What Oracle Results Mean for PLM vendors?

March 29, 2013

For many years the business model of CAD, PDM and later PLM vendors was structured as high upfront license combined with continues maintenance payments. The same is true for many other enterprise software vendors. PLM vendors built their businesses around expensive licenses sell covering significant sales cycle cost and even pilot implementations. The majority of PLM software is running on top of relational databases (RDBMS) licensed from big 3 vendors – Oracle, Microsoft and IBM. Back in 2010, I posted Faltered licenses and future PLM business models. 3 years ago it sounded as something that will never happen to enterprise software. However, things are going differently in 2013. Navigate to ReadWrite Enterprise article Oracle big miss and the end of an enterprise era. The author, Matt Asay, VP of 10gen, the outfit behind noSQL open source database MongoDB is clearly biased with the disruptive ideas and business models coming to the enterprise space. Even so, some of his assumptions in the article resonated. One of the key points – Changing the way how vendors get paid. He doesn’t see the problem of bad sales execution, but a fundamental shift in technology and product landscape. Here is my favorite passage:

This isn’t just a matter of improving legacy software products. It’s a matter of fundamentally changing how these legacy vendors deploy and charge for software. For example, Oracle’s entire cost structure is built around the premise of a hefty upfront license and high-margin maintenance (Over 20% of the license fee). We believe the primary issue is a fundamental shift in the technology landscape away from legacy systems towards a new breed of better products at a lower cost both in Apps and in Data Management. Virtually every emerging software trend is having a deflationary impact on spend.

Another aspect of disruption is related to developer communities. Software developers and CIOs of enterprise companies are looking for technological platforms. They don’t like the idea of expensive licenses and approvals of enterprise vendors to develop software on top of their platforms. As a result of that, they are turning to open source as an option to have their “platform of choice”. Here is a interesting quote:

With the rise of open source…developers could for the first time assemble an infrastructure from the same pieces that industry titans like Google used to build their businesses — only at no cost, without seeking permission from anyone. For the first time, developers could route around traditional procurement with ease. With usage thus effectively decoupled from commercial licensing, patterns of technology adoption began to shift…. Open source is increasingly the default mode of software development….In new market categories, open source is the rule, proprietary software the exception. The top-down approach, in other words, is losing its currency within the enterprise, as both open source and cloud enable developers (not to mention line of business executives) to get work done without getting permission.

So, getting back to future PLM business models and ways to disrupt PLM today, what does it mean for PLM vendors? I want to outline 3 main points:

1 – Alternative business models.

Customers are looking for alternatives to existing PLM licensing models. The biggest conflict here is between high cost of lucrative PLM licenses and interests of PLM vendors to take PLM software upstream and downstream in the organization in order to increase usage. However, adoption speed of PLM software is low. High cost of additional licenses is one of the factors preventing customers to expand the usage of PLM software. PLM vendors need to think how to provide flexible portfolios with options allowing to customers to spread PLM systems and technologies across the enterprise.

2 – Diversify revenues and activities

PLM vendors need to learn from the past of IBM and some other vendors. Years ago, IBM reshaped their business from software licenses to services and consultancy. IBM was extremely successful in this change. We can see how existing enterprise software vendors (Oracle, Microsoft, SAP, etc.) are trying to diversify their activities by providing new services and solutions. PLM vendors might be taking a similar path in the future.

3 – Pay attention to open source disruption

Open source is disruptive. Period. It is very hard to compete with free software and good technologies that can be used to develop solutions. Mainstream web is running on top of open source technology foundation. New generation of developers are coming with a significant baggage of knowledge and experience in this space. PLM vendors, system integrators and service providers need to take a note, until it will be late. You future competitors are developing from Starbucks shop next to your office.

