Clarity on PLM

What I learned this week … is that product cost is not getting the attention it deserves in PLM. I was presenting on the future of PLM in a PLM-focused event last week in Helsinki. My topic was the future of PLM, and I based my discussion on the four dimensions of PLM expansion (recently updated past post). I got a great question from one of the participants. He wanted to know “why I hadn’t included cost in the future of PLM?“ My response? Good question!

Product Cost in PLM

Product Cost Management (PCM) in PLM is something that I used to bring up on a regular basis. Design for cost is an important initiatives. Particularly as companies are trying to remain lean in uncertain economic times, controlling cost is critical. Even in good times, designing products with optimal cost structures is hugely important to driving high profit margins. So why has this dropped off of my radar? Is the problem being addressed? Is the problem solved? No.

The problem still lingers, but I haven’t seen as many companies willing to try to address it. Perhaps this complicates the roles of ERP and PLM, and companies don’t want to deal with a hard decision on which system supports which part of the process. ERP and PLM both have the potential to help, and should be a part of the solution. But neither ERP nor PLM are ready to take on the PCM challenge fully.

• ERP
  • Has historic costs
  • Understands multi-currency, locations, volumes, other sourcing factors
  • Generally handles cost for the execution of procurement and manufacturing
• PLM
  • Has new parts
  • Understands product content early when costs are locked into designs
  • Generally handles product development decisions in the innovation lifecycle

So each system has some thing to offer. So why instead of addressing this properly with the right combination of ERP and PLM, do companies continue to use masses of disconnected spreadsheets to solve the problem? At least I can hope that they are managing the spreadsheets in PLM so it is readily available and can be reused. But that is only a partial solution. We need a better answer.

Challenges

ERP and PLM both bring value as seen above, but both fall short. Here are some of the issues:

• New purchased parts - ERP is not involved in the early parts of design, and doesn’t help with estimating costs of new parts. PLM (for the most part) doesn’t have a rich enough model for sourcing. I have seen “cost” as a single field too many times, without any concept that the cost will change based on volumes, locations, currencies, etc.
• Newly engineered parts – For brand new parts, there is not historic data to work from. Costs need to be developed based on product characteristics like materials and manufacturing complexity. Comparisons can help, but ERP typically doesn’t know enough to determine which parts are similar in their construction

Who will step up?

Are vendors ready for this? Agile has had a cost model for some time. Siemens partnered with ATK. Dassault Systemes invested in this area. PTC just announced that their InSight product analytics product will address cost. So there is hope. There are also specialty vendors like Akoya and aPriori that help engineers estimate cost based on product attributes. Why haven’t SAP PLM and Oracle (with Agile and ERP) done something about it?

More importantly, are manufacturers ready? Adidas CIO mentioned Design for Cost at a PLM user conference (PTCuser) yesterday. But I don’t hear it often enough. I haven’t seen the momentum that something as important to profitability as cost deserves.

Implications for Manufacturers

If manufacturers aren’t willing to integrate cost into their design processes (and PLM), they will be stuck with spreadsheets. And actually, the question was broader. The question also addressed other financials in addition to cost. For example, is PLM addressing product pricing? Product forecasting? While I think that it makes sense for PLM to address this, I have seen little activity in this area to this point. What a shame. What a great opportunity for someone to step up.

So that is my rant for today, I hope you found it interesting. Why did this fall off of my radar? Did it fall off of yours? Have you done something to address this? If you did let us know about it!

What I learned this week … was that we could use a good, common PLM definition and scope, but we will not get one. The discussion (a lot of discussion in multiple forums, actually) came from my post SAP, Too Much or Too Little Credit for PLM Efforts and another called Who Will Disrupt Entrenched PLM Vendors? Chris Williams pointed out on a LinkedIn thread that he felt maybe the confusion was due to a lack of understanding of what PLM really is, and asked for a common definition. My response? Not so much.

A Not-so-Common Defintion

Chris asked the million dollar question. But PLM is not one thing. While ERP has matured to a more common footprint across the vendors, the scope of PLM from each of the vendors differs. I define PLM as “processes and software used to improve product innovation, product development, and engineering performance.” That is (by definition, not by fault) very broad. There is no one “PLM” definition. The vision of the vendors shows consoliation over time, but today they are very different. Siemens includes MRO (maintenance, repair and overhaul) for A&D. Dassault Systemes has spent much more effort in “lifelike simulation.” PTC includes development of product documentation. Then, there are the applications that don’t come as a part of the suite, which makes each implementation different. Aras includes APQP and quality. They are all different.

