Clarity on PLM

A quick peek into some research (and some “mythbusting”) on a post by Christopher Null on Yahoo News titled “Facebook and business don’t necessarily mix.” Great, catchy headline. But does it really reflect the underlying research from MIT? I don’t think so. I will also share some comments posted on the PDMA blog from a study by Kalypso that don’t sync up with the commentary. And, I will provide an opportunity for you to speak your mind by participating in a current research study on social media and product innovation.

Commentary and Reactions

I don’t know the author of the post, but when I read it something didn’t sit right with me. For the most part, maybe it was that the title of the post didn’t match the underlying premise. To be fair, I know that some editorial gets “help” with their titles to grab attention (which this one certainly did, at least to me). But here are my thoughts (and feel free to “bust” them yourself, I realize I don’t own all the right answers).

Facebook and Business Don’t Necessarily Mix (Busted) – OK, I know I am picking on the title. But let’s own up to two realities:

1. You don’t have a choice. People on social networks are going to talk about your products. Whether you initiate the conversations or someone else does (customers or competitors), it is going to happen. As the post in PDMA ”Do you use social media in innovation?” points out, Social media on your terms is a much better idea than letting others take control of it for you. You MUST get ahead of this.

2. This isn’t what the MIT research says. The post Mr. Null references, “Pitch may fail on Facebook – Study: Social media don’t always create good buzz“, is much more aptly titled. What is says is that buzz can be positive or negative, and that it can actually hurt sales. According to the Boston Herald blog, the research (which I haven’t read, and is not published yet as far as I know) quotes the author as saying that “found that online buzz only helps when new products are at least half as good as consumers expected.” Now that is interesting! The author, P.J. Lamberson, an MIT Sloan School of Management visiting assistant professor, is said to use math to study large networks.

“Conventional Wisdom” (Plausible) – Mr. Null starts his article with “conventional wisdom now holds that if you want to have a successful product launch, you need to exploit Facebook, Twitter, and MySpace to get the word out about your product.” Is this really conventional wisdom? Are most companies using social media today? My experience says no, but I could be wrong. I will admit, my focus is more on social computing for product innovation, product development, and engineering (PLM) and not product launch. But my experience says that companies are experimenting with the use of social media, but it is far from standard operating procedure. The only evidence I have is from some preliminary results from the study being run by Kalypso (Disclosure: I am helping them run the study) that indicates that the use of social networking and social computing in product launches is still not fully developed. In fact, only about 1/2 of companies are using social media for product launch. Further, companies that are using social media are only using it on a small percentage of their initiatives. In other words, we are very early in the use of social media, and it is far from conventional wisdom. On the other hand, the preliminary results show that about 90% of companies that are using social media for innovation are planning to increase usage next year, with none indicating they were reducing it.  Why is this Plausible and not Busted? The research is not done – please participate in the survey and I will share results back with you via the blog.

Bottom Line (Busted) – After being generous with the last mark, I was fully planning to Confirm the post’s bottom line. Then I read it again to copy it here, and I disagree. “The bottom line is simple: Viral marketing, in which a conversation about a product is actively encouraged, can turn good or bad in ways that traditional marketing and advertising typically cannot. Unless a business pays careful attention to the tone of that conversation, the company could find itself shelling out millions on a viral ad campaign, only to have the unwanted effect of decreasing sales instead of increasing them.” I copied the whole comment over, because I agree with the first part. Yes, viral marketing can turn bad. But then it says business need to pay attention to the tone of the conversation. The underlying study (from what I can see) doesn’t say that. It says that your products have to meet expectations. In other words, it’s saying you can’t just manage the tone because it is out of your control.

Implications for Manufacturers
So what should manufacturers do? Learn from the study. What I hear is don’t over-hype your products, and don’t try to push a bad product through social media. It seems to me the harder you push how great a product is, the more likely you are to get dissenting view from customers. The study doesn’t say your product has to be good, it just has to meet expectations at least half-way.

Continue to experiment and learn. Social media is changing the way we interact with products. Be a part of the change and experiment. The last bit or preliminary data I will share from the Kalypso study is that those that are doing it are seeing business benefits (revenue, time to market, reduced cost). This is real, get on it.

So that was a quick peek into some recent research on social networking and business, 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 free research and white papers about product innovation and product development from Tech-Clarity.

What I learned this week … was a retrospective look at an article analyzing how industry-specific PLM application are. The review was in response to a comment on my post In Search of a Common PLM Definition. I had a little bit of fun with the review, and I thought I would share it here. In fairness to Oleg, I decided to use my “mythbusting” technique that I used on him earlier in the year in Mythbusing ERP-PLM Integration.

