Clarity on PLM

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.

I had the chance to talk with … the PLM team at SAP recently to get an update on their plans and their progress to date. I have stayed in touch with them over the years, and have always been impressed by the opportunity they have to connect the business of manufacturing with the business of product development. As I reflected on the conversation, I struggled to understand why after all of the years of SAP getting too much credit for PLM, why they don’t seem to be getting as much credit for their recent efforts as I would expect. Today I hope to present both sides of the argument in the hopes to bring some clarity to the subject, and to start a conversation so we can all learn from each other.

Too Much Credit?

I have focused a lot of discussion on the complementary roles of ERP and PLM, and for many companies that translates to the roles of SAP and PLM. I have cautioned manufacturers in the past:

• Not to assume that an ERP provider that “checks the box” for PLM actually has a suitable PLM suite
• Don’t assume that any company offering both ERP and PLM have actually integrated them in a way that works for their particular business
• PLM suites vary significantly between vendors, even among the “best-of-breed” vendors
• PLM is not just another module of ERP, but a suite of solutions itself with some unique requirements

Those comments were typically in reaction to the “suite provider effect” where executives take a cursory look at a software requirement (such as PLM) and say “Doesn’t our ERP company have that? Let’s just use theirs.” While the ERP vendor’s solution deserves a review, if it doesn’t meet the business needs than the potential benefits of a single vendor and an integrated solution don’t add up to much. This conversation started way back in 2003 with my article Can ERP Speak PLM? in Technology Evaluation Centers (TEC) when I served as the analyst for the PLM Evaluation Center.

With all of those cautions in mind, my hope was that manufacturers that have an ERP (such as SAP) would do a thorough evaluation of their needs, and then select the solution (or solutions) that would work best for their business. In other words, they shouldn’t just take PLM from their ERP provider blindly.

Not Enough Credit?

With all of those cautions aside, the ERP provider should get a fair evaluation. There are benefits to integration and a single vendor solution. And SAP has clearly invested in PLM. I wrote about SAP’s PLM strategy and roadmap in the past on my Manufacturing Business Technology blog.* SAP has taken on a multi-year program to enhance their PLM offering, and they have made significant progress. Last year they introduced a new, web-focused interface that pulls together a product-centric dashboard for an item. The “PLM Object Navigator” as it was called offers information about a part from both ERP and PLM perspectives, including configurable sidebars. They have now extended that interface to the process PLM community, where SAP has a significant installed base.

But user interface isn’t all that SAP has focused on. They have integrated CAD management and visual communication capabilities to develop visual representations of the CAD models that all users can access. They have added functionality including labeling functionality for consumer packaged goods (CPG). They have also enhanced product compliance, collaboration, and requirements management.

SAP has remained consistent in their focus to support four PLM “value scenarios,” enabling business processes to help manufacturers in specific initiatives to establish “Product and Service Leadership“:

• Consumer-Driven, Sustainable Innovation
• Integrated Product Development
• Continuous Product and Service Integration
• Embedded Product Compliance

The names have changed slightly over time, but the needs SAP is trying to meet are well-planned, important, and have remained consistent. Clearly, SAP has a plan and has been hard at work to achieve it. 

The Confusion, and the Questions

When I talk to the SAP PLM team, I can feel the excitement and their sense of accomplishment. I hear about the progress on their plans and how they are fulfilling the needs of their customers. Yet from the manufacturers I speak with, I don’t feel the same enthusiasm. So here are my questions:

• Am I talking to the wrong companies, or the wrong people?
• Is it still too early?
• Did the down economy last year stall SAP’s ability to get the word out?
• Does SAP not have the ear of the product innovation, product development, and engineering staff?
• Are manufacturers tired of hearing what is coming?
• Is there just still more that needs to be done?
• Are the best-of-breed vendors too far ahead? Or too entrenched?
• Is there a slow revolution happening that I am just not in touch with?

So that’s what I hear from SAP, and my resulting confusion. I hope you found it interesting. What do you think? Can you help shed some light on my questions?