Implications for Manufacturers

The lack of a common definition is also why putting in PLM without a strategy is a quagmire waiting to happen. But a common defintion won’t help. While there are standard processes in PLM, they are not as common as in ERP. There are examples of common processes, such as Stage-Gate processes for new product development (NPD) or CMII for change management. But product innovation and product development are not as standardized processes as accounting, as an example. It is not the lack of common PLM system definition at the root of this, it is the lack of common PLM processes. And as much as companies like Invention Machine are putting process orientation into innovation, it will still not be as standardized as ERP functions like human resource management.

So, manufacturers really need to think about what problems they want to solve before implementing PLM. You can’t just install the software and expect any benefits (beyond maybe simple data management). This is what I call the PLM Program, a strategy and vision for PLM that you accomplish in small, incremental steps.

So those are my thoughts on a common PLM defintion, don’t hold your breath waiting for it. I hope you found it interesting. Do you have a better one? I didn’t, if you do let us know about it.

That, by the way, is one of the reasons it is very hard for ERP to simply build another module and call it PLM. That is why SAP has a long program to develop PLM (which will be yet another variation on the PLM theme, different from the others).

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.

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.

I had the chance to talk with … Dassault Systemes and IBM today about Dassault’s announced acquisition of parts of IBM’s PLM business. For many, this is the dissolution of a long-standing marriage that they are comfortable with and makes sense. They may mourn the loss. To me, this is just the final correction to a legacy relationship that has served its time and purpose. Dassault Systemes (DS) and IBM have been great partners – and still will be. But this move will allow IBM and DS to focus on their core competencies and allow DS to continue pursuing their PLM vision.

Dassault Systems Acquires IBM PLM

A Market Correction, a Return to Core Competencies

The relationship has evolved over time. What made sense when the relationship started has changed based on the maturity of the PLM market. DS PLM software is being used by a lot of major companies, and they have their own choices for their systems integrators and consultants. So over time, DS has developed relationships with other leading systems integrators. In the same way, IBM customers may be using DS solutions, or they could be using software from Siemens, PTC, or others. So IBM has developed relationships with these PLM companies. This is just the natural way of things in a multi-vendor market, and it is probably the most beneficial relationship for DS and IBM customers.

To me, this is the natural course of things and it allows each company to focus on their strengths:

• IBM can now focus on systems integration, business consulting, and infrastructure like middleware/SOA/business intelligence/cloud computing in a multi-vendor world. IBM is not out of the PLM business. In fact, PLM is still very strategic to IBM. But directly selling and servicing PLM software from one vendor no longer makes sense. IBM will transition their sales and support teams, but retain their PLM Centers of Excellence, domain expertise, and consulting resources. IBM will still be in PLM in a big way and can focus on their significant PLM opportunities, but in a way that makes more sense for IBM.
• Dassault Systemes can now focus on selling software and servicing their customers. This move strengthens the DS team, and gives them more control of their sales and support business because it is now fully a part of DS, and working with their other PLM partners. DS can now focus on being a software vendor without worrying which customers are direct customers and which are IBM customers. DS benefited greatly from the IBM relationship over the years, but has been ready to move on for some time. And they made a bold market move to make it happen.

This move, although significant, is simply a matter of core competencies and focus. The legacy relationship just didn’t continue to make sense at this point, and it has evolved in this direction over the last several years.

Impact on the PLM Market

This is good for the PLM market, and I don’t think it will be a huge surprise that these two PLM leaders have returned to more focused roles. The way that it happened (as an acquisition) accelerated a needed change, so that might be a surprise. I think this is good for everybody. DS partners with lots of consulting firms and IBM partners with lots of software vendors. Now, none of them have to be concerned that IBM and DS are unnaturally tied together. This is a correction of a legacy issue in the PLM ecosystem, in my opinion. Now, all is right with the universe.

This had to happen, and the IBM-DS relationship has been evolving in this direction over the last several years. The real question that was outstanding in my mind was how DS and IBM could take the final step to return to more focused roles. The end result of an acquisition is probably the cleanest way for this to happen, and one that I think should work well for both businesses. I would not have predicted an acquisition, but now that it is done I think it was a great resolution. It is a win-win for both companies.

One last piece to consider is that Dassault works with IBM, but also works with Microsoft and others from an infrastructure point of view. Having IBM and DS play more focused roles in the PLM ecosystem also makes those relationships more straightforward.