What is my conclusion? I think, Oracle miss is a big alert sign to PLM companies. Changes are coming. It will come from customers that will be looking for alternative business models, from developers that cannot tolerate an expensive infrastructure and from technological vendors that will propose alternatives to expense PLM infrastructure. All together it will move PLM industry towards new horizons. PLM vendors need to take a note. Just my thought…

Best, Oleg

Thoughts about PLM whitepapers and PLM processes

March 28, 2013

Are you reading whitepapers these days? Hmm… Not much you can say, probably. I’m reading blogs, twitter streams and use Flipboard app. I think, whitepapers are getting into a crisis similar to publishing industry. It is not as popular as IBM Redbooks 10 years ago. PLM whitepapers are interesting in particular. Very often, whitepapers are sponsored by vendors and, as a result of this, lose their attractiveness. You still can learn from them, but the scale is limited by the commitment of an author to a specific vendor(s). Another class of whitepapers are presenting research made by analyst or research firm. These whitepapers are interesting from the standpoint of learning data, but also can be limited.

I’ve been reading Razorleaf’s whitepaper Achievable PLM by Jonathan Scott. The following link will give you an access to the whitepaper in exchange of your email and phone number. Razorleaf is a business outfit focusing on PLM services without much focus on what vendor, product, technology to use. Take few minutes coming weekend and read the whitepaper. I found the following part of the whitepaper the most important to me. It helps customers to identify company and product development processes to be supported by a PLM system. It defines 3 main processes that you can find almost in every manufacturing company – NPD / NDPI, ECO/ECN/ECR and CM/BOM. Here is the passage from whitepaper:

Do you have a process for dreaming up new products and turning them into something that can be made? Formally, some people call this New Product Development & Introduction (NPD or NPDI).

Do you have a process for changing the design of existing products to fix problems that you or your customers discover, and to improve your product so that more people will buy it? Many people call this Engineering Change Management (ECx) and there can be numerous subprocesses like Engineering Change Request (ECR), Engineering Change Order (ECO), and Engineering Change Notification (ECN).

Do you have a process for describing the “recipe” for your product, the list of ingredients/components that go together to make up your product? People in defense -related industries have been calling this Configuration Management (CM) for years, but a lot of other industries think of it as Bill-Of-Material (BOM) Management.

It made me think about new type of PLM whitepapers focusing on helping customers to identify their product development processes. That would be a different set of whitepapers. Think about that as a collection of process recipes. One size doesn’t fit all when it comes to processes related to product development in manufacturing companies. To have multiple options and viewpoints could be very beneficial if you are implementing PLM.

What is my conclusion? Content is a critical element these days. Whitepaper is an important type of content, in my view. You need to have a good content to drive attention. It seems to me, a good PLM whitepapers can play two important roles – drive traffic to the websites of PLM vendors and service providers, but most importantly – to change the way customer perceive PLM implementations by providing practical information and guidance about PLM-related processes. Just my thoughts…

Best, Oleg

PLM, Social Apps and How to Design Next Airplane on the Facebook?

March 27, 2013

The conversation about social software is getting more mature these days. Do you remember early period of "social software" talks. Navigate to the following link – We are not going to design an airplane on the Facebook! The discussion on Jim Brown’s blog is 3 years old. Jim brings his pros and cons of having Facebook as a platform for product development. Even if the title of blog post didn’t provide much chance to Facebook to be used in product development, I captured some pros. Here is an interesting passage -

It is hard to get people to work together effectively. It takes a lot of different skills (technical, marketing, financial, etc.) to bring a profitable product to market. And beneath those classifications, there are more sub-skills. In the technical domain there are designers, engineers, validation/analysis people, compliance experts, manufacturing resources and quality personnel. Down another level inside engineering, many products require mechanical engineers, electrical engineers, and software engineers. You get the point – there are a lot of skills (and therefor people) involved. This is true for even simple products, let alone an airplane. If the fundamental truth is that it is hard to keep all of these people informed and working together – and you believe there is value in improving it – how can social computing in PLM be anything but inevitable?

Now, let’s go 3 years forward. We can see major enterprise vendors such as Microsoft and Salesforce.com are applying social applications as a major communication paradigm that will be used for their Office 365 and Salesforce.com CRM apps. Couple of articles I captured earlier this week. Navigate to SharePoint blog post – Yammer and SharePoint: Enterprise social roadmap update. Microsoft acquired Yammer for $1.2B earlier last year. Currently Microsoft is embedding Yammer social tools to replace Office 365 newsfeed. Future integration options are including co-editing of Office documents.

