A quick peek into some research on cloud applications for PLM. The report, Issue in Focus: Assessing the Cloud PLM Opportunity: Evaluating the Benefits, Requirements, and Considerations provides insight into the benefits a cloud-based solution can offer. Cloud applications are proven in other enterprise solution areas, most notably CRM, and this paper shares lessons learned from them in order to help those evaluating whether cloud PLM is right for them.
The Research Findings
Cloud solutions aren’t new, but they are newer to PLM. As I mentioned in my previous post, A Time and a Reason to Talk Cloud PLM, there is a lot of activity and a number of viable cloud PLM solutions to consider. I have talked many times about the ROI of PLM, so this report really focuses on how to improve PLM ROI by reducing the cost of implementing and operating PLM. How is that done? There are a few key ways, each of which are discussed in detail in the paper:
- Leverage economies of scale – with a cloud solution, multiple companies share resources. This simply leads to greater efficiency of resources.
- Eliminate non-value added work – in addition to economies of scale (where work is done once and shared by many companies) there are actually tasks that no longer need to be accomplished at all in a cloud environment.
There are also other benefits discussed, including the ability to take advantage of cloud level systems performance. Let’s face it, the top notch database and security experts are expensive. I used to joke with a small manufacturing client of mine that the best technical experts cost more than their CEO makes. It would have been more funny if it wasn’t true, I think. But the point is that when you leverage those resources across multiple companies they become affordable. The report also discussed the importance of increased flexibility, better corporate agility, and reduced business risk that come from paying subscriptions instead of licenses. A clever lease agreement can help with that, but it is really not the same as subscription / software as a service (SaaS).
The report also points out a couple of concerns and considerations. It’s surprising to some that I don’t see security as a bigger risk in cloud, but perhaps that is just because I know how challenges many manufacturers are to keep up with it on their own. I do think there are issues about data ownership and integration that need to be considered before jumping into cloud PLM. But again, markets like CRM have gone ahead of ours and have come up with solutions to many of the concerns companies have with cloud.
Implications for Manufacturers
As I said in my previous post, it is time to take a look at cloud PLM. I hope that this paper offers some advice that can help companies with their decision-making process. But the report offers two important pieces of advice:
- Understand what is required from solutions and vendor business models to provide cloud benefits in a sustainable way
- Don’t assume everyone’s “cloud” solution meets the requirements or provides the same benefits
Just become someone says they have a “cloud” solution doesn’t mean they do. Like any good buzzword, it is being misapplied and misconstrued. Understand what cloud means, understand what it takes to provide it, and then evaluate solutions based on whether they have what it takes to deliver the benefits. The key is that cloud solutions reduce the total cost for the vendor to deliver PLM as well as the manufacturers’ cost to run it. If total cost isn’t taken out somehow, then any “cloud” cost savings are not sustainable and will eventually come back to the customer. And I hope it’s obvious, but make sure the solution has the functionality you need too. A less expensive solution that doesn’t offer a return doesn’t really help with an ROI!
So that was a quick peek into some recent research on PLM and “the Cloud,” 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.