Impact on Manufacturers
The net impact on the manufacturing industry? As much as this change means to the market (and to IBM and Dassault) I think that customers will see little difference. The same people that were supporting them before will continue to support them, although they will have a different logo on their business card. IBM is still strongly in the PLM business, so those IBMers that stay in IBM will still be available as well.

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

I had the chance to talk with … Dassault Systemes CEO Bernard Charles and his team at Dassault’s 2009 customer conference today. I attended the general sessions in the morning and then spent some time speaking with DS execs in a smaller group setting. Once again, Bernard and the team painted a very different picture of PLM than some might have in mind. Dassault does PLM, but the vision does not stop there. It doesn’t matter if you call it PLM 2.0 (as Dassault does) or put some other label on it – DS has a very unique view on what the future will look like. And they have plans to play a broader role than CAD, CAE or product design.

What do they Do?
Dassault is one of the largest PLM vendors in the market. For more on what they do, see past posts One-to-One: Reinventing Dassault Systems? and also One-to-One: Dassault Strives to Make 3D Accessible to All in the SMB with V6.

Where is Dassault Systemes Going?
DS is clearly a leader in the PLM space. How do they view themselves in the future? Some key tenants of the DS vision shared today include:

• 3D Lifelike Experience - “see what you mean” or “SWYM“
• Social Innovation
• Smart Products
• User-Generated Content and Involvement – “from Consumer to Consum’Actor“
• Sustainable Development
• Business Processes – core processes for 11 industries and ~50 industry sub-segments
• PLM Online for All – web-based and SOA

What Does it All Mean?
First, expect Dassault to push the 3D experience hard. Second, don’t expect them to limit the use of 3D and lifelike experiences to an engineering audience. In the manufacturing industries, expect to see them continue to offer 3D applications for new areas such as sales and marketing. DS sees themselves playing just as much of a role helping companies define the product experience (packaging design, shelf placement, consumer interaction) as they do defining the product itself. They have already brought solutions to market and have done some work (not commercial product yet) in areas such as eye tracking technology to analyze customer reaction and behavior. Keep your eyes on the 3DVIA brand and how it fits in with ENOVIA. Note that these solutions have potential in many other industries than manufacturing (or even gaming, another current DS market), with the opportunity to enhance the web to incorporate lifelike experiences. Bernard pointed out in the general session that the Web “does not have emotion or allow people to experience or interact.” What is needed, he explains, are 3D and smart objects that offer realistic simulation and comply with the real-world rules of physics. To me, this feels like a very different vision for PLM than I hear elsewhere.

Also, expect DS to push into more social aspects of innovation. This was one of the biggest topics we discussed in our smaller group. Bernard tells the story of how social networking techniques are helping within Dassault, and how they are learning through their use of Blue Kiwi (a software company they have invested heavily in) and of their own 3DVIA solutions. I don’t think they have it all figured out, which I respect. As I have seen in the past, DS is willing to experiment and learn (as their customers are learning) to leverage new social computing technologies.

I believe that social computing in PLM is a significant new evolution of PLM – see Social Computing Drives Innovation and related posts. Dassault sees this as well. As Bernard said “A year ago, I would have said social software is an add-on, now it is at the core of what we do.” A pretty powerful statement to say the least. There is more to say here, but the post is already getting long (sorry).

What about Product Design?
Don’t take this the wrong way. Dassault is still 100% in the PLM “1.0″ game and working hard to have the best design, analysis, and data management solutions they can bring to market. Dassault continues to invest heavily in their core solutions and the V6 platform. CAD and CAE are not as static, mature solutions as some would like to believe. Some examples of continued investment in the core solutions include:

• Systems Design and Simulation - in Bernard’s words, “Smart products is the future of CATIA” – see post about mechatronics and one of Dassault’s partners in One to One: Big Blues Unprecedented Mechatronic Opportunity for more.
• Continued Development to Support New Manufacturing Materials -composites, nanomaterials, …
• Integration and Interoperability – as an example, Simulation Lifecycle Management of SIMULIA data in ENOVIA

There is more here, but that is not the focus of my (rather lengthy, sorry) post.