Customers will still have the option of choosing between Yammer and the SharePoint newsfeed, but this new, integrated Yammer experience will offer Single Sign-On (SSO) and seamless navigation. In other words, when you click on the Yammer link in the Office 365 global navigation bar, Yammer will appear immediately below with the navigation to get back to Office 365 services such as Outlook and Sites. You will also see the user experiences of Yammer and Office 365 begin to converge (see the concept mock below to get a directional sense). This new Yammer experience will also offer rich document capabilities, integrating the Office Web Apps to add editing and co-editing of Word, PowerPoint, and Excel documents.


Another example – Salesforce.com Chatter app. Salesforce.com introduced chatter back in 2010. Since then the application becomes more visible and dominant in Saleforce user experience. Earlier last week CEO Marc Benioff Says Chatter Will Become Primary Interface For Salesforce. Salesforce unveiled Chatter 8.0, which executives said is the next generation CRM.

Benioff, speaking in Boston, provided his usual context for discussing Salesforce. He talked about the rise of mobile; how people are connecting and the rise of Twitter and Facebook. He then used that framing as a transition to say how Chatter, an activity stream platform, is becoming the primary interface into Salesforce. He called it a significant step that other companies will follow.

Activity stream paradigm is clearly taking off as a new way to communicate between people. I compared it to old "file explorer" paradigm we used last 30+ years everywhere. Navigate to my blog post from the last week to read more. To me activity stream paradigm will take us from old desktop world to future world of cloud and connected services.

What is my conclusion? PLM industry is starting to put more attention to user experience. It becomes an issue for individuals small companies and large corporations like Boeing. Activity stream is a new paradigm taking roots in social networks to bring a new style of communication and information sharing. Watch this move that will happen among all companies in the next 2-3 years. Just my thoughts…

Best, Oleg

PLM Cloud and Open Source Coopetition

March 25, 2013

I want to continue the theme of disruption started in my post last week. I can see two major forces that will disrupt traditional PLM approach nowadays – cloud and open source. Both have some strong position points and some weaknesses. I put some of my thoughts about cloud and open source disruption last year – PLM cloud and open source disruptive trajectories. I want to get back to this topic. I was reading TechCrunch article- Oracle Is Bleeding At The Hands Of Database Rivals. Read the article. It clearly influenced by recent Oracle financial results announcement. Nevertheless, I found some facts and opinions there very important and interesting. Here is my favorite passage:

Until this past week, the extent of Oracle’s problems were not known. But there is a cut, a slight bleeding that’s now visible. But how deep is the cut? How much is Oracle really bleeding? That’s exactly the question analysts asked in a Reuters story after the earnings results: “Data base revenue, which has been the cash machine of the company, has changed. There are now alternative databases, as well as the cloud,” said Mark Moerdler, an analyst at Bernstein Research. “That pressure is still a tiny bleed, but it is out there and the question is – is it bigger than we think it is?”

Another interesting case built around solutions and databases built on top of open source. One of them mentioned in the article is Datastax – outfit providing solutions based on open source database Casandra. Here is the quote:

Oracle reported this week that new software licenses are down two percent. And that decline is in part reflected by the adoption of NoSQL databases offered by Datastax and a variety of other services that use in-memory technology at the database layer. The reason for the drop has more to do with the enterprise acceptance of online applications more than anything else, said Datatastax CEO Billy Bosworth in an interview last week. That’s the truth. NEA Ventures Scott Sandell said to me at SXSW that CIOs are convinced to move their workloads but cloud security is still an issue. That’s where companies like Datastax enter the picture. Datastax is built on Cassandra, a high performance Apache open-source database technology with security at its core.

TechCrunch’s article made me think about influence of open source and cloud solutions in PLM market and the potential to provide solution alternatives to customers looking how to get a different PLM implementations. I can see many customers are moving to the cloud. A particular segment of customers might be interesting to find an alternative, but still struggle with the justification of their security procedures can be changed to adopt open source solutions that can provide them alternative licensing models and optimized cost. However, the most interesting is a combination of both approaches. Even if open source and cloud might sounds as orthogonal approach, business combination can be interesting.