*Note: Sorry, no link to past posts on SAP PLM right now. Unfortunately the blog was taken offline by Reed Business when they closed the magazine. I hope to get that content back at some point to share with you.

I had the chance to talk with … Tim Frost of Burner Systems International (BSI) about their adoption of Product Data Management (PDM) to improve engineering and new product development performance. Tim explained to me that one of the primary goals for their adoption of PLM was getting a handle on their product data. But BSI also wanted to expand collaboration outside of Engineering and improve their time to market. The case study, Tech-Clarity Business in Focus: Burner Systems International – Improving Collaboration with Product Data Management, describes BSI’s experience from recognizing the need for action due to increased complexity in their business all the way through today’s benefits and plans for the future.

What do they Do?

BSI is a supplier to the OEMs that manufacture gas appliances. Like most suppliers, they compete very aggressively with their competition. They compete based on innovation, but most importantly on agility. They need to be able to react quickly to customer needs and bring the right component to market. Due to increased competition, growth by acquisition, and globalization BSI faced a huge challenge. As Tim tells me “We ended up with plants all over the globe, and we had to integrate engineering functions and data.”

What did they Do?

Recognizing the increased complexity, BSI took action. “You can use folders and you might get away with it for a while, but with multiple revisions you can’t manage it,” Tim explains. The solution was to implement a Product Data Management (PDM) system.  Just as importantly, they wanted to improve collaboration across departments. Tim describes how they implemented a PLM system (which includes PDM) that can be used by engineers and non-engineers alike. We discussed how departments like Quality, Manufacturing, Purchasing, and Sales get involved in the product design and development process.

What are the Results?

The new PDM system has shrunk cycle times and helped them make fewer manufacturing errors. According to Tim, those errors can cost up to $100,000 each. BSI is pleased with the results. “We know that we are faster in developing new products, I would estimate 25% faster,” Tim says. “We know that we are better prepared for launching production due to better input and collaboration from Manufacturing, and we know that we are less likely to make bad parts due to out of date drawing revisions.” The project is a success, and BSI is looking to further their gains by continuing to go beyond PDM to a more full PLM solution, leveraging the infrastructure they have in place.

 Implications for Manufacturers

 Burner Systems is a great example of a smaller company that desperately needed to get product data under control. At the same time, they have managed to achieve even more strategic benefits through collaboration and improved time to market. PDM is often the first step in a broader PLM Program.

So that’s what I hear from BSI, I hope you found it useful. What do you think? What else should I have asked them? A summary of the report is available from the Tech-Clarity site, and the full report is available for free from Siemens PLM, the provider of the Teamcenter Express software that BSI uses (and the sponsor of the report). Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

A quick peek into some research on … product compliance for formula-based companies in a report titled Issue in Focus: Product Compliance – The Hidden Tax on Innovation: Enhancing Innovation in Formula-Based Companies through Real-time, Automated Compliance Monitoring. One of the predictions that came true in Mythbusing Product Innovation and PLM 2010 Predictions was that PLM would expand to address product compliance. My past reports, such as the report on Making Product Compliance Sustainable, focused primarily on regulations like RoHS and REACH that impact product people that make discrete items like electronic or mechanical devices. But formula- and recipe-based product developers face their own set of compliance challenges. This report focused on their needs, and how PLM systems can help reduce the manual workload burden placed on them by product compliance. 

The Research Findings

The research included interviews with consumer goods companies including Revlon, Zotos International (a division of Shiseido Co,. Ltd.) and made a few key observations:

•  Early compliance checking helps avoid rework and speed time to market in product formulation and testing by ensuring product contents are acceptable early in the product development process
• Manual product compliance processes are slow, inneficient, and inhibits innovation by forcing key innovators to spend inordinate amounts of time looking up information and making it difficult for them to try new, innovative ideas quickly and with confidence

Given the need for early compliance checking and the potential for these checks to grind product innovation to a halt, companies appear to be between a rock and a hard place. The report goes on to discuss how real-time, automated compliance monitoring can help relieve the innovator of this compliance burden so they can focus on developing great products. This requires an infrastructure that:

• Provides knowledge of global compliance requirements
• Recognizes the full composition of their raw materials
• Understands the product formula as it is being designed
• Checks compliance real-time as the developer innovates
• Provides full, electronic documentation of compliance

There is more detail on each of these requirements in the report.