Takeaways and Implications for Manufacturers
A demo of 3DVIA and the new iPhone application was a great example of the uniqueness of the DS vision. Instead of a car or plane Bernard showed 3DVIA on an iPhone. He took a picture of the furniture on the stage, and then added a table from the 3DVIA library. Not satisfied with the boring table, the model is sent via e-mail and a designer modifies it in 3D Shape. It is published back to 3DVIA, pulled up on the iPhone, and now we see a picture of the stage with a newly modeled table along with the existing furniture. The punchline is that “3D opens the door to the world we imagine.” Not a standard main-stage demo for a PLM company. Expect Dassault to push further with their vision of making the virtual world better reflect the real world.

So Dassault Systemes vision is different. To be I am not concluding that it is better, but I am concluding that it is unique. It is not for me to decide what companies will gain the most value from, only the customers and the market can decide that.

So that’s what I hear from Dassault Systemes. Bernard and the team are clearly not satisfied with a goal of leading today’s market, but shaping the future market as well. I hope you found it useful. What do you think? What else should I have asked them?

A quick peek into some research on … the priorities, plans, views, and economic outlooks of companies that use engineering software. The survey-based study, published last night by Cyon Research, paints a very interesting picture of how manufacturers plan to invest and leverage engineering software (and related hardware) in the near future. I have had the opportunity to review and comment on the report during its development, and one thing that continuously struck me is not just how useful the published insights on the future of engineering software are, but the richness and depth of the information that the Cyon team couldn’t fit into the report.

The Research

The research spanned companies that use CAD, PLM, CAE, and other technical software, and included responses from almost 600 people. The report breaks down into a number of major categories, including:

• Purchasing plans, policies, and priorities
• Hardware refresh rate
• Financial outlook
• How companies differentiate themselves
• Engineering software selection criteria
• Views and plans on new releases from major software vendors (Dassault, Autodesk, Siemens)

In addition there are some interesting portions on who controls the BOM (and age-old question) and some insight into the relationship between CAE application usage and other engineering software used. The report contains a tremendous amount of information, with a number of very interesting charts. Plan to spend some time reading it if you have the opportunity, there is a lot to dig into.

Key Takeaways

There is far too much for me to give justice to in this space, but I will try to point out some of the more interesting things I learned from the report:

• Some companies have cut spending on engineering software – 29% of respondents indicated that they cut spending in the first half of 2009, with further cuts expected but at a slowing pace (for example 19% in first half of 2010). Note that these are likely in addition to cuts made in earlier budgets, so the total number that have reduced budgets from 2008 levels is probably higher.

• Many companies are playing “wait and see” -  42% are “considering or about to cut” spending if their business conditions worsen. This is what Cyon calls the “overhang” of the cuts, which includes the potential for further reductions dependent on the general economic conditions.

• Companies are planning to pick up spending (when they can) – in the words of the report, “The bright spot here is the longer-term outlook, 2010 and 2011, for increased spending in the purchases of design, analysis, and data management software.”

• Companies still have an appetite for improved solutions – the report gives details on the planned adoption of new technologies (V6 from Dassault Systemes, Inventor Fusion from Autodesk, and Sychronous Technology from Siemens PLM). I can’t share specifics, but across the board there are plans to implement the new solutions, although more Autodesk users say it is “too early to tell” given the maturity of the solution at this point.

Implications for Manufacturers

There are some valuable insights for manufacturers in this report to compare their strategies with their peers and competitors. The report provides some interesting detail on specific industries and their behavior, particularly on how each industry reported they plan to compete (product quality was the most commonly targeted differentiator overall, but this varied widely by industry).

I think this report is potentially even more valuable for software vendors.  The research gives them insight into what is important to their customers, and how they are planning to spend their money. For software companies, this can provide them with invaluable input into where they should focus their efforts to best serve their customers, particularly at a time when many are considering reductions in spending.

So that was a quick peek into some recent research on the viewpoint from engineering software users, I hope you found it interesting. Does the research reflect reality? Do you see it differently? Let us know what it looks like from your perspective.

I had the chance to talk with … Razorleaf during a research project earlier this year. Razorleaf helps manufacturers leverage PLM, Design Automation, and other enterprise technologies to improve product development and engineering processes. During the conversation, it was clear that they really understand how enterprise technology can be applied in an engineering environment. They are ready to step in and deliver the enterprise services required to implement PLM. But how much of the “PLM” ecosystem is really ready and capable to implement PLM? In my experience, too few.

