Comments on: PLM vs. ERP – Don’t Manage Innovation!

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By: olegshilovitsky

olegshilovitsky — Mon, 03 May 2010 14:45:58 +0000

Jim, I agree with you. There is a shift towards understanding importance of PLM-ERP integration. It mostly comes from the standpoint of business values. And it comes to big companies first. In my view, cost is so high today, that few SMBs (including OEMs and Tier1) will be able to afford it. Thanks for commenting! Best, Oleg

By: Jim Brown

Jim Brown — Mon, 03 May 2010 13:15:29 +0000

Oleg,
Yes, the cost is the issue. Companies that have integrated other applications recognize that it can be costly to integrate, and also costly to maintain the custom integration through releases of each of the integrated applications.

But I have seen a shift in the priority of ERP-PLM integration, which I believe has three primary drivers:
- The use of ERP and PLM individually has matured, and manufacturers are more comfortable with each of these applications
- The pace of change has increased, making manual integration approaches like “sneaker-net” or “swivel-chair” integration more limiting
- Integration is getting easier from a technical perspective. It is still not trivial due to the need to align semantics and workflows (and yes, data ownership and flow), but the old days where we couldn’t even get the data extracted or couldn’t move it from one box to the other are largely behind us

So it is a cost-benefit analysis where the cost has dropped and the benefit has gone up. While that might not change the priority for everybody, it certainly has brought integration priority further up the list.

Jim

By: olegshilovitsky

olegshilovitsky — Mon, 03 May 2010 09:32:05 +0000

Jim, I think, the main point is the cost of PLM-ERP integration. With what is available on the market today, people will try to get one PLM+ERP in a single box. Does it make sense? I heard many times from customers: “PLM-ERP integration is so expensive, we’ll not build one this year….” Best, Oleg

By: olegshilovitsky

olegshilovitsky — Mon, 03 May 2010 09:02:43 +0000

Bruno, What you are saying, practically means – you cannot really integrate ERP with PLM with low cost (which is what SMBs are looking for). So, a single system is what need to be done for such cases. In my view, this is what SAP actually had in mind. They got wrong with implementation, in my view. Salesforce.com experience can be a good one when you think about the future of integrated PLM+ERP software for SMB. Another interesting vendor to watch in this “integrated space” is Workday with their integration on demand strategy. I agree with you- Integration is the king. You cannot innovate without that. Best, Oleg

By: olegshilovitsky

olegshilovitsky — Mon, 03 May 2010 08:55:15 +0000

Jim, thanks for your comment and link! In my view, the topic remains hot, because the integrated PLM and ERP today are still a more myth than reality. Practical implementations are relying on a significant amount of work that needs to be done in the company on the level of data and process management. Best, Oleg

By: Jim Brown

Jim Brown — Fri, 30 Apr 2010 14:18:13 +0000

Bruno,
I was surprised to see my old quote from you, although I think I said integration was the Queen. And I got in some trouble for that being a sexist remark anyway, so I don’t use that one very much any more.

Do you think the most likely source for a combined PLM-ERP (Innovation-Execution) solution is by extending PLM? Or extending ERP? It seems to me that the footprint of both is so big today that it would be hard to handle it via extensions. It seems more likely that either best-of-breed integration (pre-integrated by the vendors or a third party) is a more likely scenario. I have known some companies that try to do both, but are really more focused on Configuration Management than new product development, engineering, etc. Of course there are ERP vendors building / buying their way into PLM, such as SAP and Oracle (see http://tech-clarity.com/clarityonplm/2010/who-will-disrupt-entrenched-plm-vendors/). But those are probably not going to be the first choice for smaller manufacturers given cost/complexity.
I don’t see anything happening quickly other than a best-of-breed approach, and the development of integration from vendors. Are you aware of anything that is a combined solution today?
Thanks,
Jim