Responses and Reactions

Need to Document and Prioritize PLM Requirements (Confirmed) - I start by saying companies should document and prioritize requirements. I believe that holds as true today as ever. And I think that you might agree, so let’s confirm that as a statement that holds up today.

Inegrating PLM to Manufacturing (Plausible) - I use “technology transfer” as an example of a very industry-specific part of PLM. For those that aren’t as familiar with the term, it is effectively translating the product as defined in engineering / R&D (and PLM) into a product that can be produced, up to and including instructions for automated plant equipment. This is an area that really hasn’t come to be in most PLM solutions. The example holds trues as industry specific, but despite efforts in Digital Manufacturing (DM) and Manufacturing Process Management (MPM) - most manufacturers are still not yet integrating PLM to plant solutions like Manufacturing Execution Systems (MES) or Manufacturing Operations Management (MOM). The opportunity is still compelling, but I thought we would be further ahead. Hats off to my old friends at Sequencia for being ahead of the curve.

Product Portfolio Management in PLM (Confirmed) - I use Product Portfolio Management as an example for a general solution. I think this one still stands true, and is a hot topic in product innovation and product development today.

My Bio (BUSTED, big time) - Most importantly, what was I thinking with that bio picture? I think I thought it made me look like a serious analyst. Instead, I just look like I have a stomach ache (and seriously need a haircut). Yikes. Busted. Definately.

So that is a brief look at some old research with the benefits of hindsight, I hope you found it interesting. Who knew? I didn’t, if you did let us know about it. I look forward to additional commentary (although not on the picture, the glasses, or the haircut please).

NOTE: I use the “mythbusting” concept out of pure admiration and respect for such a brilliant concept, that helps kids (and adults) learn about how cool engineering can be while entertaining them.

A quick peek into some research on … the adoption of Enterprise 2.0 technologies. The report, The State of Enterprise Adoption Q4 2009, is an interesting read from the “2.0 Adoption Council.” The analysis is brief, but the insights are strong and the authors promise more detail in the future. My first introduction to the research came from a blog post on ReadWrite Enterprise titled Enterprise 2.0: Study Shows Adoption is Real with a strong statement that “Manufacturing Has Surprising High Adoption.”

State of Enterprise 2.0 Adoption

I would suggest reading the underlying research, because (as you will see below) I have a different interpretation of the results. But with my high level of interest in Social Computing in Product Development and PLM I do see some positive signs from the study. Thanks to Oleg for his Enterprise 2.0 Adoption and Social PLM post which pointed me to a blog (and then subsequently to the underlying research). I have a slightly different take on the implications of the findings, but that may be because research is frequently left open for some level of interpretation. Regardless, we both agree that things are moving in a positive direction in regards to PLM and social computing.

The Research Findings

As always, I encourage you to read the study. The report clearly shows that participants are adopting “Enterprise 2.0.” The report itself does not provide a definition of Enterprise 2.0, but because the participants were pre-qualified I assume they have a good understanding. For the rest of us, here is a definition we can use that I took from Wikepedia:

Enterprise social software (also known as or regarded as a major component of Enterprise 2.0), comprises social software as used in “enterprise” (business/commercial) contexts. It includes social and networked modifications to corporate intranets and other classic software platforms used by large companies to organize their communication.

The report shows that the majority of survey participants still see Enterprise 2.0 in the stages of early adoption. But in their own companies, there are typically multiple projects going on. This to me indicates that there will clearly be leaders and laggards in the adoption of social computing techniques in the enterprise. This is where companies will be able to differentiate themselves and gain advantage over their competition.

Manufacturing is well represented in the survey respondents, but I wouldn’t read too much into that. The industry chart just shows the participants in the research, and the fact that 15 companies out of 77 that took the survey describe themselves as “high tech” and 7 describe themselves as “manufacturing” doesn’t really point to a larger trend that manufacturing is leading in social computing. What I do find interesting is the anecdotal comments in the report that “It is heartening to see that a drive to improve collaboration has taken hold in an industry (manufacturing) which is notoriously difficult to change rapidly” and “… our manufacturing members express the most frustration with introducing change.” This clearly reflects the conversations I have been having with manufacturers.

