Clarity on PLM

What I learned this week… came from conversations with manufacturers and SaaS vendors over the past year. I believe the market is ripe for a SaaS approach to PLM. When it comes to product development, every organization strives for efficiency, flexibility, better collaboration (internally and externally), and easier upgrades. Yet, business models that could enable such benefits, such as Software-as-a-service (SaaS) have not been widely adopted to support product lifecycle management. The ongoing economic malaise, however, is driving manufacturers to rethink how they deploy PLM, and other enterprise software systems.

One consistent point of feedback I have heard is that green-field opportunities (where there is no incumbent PLM solution) are the low hanging fruit for SaaS – no surprise there. This is why for the most part, deployments are mostly at small to medium size businesses, or in a division within a large company, where easy deployment, management and upgrade are of paramount importance. Typically, it’s difficult for the division champion of a SaaS approach to sell the concept to executives of putting a company’s product crown jewels online. And the concern isn’t just security; in many cases it’s performance: does the system have the ability to scale and handle large CAD models, and enable real time collaboration across the globe?

Social Product Development can Drive SaaS
One reason why I think 2009 (and following years) will be the year of the SaaS PLM model are the pervasive trends of social networking and open innovation. Companies in markets as diverse as complex discrete and fast moving consumer goods recognize the power of collaborating quickly with each other, suppliers, and customers during the new product development and launch process. And social networking and open innovation – “social product development,” if you combine the two – is the perfect venue in which to do this; the ideal foundation for this open approach is SaaS.

Implications for Manufacturers?
I don’t believe that SaaS will replace “traditional” PLM; a hybrid approach will persist. There will still be the need for local CAD data management so small engineering and design workgroups can quickly iterate on an idea or design, and secure certain information behind the firewall, not in the cloud. Hybrid models, at least at large companies, will persist for the near future – for example local data, CAD design, and manufacturing process management within the four walls, and the “business layer” of PLM such as customer needs management, product portfolio management (PPM), direct materials sourcing, and collaborative design (assuming a strong authorization system is in place) in a web based, service oriented system. Regarding PPM, however, I think many manufacturers will likely want to maintain much of the information about their product portfolio locally, and make only appropriate segments of the information available via their web interface.

A hybrid approach can be beneficial because SaaS PLM vendors have strengths that can complement an existing PLM implementation. For example Arena Solutions excels at BOM management and offers portfolio and supplier management capabilities, brightidea.com and Arc90 (with their Kindling app) focus on CNM, Accept Software provides CNM and PPM in a SaaS model. In the apparel & footwear world, Zweave and World Fashion Exchange provide line planning, calendar management, and supplier collaboration in a modular, SaaS format.  A flexible, open approach such as this could help accelerate enterprise-wide adoption of PLM, particularly in fast moving markets that are newer to PLM, such as apparel and CPG.

So that is what I learned (or have been thinking about) this week. Let me know what you think: is it finally time for SaaS to make its mark in PLM?

I had a chance to talk with… the team at Sopheon about their recent product enhancement in the customer needs management (CNM) space. Through an OEM agreement with German based idea management vendor, Hype Software, the product portfolio management company has announced Idea Lab, an idea discovery, management, collaboration and analytic offering – areas that were partially addressed by their existing idea management offering. With Sopheon’s existing portfolio management and product planning/roadmapping strengths, these additional capabilities at the very front end of innovation give it a strong offering in the customer needs management space.

What do they Offer?
My expectations going into the meeting were that Idea Lab would be yet another idea capture and campaign management tool – but it is more than that. With its analytical and social networking capabilities, this is a rich offering when combined with Sopheon‘s portfolio and product planning capabilities. We look forward to hearing about customer successes, as the solution gains traction.

Two of the most interesting points discussed were the need to connect innovation to corporate strategy, and the ability to “develop communities around the concept.” For the latter, users have the ability to search the system for like ideas, and collaborate with people across the company who are working to solve the same problem. Really, it facilitates internal social product development: a simple way to reuse IP and innovation (perhaps in a different product group) and avoid the age old corporate problem of multiple groups working on the same thing. There are also idea portfolio analytics layered in, enabling the innovation team to filter to the best ideas, based on how each division (marketing, manufacturing, R&D, supply chain) ranks an idea; thus ensuring the entire company has a voice in what products get brought to market.

