Clarity on PLM

A quick peek into some research on … how effectively managing engineering data can improve engineering efficiency. Beyond just efficiency, the study looks at how solutions that manage engineering data – whether you call them PLM, PDM, cPDM, EDM, or any other acronym – can play a critical role in helping manufacturers realize their business strategies.

The Research Findings

Past Tech-Clarity research, including Tech-Clarity Insight: Innovating Through an Economic Downturn and Tech-Clarity Insight: Engineering’s Role in Surviving a Down Economy, make it clear that manufacturers are facing difficult times. Although there are positive signs about the recovery, there are lingering impacts on today’s manufacturing business including:

• Companies have to innovate to capture their share of a smaller market (some say they have to increase market share just to stay still due to lower overall sales volume)
• They need to bring products to market faster in today’s competitive, global environment (even before the downturn)
• They are running lean (and recent studies including one from Aberdeen Group indicate that they plan to add resources back in slowly)

What does that mean? As the recently published report Tech-Clarity Insight: Managing Engineering Data – The Role of Product Data Management in Improving Engineering Efficiency says, “manufacturers need to be able to design and develop products extremely efficiently to get the most out of their engineering efforts.” Perhaps that’s always true, and somewhat obvious. But what can they do about it? The report reviews the experience of three manufacturers, including AMETEK (rotary and linear motion control products and electronic instruments), SchuF-Fetterolf (industrial valve company specializing in the design and manufacture of process critical valves), and Visa Lighting (manufacturer of performance decorative lighting). The research finds that managing engineering data has a positive impact on:

• Gaining control of product data
• Collaborating across sites and sharing information
• Automating (and streamlining) product-related processes
• Leveraging PDM beyond engineering data

In turn, these improvements drive business level results including increased engineering efficiency and faster time to market. Looking back at the challenges companies face in a tough economy, these are important benefits!

Implications for Manufacturers

The research indicates that solutions to manage engineering data drive important business benefits. Product Data Management (PDM) is an important discipline and software enabler in manufacturing companies today. Regardless of whether the PDM is a part of a larger Product Lifecycle Management (PLM) solution or a simpler solution that focuses only on the PDM aspects, it is a must for manufacturers today. Manufacturers that haven’t invested in these solutions have a choice to make. They can choose a PLM solution from vendors like Dassault Systemes, PTC, or Siemens PLM. They could choose to get PLM from an ERP vendor such as Oracle or SAP. Others will choose a more focused PDM solution. Which is right? It depends on the business strategy and what the company wants to accomplish – now and in the future.

PLM is expanding to cover a lot more than data management, as I discuss in What I Learned: PLM Please Take 3 Giant Steps Forward. For some companies that fits their strategy well. For others (including some interviewed for this paper) that seems like too much for them. Instead of investing in PLM and using a subset, they chose to work with a simpler solution. Solutions from companies like Arena Solutions or Synergis Software can offer a lighter weight solution for these companies to meet their PDM needs. To be fair, some of the large PLM vendors also offer a simpler solution (although that is too much to get into here). They may not have all of the capabilities that the larger PLM systems do, but if the business isn’t ready for PLM they can offer a long-term PDM solution or a stepping stone to get data in order on the path towards a more broad PLM strategy. Regardless of what path they choose, the study is further evidence that manufacturers are getting real value from PDM.

So that was a quick peek into some recent research on the importance of managing engineering data well, 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 PLM and other enterprise software for manufacturers from Tech-Clarity.

I had the chance to talk with … Kalypso‘s managing partner Bill Poston and new Kalypso partner Andreas Lindenthal about the recent merger of their companies. PLM implementation experts are in high demand, with most many “big name” consulting firms carrying small teams. In this case, two smaller specialists in product innovation and PLM are coming together to make an even stronger team.

What do they Do?

Kalypso is an innovation consulting firm. They help companies set the right strategies, develop the right business processes, and implement the right software to improve their product innovation performance. Kalypso specialized in a number of aspects of innovation including:

• Business & Innovation Strategy
• Front End of Innovation
• Portfolio & Pipeline Management (PPM)
• Development & NPI (new product introduction)
• Value Management
• PLM Technology
• Leadership & Learning
• Intellectual Property Management

Metafore is an very experienced PLM implementation consulting firm. Both firms have rich backgrounds in management consulting, systems integration, and PLM.

Benefits of the Merger

What is the value of the combined team? As I mentioned earlier, PLM consultants are in high demand. More importantly, it is often difficult to find good business consulting in this area. The largest consulting firms typically provide a large breadth of services (strategy, process definition, implementation, development) but lack depth in PLM resources. The smaller firms often have very deep PLM systems skills (although frequently in a single vendor’s system) but lack a breadth of consulting services. Kalypso offered both depth and breadth, even before the acquisition. So although Kalypso is a “smaller” consulting firm, they already had one of the largest independent PLM teams in the industry. The addition of Metafore extends that advantage.

But the new, combined entity is not just a bigger version of Kalypso. Instead, Metafore adds deeper skills in Siemens PLM solutions (namely Teamcenter) as well as more experience with smaller vendors including Aras, Arena Solutions, and Omnify Software. This complements Kalypso’s traditional strength in Oracle (Agile), Dassault Systemes (Enovia / MatrixOne) and PTC (Windchill). The merger also gives Kalypso more programming power, including access to offshore developers.

Who do they Work With?