Implications for (Formula-Based) Manufacturers

For companies that develop and manufacture formula-based products, the compliance challenge will only grow. Government regulations and consumer sentiment will continue to push companies with greater scrutiny of their product contents, and restricted material lists will continue to grow. On the other hand, consumers will continue to reward innovate new products. In order to meet both demands, product developers must have the right tools to innovate rapidly, but with the comfort that there is a system behind them that will keep them out of compliance trouble.

So that was a quick peek into some recent research on making product compliance more efficient for product developrs in formula-based industries, 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.

A quick peek into some research on … the use of social computing and “Web 2.0″ techniques to enhance product collaboration. The report, Issue in Focus: Product Collaboration 2.0 - Using Social Computing Techniques to Create Corporate Social Networks not only discusses how social media and Internet-based technologies can improve product collaboration in corporate social networks, but also how manufacturers’ use of social computing allows them to capture and leverage the interactions as a new source of corporate product knowledge.

The Research Findings

One of the key messages of the report is that companies are starting to embrace social computing and “Web 2.0” capabilities to take advantage of social media for business purposes, creating “corporate social networks.” It is important for many companies to make a clear distinction between personal use of social media (Facebook, Twitter, MySpace, YouTube, etc.) and “real work” using social computing. While many large companies have shut down access to social media sites, these same concepts offer the ability for engineers, product developers, marketers, manufacturing resources, sourcing, and others in the product innovation process to share and contribute.

There are two primary threads to the research:

• Improving Collaboration – As reported in my previous post and research Going Social with Product Development, capabilities like presence detection and interactive file sharing help make existing collaborative processes better. This is particularly important to replace the day-to-day “water cooler” conversations that have disappeared in today’s globally dispersed, virtual organizations and support processes such as concurrent engineering. For example, manufacturers can create a virtual “community space” to give team members a central location for information. This collaboration extends beyond Engineering as well, and helps product developers include downstream considerations from Manufacturing, Purchasing, Quality, Service, and other departments early in the design process.
• Capturing Product Knowledge – Another key finding of the research is that as manufacturers adopt social computing in PLM, they are developing a digital record of the product development process. Decisions, discussions, false starts, brainstorms, and other interactions can now be captured and stored electronically. Using PLM, they can also be associated to the product and the project to form a permanent record of the process. By integrating this social interaction with search capabilities in PLM (see Unlock My Product Data! Business Intelligence in PLM), the potential to turn collaboration into a corporate asset is tremendous. Beyond capturing internal knowledge, corporate social networks can also be used to collaborate with suppliers and customers to gain better insights into the “voice of the customer,” capture requirements, and generate new product ideas - developing new knowledge and intellectual property (IP).

Implications for Manufacturers

There are significant business benefits to be unlocked by applying social computing techniques to product development. Manufacturers have an opportunity to improve collaboration inside and outside of the enterprise by leveraging these new techniques. After all, social computing is about sharing content within a community. Isn’t that what collaboration is all about? Sharing and getting feedback? And while the thought of using Facebook or Twitter to share your intellectual property may not sound that appealing (as we discussed in Flogging the Facebook for Product Development Horse), the same concepts are being applied to (and integrated with) PLM.  I believe that these capabilities will be a big part of product innovation moving forward, and that companies that get started sooner will have a big advantage over their peers. This is a new and exciting frontier, and we all need to explore and learn so we can tap the new potential ahead of the competition.

So that was a quick peek into some recent research on social computing and collaboration, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? What are your plans? Let us know what it looks like from your perspective.

And as always, 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 … 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.