year:

• I expect to see continued emphasis on innovation and PLM.
• I believe many companies will be picking up where they left off with PLM strategies, but maintaining their focus on keeping costs in check.
• PLM will continue to expand, as discussed in What I Learned: PLM, Please Take 3 Giant Steps Forward, and will play a large role in helping companies improve product innovation, product development, and engineering on a broad scale.
• Social computing will have a profound impact on product innovation, and 2010 will see many initiatives exploring the value that the intersection of web 2.0 technologies and process have with PLM.

So those are my thoughts on the past, present and future. I hope you found it interesting. What does 2010 and beyond look like to you?

I had the chance to talk with … Aras recently to get an update on their open source PLM offering. I find there is a lot of confusion about open source software, and talking to Aras offered a very simple view of what open source means to them (and their customers). In a nutshell, they say, open source PLM means “no more PLM license fees, ever.” Pretty compelling. But what do you get for free? Cost is only one part of the equation, manufacturers need to focus on the value they will receive. And license costs are only one part of cost. So what’s the deal?

What do they Do?

To be clear, Aras is not a charity or a non-profit organization. They are a serious software company. They just chose a different business model. They are not a bunch of open source zealots trying to change the world. They are PLM savvy software people that intended – and still intend – to bring a full feature PLM product to market and run a profitable business at the same time. Is that open source? Yes, that is practical open source that makes sense for both the vendor and their community (customers).

Yes, Aras has customers. Those customers pay them. The software comes free, you just download it from the Aras site. But companies pay a subscription fee for maintenance and support should they choose them. And let’s face it, most do unless they are just in an exploratory or pilot mode. I am sure that there are some that envision open source as a purely collaborative group of individuals from different companies, diligently working away in their spare time. There is some truth the the value of the community in development, but in general the core development is done by Aras developers. There are community donated solutions to extend Aras, they claim 60 such “projects” available at this time.

One other key aspect of the “Enterprise Open Source” model Aras is promoting is that manufacturers pay a flat subscription fee. This means as companies expand their usage of the solution, their software costs do not rise. There is no user-based fee, which for example might allow a larger company to expand to other divisions for no additional charge. It also means adding users outside of Engineering does not add to the software cost. Again, a pretty compelling model.

What do they Offer?

But even free only makes sense if the solution provides value. PLM systems take time and resources to implement, and there will still be costs for hardware and other supporting infrastructure. If the value is low, even free doesn’t make it worthwhile. One thing that is important to remember about Aras is that they did not start from scratch. Aras was already developing a PLM solution (and one with some very nice architecture, by the way) before they adopted the open source model. So their solution is broad, and includes capabilities that even the biggest vendors don’t necessarily have. An example is APQP (Advanced Product Quality Planning) to support Quality Lifecycle Management in the PLM context. So don’t expect Aras to be a PLM “starter kit” for a custom solution. It is a standard solution, developed by a real software company. They have just chosen a different business model.

Does open source work? Open source solutions are not for everybody. But Aras is certainly worth looking at if you are considering a PLM implementation (or extension). And as far as Aras is concerned, they have managed to grow in a down economy. So it is clearly working for them. For more on Aras, see my previous post One-to-One: PLM? Microsoft? SOA? Open Source? Aras says yes.

So that’s what I hear from open source PLM vendor Aras, I hope you found it useful. I hope it gives a clearer picture on the realities of open source. What do you think? What else should I have asked them?