Kalypso works with manufacturers of all industries, and has done some interesting innovation work in the service industries as well. The first time I met Kalypso in fact, was due to their unique expertise in PLM for CPG (consumer packaged goods) and the food industry. The addition of Metafore’s team provides Kalypso with more breadth in industries such as automotive, A&D, and industrial manufacturing.

Implications for Manufacturers

For existing Kalypso or Metafore clients, the merger will mean access to extended resources and a more capable partner. For those looking for product innovation or PLM expertise, the combined offering provides a compelling alternative to the big consultants that may not have the deep skills you need, or the small firs that may not have the breadth of services (or the top-tier talent) that Kalypso offers.

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

Note: In the interest of full disclosure, I am a paid member of Kalypso’s Board of Advisors. I don’t feel that I would have written the article in any different way if that weren’t the case, but I felt that disclosing this information was the proper thing to do.

What I learned this week … came from some discussions with Chris Williams yesterday about my blog post SAP – Too Much, or Too Little Credit for PLM? in combination with a conversation over breakfast with Oleg, author of PLMTwine. In both conversations I kept hearing about who is going to disrupt the big PLM vendors (Dassault Systemes, PTC, Siemens PLM). Maybe I am just a small thinker, but there seems to be a lot more talk about disruption than actual disrupting going on. Time to share my thoughts, with the expectation that I might be eating my own words on this very blog over the next couple of years.

Disrupting Giants

Maybe it is my jaded view, but I don’t see technology being the disruptor to PLM. I have drawn as many “waves of technology” charts as the next guy, and discussed how difficult it is for vendors to move from one technology to the next big wave. But two things have happened:

• Enterprise software companies have managed to gain significant scale
• Vendors have gotten smarter at riding waves of technology

Already I am sure there are people disagreeing. Let me share my experience.

The Technology Wave Argument

Let’s start with the technology waves. Who will out-technology the big vendors. Will it be a SaaS play like Arena Solutions? Will it be open source like Aras? Or a brand new technology, like Chris William’s Vuuch? Or a more generalized infrastructure technology like Microsoft SharePoint? Or the king of disruption (they are disrupting everybody, I think I heard the words “disruption” and “Google“ at breakfast with Oleg more times than I orderd another cup of coffee (that is saying a lot).

OK, let me share some history that I lived through (maybe you have too). In the ERP world, many players have come and gone. Some have crashed and burned due to their own mismanagement, some have become obsolete in technology and withered away, and others tried and failed trying to migrate to new technology. So why doesn’t this happen to the current largest enterprise software vendor, SAP? Long ago, SAP burst onto the scense with Client-Server architecture with R/3. But truth be told, that transition was a slow and deliberate one. Since that time they have moved their technology along several times. Each time slowly, methodically, and never scrapping the old solution and going for broke on the new one. Countless others tried to grab the brass ring and jump to a new architecture, and drove their companies into the ground.

So while some get frustrated by slow evolution of architecture by big PLM vendors, I say they are being prudent. They are moving deliberately. Some say that will be their downfall. I say slow evolution is the best practice they learned from SAP’s success in ERP. I have heard the “we are going to make SAP (or Oracle, or whatever) obsolete pitch hundreds of times. Some from really great ideas and technologies. But where are they now? Part of the answer lies in the next section.

The Benefit of Scale

The key question in disrupting giants is what can you do that they can’t respond to? What can you where they can’t buy or build their way to the next generation? Particularly when most vendors are several steps ahead of the majority of their customers? Current vendors need to show a vision and a path, but revolution is pretty scary to most of the manufacturs they count as customers. As Oleg points out, and here I agree, one thing they can’t compete with is “free.” But I do not forsee the day that there will be an effort of the scale it takes to develop a full, integrated, PLM system. That is not just technology – it is data model and process as well. Let’s face it, this stuff is complex. But here is the thing. If one of these technologies gets hot, won’t the vendors with scale just acquire it? We are not talking about a solution with the broad interest and potential of word processing (Google Docs) or a brand new idea like social networking (Facebook, etc.). Who except a major enterprise player would invest in disrupting the PLM market? Who would find that investment appealing?

So is it SAP PLM? Or Oracle with their Agile solutions? They have the scale, do they have the will? Is PLM an interesting enough market that they will invest enough to compete with best-of-breed? Realizing, of course, that they have the advantage of their installed base in hand? Perhaps? But I don’t see this happening overnight. I believe the big ERP vendors will get to a level where they can compete, but the big PLM vendors have enough scale to stay ahead. SAP and Oracle will be players in the market, but I don’t think they will own it.

Bottom Line

Will their be acquisitions? Mergers? Sure. The names may change (I didn’t expect UGS to become Siemens PLM), but the assets (software and customer base) are large enough to live in. In my opinion. Unless they fall to their own mistakes, I don’t see a sudden displacement coming. I hope that I am not eating these words at some point, but if I should I will. But that is the way I see it.

Implications for Manufacturers

Buy the solution that works for you. Invest in it. Markets move slowly and software takes a long time to go away. Focus on the solution that meets your business needs, and that you feel you can grow with. Buy a solution that will fit the direction of your PLM vision. Keep an eye on new technologies and see where you can apply them. But I wouldn’t lose too much sleep about disruption right about now.

So have I just grown closed minded? Have I always been a small thinker and I just didn’t know it? Or am I making some sense? I hope you found it interesting. Let me know what it looks like from your vantage point.