What is my conclusion? It is an interesting time in enterprise and PLM market specifically these days. Changes are coming from all directions. Technological disruption and new business models are coming across interests of customers to find alternatives to existing PLM solutions. The primary focus of customers is flexible solution, fast ROI and reliable solution framework for the future. The coopetition of cloud and open source can play an interesting role and become a game changing factor. Just my thoughts…

Best, Oleg

Mobile PLM and BaaS

March 22, 2013

I learned a new buzzword yesterday. Have you heard about BaaS? Navigate to the following TechCrunch article – Kinvey Launches Enterprise Back-End Service For Building Mobile Apps That Move Data From Salesforce, Oracle And Other Sources. Kinvey is a startup that put a mission to scrap data from enterprise backend systems and make it available for cloud and mobile applications. Here is an interesting passage:

The new Kinvey For Enterprise back-end as a service (BaaS) platform allows developers to build mobile apps that can authenticate users and securely read, edit and publish data to and from enterprise data sources, such as Salesforce.com CRM and Oracle. Before, middleware ran inside the data center, often on proprietary software that locked customers into one vendor. Data now needs to pass freely between data centers and public cloud services across any number of applications. In these “heterogeneous,” environments, mobile apps changing everything. A company may use Sharepoint and Salesforce.com. To get that data into one mobile app they can’t rely solely on the provider’s API. They need a mobile SDK to get that data and feed it into the app.

It made me think about data problem many manufacturing companies are experiencing these days. The typical environment of enterprise company is heterogeneous- many existing systems, databases, files and other sources of information. Very often, companies are implementing PLM to scrap all existing data in the product development, manufacturing, supply chain and move it to a brand new PLM system. While it turns as a very beneficial project, it usually very expensive and time consuming.

In parallel to that we have a very strong mobile trend these days. The population of mobile workers is growing. According to IDC study, the number of mobile workers will reach 1.3B. It is a big number that will establish a huge demand for mobile applications.


The ideas of BaaS are interesting. The question of cost remains open for me.

What is my conclusion? Mobile is a next big thing that will happen to enterprise companies. Today, it is mostly limited to email. Can you imagine your business and professional life without mobile email today? I don’t think so. The next step is to make other data in the company “mobile and transparent”. I don’t know if BaaS is an ultimate way to solve the problem. However, the potential to do that is huge. Just my thoughts…

Best, Oleg

3 ways to disrupt PLM today

March 22, 2013

Disruptive innovation, technologies, products, services… I think we like the word "disruption" these days. This is such a tasteful and colored word. It can provide a new look to anything that goes afterwards. So, let me see if I can put a disruptive color on PLM. I’ve been reading Jos Voskuil blog – PLM at risk–it does not have a single, clear job!

Jos was taking on a main reason why PLM is so vulnerable to disruption – PLM role is not well defined. Here is an important passage from his post:

Recently, I attended an HBR Webinar “Innovating over the Horizon: How to Survive Disruption and Thrive” , which raises serious implications for PLM. As presented by Clayton Christensen and Max Wessel, both professors in the Harvard Business School, I foresaw numerous consequences demanding attention. I’d like to highlight some observations for you: 1/ Disruptive innovation will hit any domain – so also the PLM domain; 2/ You are less impacted if your products/services are targeting a job to be done; 3/ ERP has a well defined job – so not much discussion there; 4/ PLM does not have a clear job – so vulnerable for disruption; 5/ Will PLM disappear.

Jos’ post made me think about PLM and disruptive innovation. It took me back to to my post last year – PLM: Cloud and Open Source Disruptive Trajectories. I wanted to identify three main directions that can help companies to innovate and disrupt PLM these days. Here they are complexity elimination, crossing technological barriers and significant cost saving. Let me speak about each of them separately.

1. Same functionality, but eliminate complexity

Do we need more functionality? Probably yes. However, even large customers like Boeing are questing more usability these days and not more functionality. Usability is a hard problem. It requires lots of time, dedication and fine tuning during the development. However, it pays off in full. To focus on how to eliminate complexity can be very disruptive by delivery new generation of PLM products.