As far as connecting with corporate strategy, amen! Too often, PLM happens in a box, disconnected from corporate strategy – whether a brand new idea or (most likely) a product enhancement, it needs to be connected to a corporate goal, whether that be (for e.g.) to grow market share in X market by 10% in 2009, or increase revenues by 20%. I like the “Message from the CEO” on the front page of Idea Lab, stating the importance of finding a solution to the posed problem. One enhancement opportunity would be to be to have the CEO be specific about what corporate goal the idea would support. In other words, why should I, the employee, take the time to participate in this idea campaign?

Taking a page out of 3M’s innovation book, a nice touch in Idea Lab is the innovation recognition program. Top innovators in the company can be recognized through number of innovation credits, built up through number of ideas and comments submitted. In other words, it’s a mechanism for companies to expedite involvement in innovation through healthy competition with fellow employees.

How Does it Fit into the Ecosystem?
As my last post noted, there are few PLM and idea management solutions that see the full benefit of linking together the front end of innovation with the rest of the PLM process – where ideation is connected with product modeling, roadmapping, and requirements management. I think Sopheon realizes this – that said, you wouldn’t buy Accolade from Sopheon for your modeling, PDM, requirements management, or manufacturing process planning needs; there is still the need to integrate with a PLM system.

I like the concept of innovation governance – as noted in my last point, I believe that the creative innovation process needs to be corralled at some point into a portfolio of ideas/feature enhancements, a portfolio of products, a set of requirements, and a product roadmap. “Governance”, however, can be a scary word for front end of innovation practitioners like designers, marketers and brand managers – but what Sopheon is striving to do with Idea Lab is build the bridge from the free-form ideation process to innovation governance, not impede it.

I expect this move will spark a continued push from primary rivals Planview (which partners with Siemens PLM), and CA (with their Clarity product) into product planning and portfolio management, from their roots in IT portfolio management. These vendors with an “IT governance” heritage are competing now in, as Sopheon calls it, the “innovation governance” space.

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

What I learned this week… came from The Front End of Innovation event in Boston. One thing that stuck in my mind from the event, based on conversations with end users and from presentations, is the lack of connection between the front end of innovation and the rest of the product lifecycle. Customers seem content with their current, often manual process of collecting ideas, and collaborating with the team. And there are some very mature approaches to the front end of innovation – as exemplified in presentations from Fortune 500 companies in the CPG, life sciences, A&D, and high tech markets.

The Front End Should not be Gated
Let me be clear: I absolutely agree with the assertion that the front end of innovation, at the idea formulation and management phase, needs to be free-form, creative, and not constrained by a gated process. But at some point, doesn’t this whiteboarding/brainstorming phase need to be connected to a modeling tool (for virtual prototyping), a product roadmap (so you can launch new products at the right time), and a set of requirements? Without a good flow into portfolio management, product planning, and modeling/engineering/manufacturing, many game-changing ideas may never come to fruition. One vendor that sees this vision is product portfolio management company Sopheon, which last week announced an OEM partnership with Hype Software, provider of idea management and analytics software. Another vendor that understands that this bridge between the front end and the rest of the product lifecycle needs to be present, is Invention Machine; they have connected their semantic search engine, Goldfire, to other PLM systems via partnership, much as Endeca has. Microsoft, Oracle and SAP also have embarked on front end initiatives in the past year.

And although the big three CAD and PLM guys – Dassault, PTC, Siemens PLM – are not currently focused broadly in this area of PLM, by default, however, with their strength in product modeling and a requirements management solution, they do have an offering at the front end. In fact one of the keynotes, from National Instruments, touted the benefits of modeling and simulation as an innovation driver. The presentation discussed how the key to successful product development is iteration, and modeling provides the perfect platform to create, try designs out, and prove concepts before building the actual product. Absolutely!

Social Product Development in its Infancy
What about the connection to social networking? This was also discussed at the event. Is “social product development” a pipedream, or reality? We think it’s only a matter of time before manufacturers see the need to leverage this phenomenon (see Jim’s thoughts on social computing in product development for more ). At the event, there were a couple of tracks about leveraging social media to enhance the front end of innovation but surprisingly, many end users (a diverse cross section of CPG, medical device, food, industrial ) were not using social networks as much as I would have thought. Certainly there is dabbling in the medium as companies try to determine the value to product development; most examples exist on Facebook and Twitter, where the conversation about company or product is monitored, and discussion groups (or “fan of” groups) are formed which can be leveraged for PR purposes, and (at least theoretically) to get input on new product ideas.

