Mythbusting ERP-PLM Integration

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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.