What Razorleaf Does

Talking to the people at Razorleaf, I recognized the approach and skillset they use to implement engineering solutions. Yes, they know the products. But they also know how to help companies transform their processes, change their business, align their organization, and all of the other lessons learned from implementing systems like ERP and supply chain management. I recognize these in part from my research, and in part from spending a number of years with Andersen Consulting (now Accenture) implementing enterprise applications. These solutions require more thoughtful implementations than engineering tools, because improving the productivity of an individual is not enough. They have to improve the way the overall business works together. Not an easy task, but that is where the value comes in. This is what Razorleaf does.

How Razorleaf Fits in the PLM Ecosystem

Why did it strike me that they had this knowledge? Because too few resellers in the engineering software market have these skills. What comforted me, though, was that it is exactly those resellers that call on Razorleaf to help their clients. The good news is that the resellers know – or maybe it is their manufacturing customers – that there is more to a PLM implementation. This is likely the reason that other companies such as Kalypso (an innovation consultant with strong enterprise and PLM skills) is on the scene at so many PLM implementations. I find frequently that companies like these are pulled into implementations early on to help augment the skills of the software resellers (and even the vendors themselves).  It also helps explain the importance of a resseler like NovaQuest (a Dassault Systemes reseller with significant PLM experience)

Impliciations for Manufacturers

Why is this important to the manufacturing community?  If you are implementing PLM, make sure that those doing the implementation understand the different between implementing software tools (CAD, CAM, CAE, etc.) and enterprise applications like PLM. It can be the difference between a technically successful implementation that provides little or no business value (what I like to call a failure) and improving your business performance through the use of PLM technology.

So that’s what I hear from Razorleaf (with some additional perspective thrown in, I think it might be as much “What I Learned” as “One-to-One this time). I hope you found it useful. What do you think? What else should I have asked them?

I had a chance to talk with…the Dassault Systemes team about their recent V6 product release.  They reinforced their key messages during the conversation: SOA based on a single data model, powered by ENOVIA, leveraging 3D as a media.  They also continue to speak of PLM 2.0, referring to the maturation of PLM from an engineering workgroup application to a value chain wide new product development and launch platform. I agree with this assertion – PLM has evolved in recent years to include the front end of innovation, product portfolio management, and direct materials sourcing. I always believed these were aspects of the PLM footprint, but organizations still approached each aspect of the product lifecycle in a siloed fashion.  Now with this release, these tenets are accessible to the small to mid-sized businesses (SMB) as well.

What does V6 Offer?

The key focus of the V6R2010 (V6) announcement is SMB (V6 PLM Express), the current incarnation of the SMARTEAM/CATIA bundled offering. Much like Siemens PLM and PTC, Dassault saw great success in the mid-market in 2008 so hope to build on that momentum with this release.  Basically, the goal is to open up the V6 platform – and “key PLM 2.0 values” – to the mid-market.  So what are these values?  There are the six points they espouse:

• Global collaborative innovation
• 3D lifelike experience across the value chain
• One platform enabling the federation of knowledge
• Online creation and collaboration – product authoring and collaboration over the web
• Ready to use PLM processes, by role and industry
• Lower cost of ownership and operations support

Much like other PLM vendors (e.g. Oracle), Dassault has focused their current release on enhancing the user experience.  V6 provides design (CATIA LiveShape), collaboration (3DVia composer pro), and simulation (SIMULIA DesignSight) to non-technical users, and offers role-based consumption of product information. The company has also further developed their systems engineering capability, by enabling building of component libraries to enhance reuse, and enhancing modeling capabilities.  There are five role-specific interfaces within v6: shape design, mechanical engineering, equipment engineering, machine engineering, and project team members (i.e. non-engineers).  Appropriate capabilities are presented in the user interface depending on role: industrial designers may have access to modeling and basic simulation, mechanical engineers have access to detailed design functions, and manufacturing process planning, and other members of the product launch team could have collaboration, sourcing and review capabilities.  New product development information (whether from other CAD tools, or enterprise applications) is presented through 3DLive, Dassault‘s web collaboration application.

How Does V6 fit into the PLM Ecosystem?

The six values Dassault speaks of are pretty much the same messages all large PLM providers have with their most recent product releases, although Dassault does place more emphasis on leveraging 3D across PLM processes and roles.  The challenge with this is convincing manufacturers who just want to arm their engineers with PDM and CAD that there is indeed value in sharing 3D visuals with marketing, field service, and suppliers (as Dassault says, “3D for all”, or in Autodesk‘s words, “democratizing 3D”).  I absolutely think there is value in this, whether for a large or small company. Marketing would be able to create more compelling promotions, leading to increased revenue. Field service would be able to respond to product quality issues more effectively, leading to happier, more loyal customers. Suppliers would be able to collaborate on new product designs and provide the most effective parts or materials.