2. Break technological barriers

Technology is changing fast. What was impossible 5 years ago, today becomes a mainstream. Lots of PLM products today were developed by technologies of 1990s. Internet technologies applied to PLM field can provide a lot of interesting options – visualization, social networking, augment reality, 3D printing, data analytics – this is only a short list of possibilities.

3. Alternative business models

Last, but not least way for potential disruption. Business models. Think about alternative cost models, rents, services, advertising, crowdsourcing, open source, etc. The traditional way to sell software won’t go away. However, customers are intensively looking how to pay less. Companies that will succeed to find a new way to innovate with business models can get be successful in the next decade.

What is my conclusion? Enterprise software is an interesting place these days. Lots of things was unchanged for many years. The critical mass of product innovation, technological changes and business alternatives are under way to create a disruptive wave of next PLM technologies. Just my thoughts…

Best, Oleg

Social PLM: From File Explorer to Activity Streams

March 20, 2013

Social hype is getting down. I can say it about PLM industry too. We can see less “social startups” and less marketing hype about how next big social revolution will come and solve all existing problems in PLM technologies and systems. If you want to catch up with my previous thoughts about social PLM, I recommend you to read – How to prevent social PLM from marketing fluff? and Why Social PLM 1.0 Failed? My conclusion about the failure of Social PLM focused on the fact “social PLMs” missed the value of customer function and instead of that, focused on value proposition only. As a result of that, they missed usage and customer adoption – two factors that absolutely important to make a shift in PLM systems.

It is interesting to see how social systems are expanding their influence in other enterprise systems like CRM and ERP. One of them is Chatter for Salesforce.com. I’ve been reading TechCrunch article about Chatter update for mobile yesterday. Navigate to the following link to read it – The New Salesforce.com CRM Platform Is Chatter And It’s Made For Mobile. What was interesting is how Chatter is proliferating to become a universal way to get information out of CRM system and communicate with other people. It made me think about social system and shifting paradigm from File Explorer way to Social way. Here is an interesting passage I captured:

Chatter, the company’s activity stream service that it launched in 2010, now has the capability for a customer to access records, edit them and take action on an account, all from a mobile device. It essentially brings CRM to the customer’s mobile phone, iPad or tablet. The updated app is now available in the Apple App Store and Google Play. The app is a significant improvement over the Salesforce.com mobile app, and has one feature that is particularly noteworthy. Chatter Publisher overlays the Chatter activity stream. Its look is reminiscent of the tiles feature on Windows Mobile Phone and the overall Windows UI.

File Exporer Paradigm

For a long time, File Explorer was a main user experience paradigm we had on the computer. File explorer was with us from early days of Windows. File explorer (folder) paradigm expanded with the tools like Outlook and becomes even wider discovery paradigm for information – folders / hierarchical discovery.

File explorer paradigm expanded even into first versions of mobile devices. On the following picture you can see an early version of mobile device UI also presenting sort of file explorer.

PDM/PLM systems are inherited File Explorer paradigm in many ways. Most of successful PDM projects inherited File Explorer user experience because it was familiar and usable. Even today, many PLM UIs looks like File Explorer.

Social Paradigm

Social paradigm roots are taking us to early days of social networks. It started as a communication tools only (messaging, chatting) and expanded as a tools to share content among group of people (Twitter, Facebook, Google+). The function of content share became even more important when mobile came to place. The ability to embed content such as video, photos in communication expanded the reach and value of these tools. The information delivery model shifted from “folder, file and share” to “activity stream with embedded content” coming from social peers.

Enterprise vendors took the activity stream paradigm beyond the point of photo/video sharing. Social applications like Chatter and others are helping you to share information content coming from files and other enterprise application in the way similar to Facebook and Google+ are sharing photos and videos. The last Chatter update just proved it again.