Implications for Manufacturers

So what does this mean for manufacturers? As much as I would love to jump to the conclusion that social computing is booming, I interpret this differently. I see this as:

• Manufacturers are very interested in social computing
• The early adopters are hard at work figuring it out
• Progress has been cautious (for the most part)

My beliefs on how manufacturers will adopt social computing in product development has not changed:

• Most manufacturers will start with the low-hanging fruit of improving collaboration, and most will start internally
• Manufacturers will be more likely to adopt social computing techniques when they are incorporated into applications they trust such as PLM, which will protect their intellectual property (IP)
• There will be significant value gained by those manufacturers that adopt social computing to improve product innovation, product development, and engineering performance

This study offers some good validation that some thought-leading manufacturers are moving towards Enterprise 2.0. I wouldn’t read too much into it in regards to a general trend, but there is clearly something going on that manufacturers need to learn about and start experimenting with.

So that was a quick peek into some recent research on the adoption of Enterprise 2.0, 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 from Tech-Clarity.

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.

A quick peek into some research on … the respective roles that ERP and PLM play in product innovation. This is not brand new research, but I believe it is just as relevant today as when I initially wrote this almost 5 years ago. Why? Not much has changed – with a couple of notable exceptions (SAP and Oracle). I find myself coming back to this topic on a regular basis, and I am starting to do some research in this area again so I thought I would bring this one back to the surface. It also offers some insight that might be helpful for a recent discussion on PLMTwine that touches on the importance of integrating PLM with ERP.

The Research
The research identified two clear and distinct sets of business processes that companies use to drive product
profitability. These two sets of processes include:

• The Innovation Cycle – characterized by rapid iteration
• The Execution Cycle – characterize by a more linear, repeatable process

These cycles are different, and require different solutions. PLM and ERP were developed – and have since evolved – to meet the needs of each of these cycles. Is there overlap? You bet. Processes like engineering change are consistent challenges to coordinate between these two meta-processes. But for most companies, there is
a clear hand-off point where a design is released to manufacturing (and external suppliers, for that matter)
where ERP takes over.

Below is a table extracted from the research that helps to show the differences between ERP and PLM. These differences are what make each the best solution for their respective set of processes – execution or innovation.

Updating the Viewpoint
So what would I change now that five years have passed? Not much. One other interesting fact from the research (and confirmed by a later benchmark I conducted at Aberdeen Group) is that most companies would really rather have one enterprise solution that covers all of their innovation and execution needs. Unfortunately, at the time none existed. I would love to say that five years later that had changed drastically, but it has not. What has changed? The desire for an integrated solution clearly has not changed, but:

• PLM vendors such as Dassault Systemes, PTC and in particular Siemens PLM have progressed their integration to ERP, focusing mainly on SAP due to it’s market prominence in ERP
• Oracle acquired Agile, giving them a PLM solution (two actually, including Prodika) that will be further integrated with Oracle ERP over time, but is also being sold into other ERP environments (again, including SAP)
• SAP has announced and is progressing on their own SAP PLM roadmap (Update: Look for a One to One on SAP PLM in the near future, we have just had a good conversation with the SAP PLM team about their progress)

Having said that, none of the above are clearly differentiated enough to serve as the “one integrated
answer” that many companies are looking for. So for now, the best solution is likely a hybrid of ERP, potentially some PLM from you ERP vendor, some best of breed PLM suite solutions, and some best of breed point PLM solutions. Sorry, I wish there were a cleaner answer than this.

So that was a quick peek into some recent research on the roles of ERP and PLM. 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.

A quick peek into some Tech-Clarity research on … Innovating Through an Economic Downturn points out the importance of innovation so that smaller manufacturers can survive in the current, global economic crisis. The paper is intended to help companies develop an action plan that both recognizes the difficult reality that most manufacturers face today, and allows them to continue to invest in the future. This research complements earlier Tech-Clarity research focused on Engineering’s Role in Surviving a Down Economy, focusing on the implications for small to mid-size businesses (SMB).

The Research
The research includes interviews with three manufacturers, highlighting the challenges they faced during difficult economic times and the approaches they took to live to fight another day. The research points out that small to mid-size manufacturers have to make difficult trade-offs between product innovation and cost control, but that companies that continue to invest in innovation will fare better during the economic downturn and beyond.