What Else Does V6 Offer?

Two other key areas which Dassault has made a conscious effort to address are making the transition of V4 and V5 customers to V6 easier (with multiple “transition scenarios” from version co-existence to complete migration), and ensuring V6 is open so existing investments in tools and other enterprise applications can be leveraged, and data can be federated across the value chain. These two points alone will be key to accelerating acceptance of V6.

So that’s what I hear from Dassault. What do you think?

Updated Post:

PLM evolution gets a fourth formal dimension – process. I am updating this post about a year after I wrote it. I just re-read it, and thought it was worth making at least one minor adjustment. Since that time, I realized that the “three dimensions” of expansion did not give enough emphasis on the importance of business processes. I have changed the way I present this to the “Four Dimensions of PLM Expansion.”

I thought it was worth updating this past post with (at a minimum) the graphic as I present it now. Looking back, it clearly should have been this way in the first place!

What I learned this week … came from reflecting on three major PLM product announcements this week. In one week, Dassault is announcing the new release of their “PLM 2.0″ suite, Oracle is announcing the next release of Agile PLM, and Siemens PLM is announcing the new releases of Teamcenter and Tecnomatix. Jeff Hojlo and I will be covering each of the releases in our blog, but I thought it made sense to start with some context-setting across all three. I am impressed with the amount of investment that PLM vendors have made in their products in what has been a difficult year for enterprise software in general, kudos to all three (and the others that have continued to invest in this solution set that continues to grow in importance).

Note: A special thanks to all of my friends in the vendor community for picking my vacation week at the beach to come out with some of the most exciting PLM news in some time! They couldn’t have just checked with me first (sarcasm intended).

Context from Past Discussions and Perspective

I have talked in the past about PLM expanding in three directions:

• People – Product development and product innovation are expanding across the enterprise to more people inside and outside of the business
• Product – A “product” consists of much more than R&D or engineering specifications, and needs to include a richer view that includes commercial considerations so we are looking at the “whole product.” In addition, the technical view needs to grow to include mechanics, electronics, and embedded software
• Lifecycle – Product-related processes are being integrated across previously disparate functions

As I talk about these three, I have to give an honorable mention to:

• Process – PLM processes are being expanded and integrated across all three of these directions, and it this extension and integration of processes and information that really puts the value into PLM. Without process, the other three are not possible.

Giant Leaps in Functional Scope

First, I want to start with the functional enhancements that the vendors have focused on. In the releases, I see significant investment in all three areas above. But it’s easy to talk about where your predictions come true. Instead of focusing on what I got right (not my style), let’s focus on what I missed. I missed:

• SOA – From a technical perspective, the adoption of service-oriented architecture (SOA) promises to make PLM more web-friendly, but also to allow it to be more easily pulled apart so individual elements can be incorporated into composite “mash up” processes and applications.
• Analytics -I am not going to be big enough to admit that I didn’t see this one coming. I have lived through ERP and Supply Chain and seen the transition from gathering information to leveraging it to make decisions. This is happening in PLM in a number of different areas, including designing for compliance, cost, etc. It is exceeding my expectations in terms of adoption by the vendors.
• Web 2.0 – The impact of Web 2.0 technologies and concepts are having a very big impact on PLM. The further expansion of collaboration and social computing in product development is starting to be seen. PTC also focused on this during their recent PROuser event and their earlier release of ProductPoint.

Implications for Manufacturers?
So what does this mean for manufacturers today? If you are a customer of one of the three vendors, you have some very nice functionality (and technology) to look forward to. It is time to start looking at the potential to improve your business and plan your migration. Vendors have spaced out releases in recent years, so hopefully you are due. It is time to start learning about the capabilities available, deciding how to take business advantage of them, and planning for their adoption.

If you are not a customer of one of these three vendors, take a look at your vendor to see how they are doing against the criteria above. I have seen some nice progress from PTC and SAP this year as well.

If you are not using PLM, it is time to consider why not. I believe there are very few manufacturers that will remain competitive without these capabilities. Further, this is just more proof that PLM is continuing on the path to become one of the most important – if not the most important – enterprise applications for manufacturers. The continued evolution of the solutions is just further evidence of the additional value that customers are demanding from their vendor partners.

So that is what I learned this week, I hope you found it interesting. Let me know what you think. Look for more on each relevant release shortly. After all, the sun is bad for your skin and PLM is good for everybody!