What is my conclusion? Shifting paradigms. In my view, we see it just in front of our eyes. What was obvious and straightforward experience for PDM/PLM systems for the last decade will become a nonsense for the generation of 2010s customers. People want their working environment to have the same experience as games, internet and mobile devices today. I can see “activity streams” paradigm as an an interesting experience that will displace current enterprise systems UI in many places. I don’t expect enterprise systems to be like Facebook. However, I think social applications will play a significant role in the future of user experience. Just my thoughts…

Best, Oleg

Why New Database Technology Won’t Solve PLM Problems?

March 18, 2013

Disruptive technologies and solutions. This is beloved topic by bloggers, analysts and vendors. We like to talk about how disruption will happen. For very long period of time, database technology was a stable element in the overall PDM/PLM technological architecture. The decision about usage of relational database was only about how to choose between Microsoft SQL, Oracle DB and IBM. However, recently, I started to hear voices about changes that might happen in the world of databases. I’m sure you’ve heard about noSQL. If not, you can catch up via this link – What PLM vendors need to know about noSQL databases? The question about the ability of noSQL or other alternative to SQL solution to disrupt PLM development and products is an interesting one. Yoann Maingon of Minerva is asking this question in his blog post – New database system for future of MDM. Yoann declares database as one of the inhibiting factors preventing users to move from one PLM solutions to another. Here is an interesting passage -

I hope the actual economy environnement will convince more people to invest time for helping the product development initiatives by solving Product Lifecycle Management related pending issues. Today’s article is about my thought on why it is always so complicated to move from a PLM solution to another, why are we changing tons of things and settings to in fact change a software cost or an interface. On of the reason is that all these elements are strictly related and the elements in a PLM solution can’t be dissociate. You can’t just keep you data and change the interface. From my previous experiences of migration, I’ve realized that I was moving data from a system to another with transformations but the data would still mean the same thing it is just that the software would handle it differently. Then speaking of standards would there be a standard for data management in PLM and should this define a technology or at least should it drive database system editors to push for one?

I’m in a bit disagreement with Yoann. In my view, all SQL, noSQL, XML and many other database flavors are providing an infrastructure that can be used in different ways. Yes, there are differences between noSQL and SQL databases. However, if we speak about building applications, the way application created will provide a much more significant factor on the efficiency and behavior of your application. Earlier this year, I’ve seen an interesting article, which focus on this specific question – NoSQL or Traditional Databases: Not Much Difference. Take you time and read it. You find it very educational. I absolutely liked the following passage -

I have spent considerable time tuning SQL statements and indexes, but in the end the best optimizations have always been those on the application and how the application uses the database. SQL Tuning almost always adds complexity and often is a workaround over bad application or data structure design. In the NoSQL world “SQL statement” tuning for the most part is a task of the past, but Data Structure Design has retained its importance! At the same time logic that traditionally resided in the database is now in the application layer, making application design even more important than before. So while some things have shifted, from an Application Performance Engineering Perspective I have to say: nothing really changed, it’s still about the application. Now more than ever!

What is my conclusion? No surprises. It is all about your application – logic, tuning, performance, mistakes and ability to create a reliable and efficient solution. Yes, different database techniques are requiring different technical skills. But if you have them, your ability to build PLM system on any of these platform will be almost identical. Just my thoughts…

Best, Oleg

Angry Birds Developer is Looking for PLM Job

March 16, 2013

Last week I posted about changing faces of product development following PI Congress in Berlin. One of the conclusions I’ve made is that we are starting to see a changing world of enterprise as a result of new generation of employees coming to the world of manufacturing. It is a very interesting shift and, I’m sure, we are going to see many changes in the future. What becomes more and more clear that manufacturing world is changing and it will demand a new type of software. This type of software is coming from web eco-system, mobile and gaming industry. And it will be demanded by enterprise.

Thoughts about gaming and different devices took me back to one of my old posts – PLM and the future of Gamification. One of the key element of future gamification is actually people. Looking back, 3-4 years ago, it was hard to find people that would be considering enterprise or business software as a cool place. It is a time to get an update and see if more people and new companies are getting involved in the business of for enterprise software. The following blog post caught my attention yesterday. Navigate to Altimeter’s Take: The Technologies That Matter from SXSW 2013 by Jeremiah Owyang about South by SouthWest Conference (SXSW 2013). For many years, this conference was a home place for hardware, consumer technologies, games and other cool stuff. It looks like this year it was a bit different. Hardware and enterprise were in focus. Here is my favorite and probably most important passage if you are developing enterprise software (and PLM) these days.