FedEx has a team of people focused on innovation, and presented on their need to keep track of the conversation in the cloud; Lockheed Martin is piloting the usage of virtual worlds to collaborate across their engineering team. But examples of traditional voice of the customer and ethnographic methods of understanding customer behaviors being enhanced through leveraging social media is not a mainstream phenomenon – yet. At next year’s FEI event, I expect much progress will be made on this front, though.

Implications for Manufacturers
The front end of innovation cannot be constrained by gated processes – creative minds that help manufacturers to grow would simply revolt. This was noted by executives from P&G, to J&J, to HP. But once a portfolio of ideas and then products is formed, I believe there needs to be a connection with the broader PLM process. Designers and marketers could benefit greatly from a collaboration system that connects them with the downstream product development team – engineering, supply chain, and manufacturing.

This, combined with rich modeling functionality means many PLM vendors do in fact have an effective story to tell this “non-traditional” PLM audience. The very front end (idea capture, management, analytics) will be filled, at least in the short term, by best of breed vendors like Accept, Brightidea.com, Hype, Imaginatik, Mindmatters, Planview, and Sopheon, as well as consulting firms Maddock Douglas, NineSigma, and Sagentia. A little company in Redmond named Microsoft also has a large presence in this space, because manufacturers are looking to leverage their existing investments in Sharepoint, Performance Point (now integrated with Sharepoint), and other MS tools.

What do you think? Should this front end of innovation be connected tightly with the rest of the product lifecycle, or would this corrupt the creative process?

What I learned this week . . . came from The Front End of Innovation event in Boston. At day one of the event, Author Jim Collins (Good to Great, Built to Last, Why the Mighty Fall) gave a rousing presentation of findings from his latest research. According to his research, the reason mighty companies fail is not because of lack of innovation. In fact the ones that succeed in the harshest conditions, at “27,000 feet on Mount Everest,” are not necessarily ones who bring a lot of new products to market; it’s the companies that are disciplined in their innovation approach, and have the right people working on the right projects.

 I believe this speaks to the need to apply innovative thinking continuously at every point of the product lifecycle, not simply at the ideation stage. Innovation can take place in the design studio, the marketing office, the shop floor, and the supply chain and applied to the front end of innovation to make products and services better. In other words, don’t think of the “front end of innovation” as just “ideation”; it is much more than, as this humorous IBM video depicts, creative people lying on the floor meditating, coming up with cool ideas.

The “20 Mile Marchers” Win
The winners in the harshest of business conditions (like now) are also, perhaps most importantly, companies that stay the course on their mission and strive to make their product or service set better in support of that. One large CPG company was cited as a company that introduced too many new products too quickly, and within five years wasn’t a stand-alone company – this is “Packards Law” where a company is more likely to fail because of too many products and projects without the right people in the right seats. Disney, on the other hand, has a diverse product set that exists religiously in support of their mission: make people happy. They have survived multiple recessions, and the death of their charismatic founder. Innovation is a universally accepted “article of faith” as Collins put it – that’s how it’s assumed, in large part, we’re going to come out of this economic mess stronger, right? But what if innovation isn’t the only key to survive and thrive in the long run? This, as Collins says, is a “wonderfully delicious puzzle.”

Implications for Manufacturers
The takeaway is it’s all about balance: as multiple presenters and attendees at the event said - of course a company needs to innovate, but not at the expense of straying from its mission and certainly not without the supporting team to make the new product development and launch process a success. The companies that succeed in the long run, as Collins puts it, have the discipline “to stay the march” – in other words it’s a marathon, not a sprint, as they say.

Perhaps most importantly, I believe, innovation (especially at the metaphorical 27,000 feet on Mount Everest) is not just ideation; innovation can and should take place at any point on a product’s lifecycle. There is a wealth of information that could be a catalyst for innovation: customer feedback, manufacturing cycle time, product quality issues, environmental impact, supply chain efficiency, recycling and reuse… all should be data feeds to the front end of innovation, which support the goal of every company: make good products, make money, and keep the customer happy.

So tell me what you think – what does the “front end of innovation” mean to you?