The research identified three strategic approaches that companies have adopted during their downturns:

• Product (and Market) Innovation – Companies can’t afford to stop innovating. While some companies might be tempted to go into a pure sustaining engineering mode (putting the brakes on new product development), it is important for companies to continue to move key innovations forward to be prepared when market conditions improve.
• Reductive Innovation (innovation to reduce cost) - Small to mid-sized manufacturers are often caught in a pinch during economic downturns, having to offer price concessions to customers while simultaneously experiencing weaker product demand. This double-impact on their top lines means that they need to reduce cost in order to maintain profitability. Product innovation can be applied to cost reduction by reducing product or manufacturing costs. Many companies recognize that a down market is a good excuse to go back to correct over-designed or suboptimal designs that were acceptable during the good times.
• Process Innovation- Perhaps one of the major improvements can come from process innovation. Many innovative ideas are product lifecycle related and impact the efficiency of developing and managing products. By improving the efficiency of product innovation and product development, smaller manufacturers can afford to spend more of their limited resources on developing winning products.

These approaches were supported by product lifecycle management (PLM) solutions, which can support each of these three strategies. PLM, in fact, often helps companies achieve these three strategic objectives simultaneously – leading to improvements in both top-line revenue and bottom-line profitability.

My Thoughts
The three manufacturers interviewed helped crystallize a key fact – companies facing difficult times must act. By turning to innovation, these companies were able to survive their difficult times. In each case, the use of PLM technology helped to enable this innovation, providing the support required to continue to innovate despite limited resources. PLM helped them to put in place better processes that helped them survive the downturn, but also left them in a stronger competitive position during their recovery. PLM is unique among enterprise applications because of the dual role it can play in increasing revenue and decreasing cost – a compelling opportunity for SMBs in troubled times.

Implications for Manufacturers
The implications are clear. Small to mid-size manufacturers need to act despite difficult economic times. Now that the economy appears to have stabalized, it is time for companies to develop a PLM and innovation strategy to set themselves up for short-term and long-term success.

This research highlighted the experiences of three ENOVIA SmarTeam customers. Look for more information on the Enovia SmarTeam solution in an upcoming “One to One” post later this week.

So that was a quick peek into some recent research on innovating to combat difficult times, 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.

A quick peek into some research on … social computing in PLM that I am currently working on. I had the opportunity to lead a discussion at COFES (Congress for the Future of Engineering Software) this morning on the use of social networking in design and engineering. I am just starting my research project for a paper, so the timing was very good to start the discussion. I will share my key takeaways from the conversation with you now, and of course post a link to the paper when it is ready.

The Research
Instead of going into detail on what I am looking into, I will point to a number of my recent blog posts on the topic. They should give you a good idea about my views on the topic:

How Does Social Computing in PLM Help Collaboration?
Why Social Networking in PLM is More than Just Collaboration
What I Learned: Why Social Networking in PLM is a (Really) Bad Idea 
(hint) You might want to read the last one and not just take the title for face value.

My Takeaways from Today
The primary surprise take away from my session was the level of interest in the topic. Manufacturers, vendors, consultants, and other analysts all attended and contributed to the discussion. I believe we are early in the maturity curve in our use of these technologies, and that the high level of interest shows that people are getting a glimpse that something very important is happening here. They are starting to see what I have believed for some time – that the use of these technologies is coming and that it is inevitable. Our youngest participant said what I think we all know, “this is just how we communicate these days.” Using these tools is as common to those his age as using the telephone was to me (land line, living through the “new technology” of push buttons vs. rotary dialing in my case).

The interest came from believers and from those that don’t see it, or perhaps don’t want it. It was great to hear both sides. It is clear that there are concerns about security, and that there are (legitimate) concerns that these technologies will just add more information and communication to an already cluttered landscape. Those that had been using the technology longest, though, believed that the use of the technology would settle in to a workable level over time, and that the solutions would find their place along with other forms of communication technology.

What does this mean? When there is a packed room full of a combination of supporters, detractors, and those that just want to be educated – that is the smoke that says there is a fire burning. There is something new happening that is exciting and promising. It will mean change. Some will embrace it and others will fight it. Some might want to adopt it while the corporate antibodies try to fight it. There is still a lot to learn as we find out where this will provide value and how, but the interest level is very high.

Implications for Manufacturers
I will keep this brief, because there are other sessions I want to attend to learn from others in the great network of individuals that are physically here at COFES:

• Social computing in PLM is a real and compelling
• The intersection of social computing and engineering is happening – although slowly
• There is a lot of potential value
• There are a lot of potential barriers
• Social computing is not just for the younger generation (although they are more likely to just expect it)
• As an industry, we are very early in the maturity of our vision to use these technologies, we have a lot of experimentation left before there is an accepted “best practice” approach

My favorite takeaway comes in the form of a quote from one of the participants. He correctly pointed out that “the network that you build is an asset.” I couldn’t agree more.

So that was a quick peek into some of my current research on social computing in PLM, 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.