Software innovation continued, but mobile enterprise was a star. Software was not forgotten altogether, and from the festival that’s brought us many a fun app and game, this year the interest was in work. It seems the developers and mobile-centric brands are finally on-board the billion-dollar-bandwagon that is enterprise mobile development. Crowds lined up around the block to hear about mobile apps for major brands and to help people do their jobs. The era of Angry Birds millionaires while not quite over, is waning and the future is better tools for work that act like the toys we all enjoy on our mobiles.

So, this is how my provoking blog title is coming from. People are looking for better tools with the quality of games and other consumer applications to get their job done. PLM vendors need to think about how to change the balance of development forces and mix people with design and enterprise experience with young talents ).

What is my conclusion? The transformation is coming. SoMa is probably still full of consumer startups. However, the interest to enterprise software is growing. I won’t be surprised some ex-Angry Birds Developers soon will be applying for job positions in PLM and other business software companies. Just my thoughts…

Best, Oleg

3 steps how to put PLM / ERP each in their place

March 14, 2013

PLM and ERP integration. Endless topic. My PLM blogging friends – Chad Jackson and Jim Brown decided to discuss it again at their Tech4PD video blog. Even if it is presented as a debate, I found much more similarity between their statements about PLM/ERP integration rather than differences. They both agree PLM and ERP systems are taking a big part of engineering information environment, both systems are important, PLM and ERP are complimentary in terms of their business functions.

There are differences in the positions, of course. Jim is advocating for single source of products data integrated with ERP, CRM and other systems. PLM is the master of product data. From Jim standpoint, the data from PLM system is integrated and represents as product master data to all other data management systems. Chad agrees, the integration needed, but think low-touch integration is more secured and can be less risky. His (Chad’s) opinion is that total integration proposed by Jim is a too big shot to take. Chad advocates for simple integration and so called "one time information push". From Chad standpoint to keep integration simple is an easier and less risky path to integrate data. If you have few minutes, I’d encourage you to watch the video for few minutes (especially if you want to see how Jim takes a swim with polar bears).

So, a simple conclusion after 7 min of video – data needs to be integration between PLM and ERP. Well, it gave me sort of disappointment. Ask anybody in the industry they will tell you about needs to integrated information between PLM and ERP. I like the way Jim present the need – we have to have a comprehensive solution. At the same time, Chad put it down in a very pragmatic way- complex integration won’t work. We need to have something simple in place. The debates between Jim and Chad made me think about possible steps to resolve the complexity of integration between PLM and ERP.

1. Move from "data ownership" to "data publishing". This is an important shift. Enterprise system integration people spent decades debating "data ownership" topic. It is all about "master" and about how to establish a logic of data ownership. The concept of data publishing takes the data ownership upside down. You shift the focus on how to use data. The access can be provided using multiple ways (APIs and variety of data formats). My personal preference to use linked data and RDF/RDFS model (format) for that purpose.

2. Move from "data mapping" to "data description and connection". In other words, link everything. In the original concept of data integration (Chad called it "data push"), the focus is on how to map data located in one system to another system. The whole purpose is to take data in one system, convert (map) and put in another system. After you accomplished "data publishing" concept, you don’t need to transfer data. You just find right data using model qualifiers. It simplify the business logic and helps to establish more reliable data integration mechanisms.

3. Include links to data elements from other systems. Think about this option similar to links on web pages. If you need to extend data or navigate to related data, you just follow the link, which takes you to the right place.

What is my conclusion? I can see PLM and ERP integrations fail in many companies because it relies to old and outdated integration principles. These old principles relies on data ownership and business of protecting data in a boundary of enterprise applications. It is going to change soon. The new one doesn’t move the data while provide an open and reliable mechanism to build an integration system similar to web. Just my thoughts…

Best, Oleg


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