PLM: Business Transformation vs. Business Pain Solving?

cloud-plm-tco.pngI’d like to provoke the discussion about PLM implementations today. I assume most of your had a chance to hear the term "business transformation". That was the way majority of PLM vendors, consulting and service companies approached PLM implementation for the last decade. In a nutshell, it means to transform business processes in a company to follow PLM strategy. Implementation of PLM products and infrastructure was part of "business transformation" process. I found a good description of what means PLM transformation in the following paper by Kalypso. Kalypso is well know service and consulting outfit – sort of "department store" in the business of PLM implementation. Their viewpoint is unique and interesting since they are partnering with the majority of PLM companies in the world (according to the following list). I found the following quote interesting:

In the past several years we have watched companies try to implement PLM solutions on a tactical basis; focusing on a single department or system function, defining the business problem narrowly, or taking a technology-replacement approach to their programs. These projects inevitably fail to deliver any significant business impact, but they are safe, small, and can “fly below the radar” of the executives. Nobody gets promoted, but nobody loses their job… Companies that adopt a strategic, “vision-driven” approach to their PLM programs are significantly outperforming those that view PLM more tactically. Specifically,there is a strong correlation between best-in-class program performance and the following actions taken by leading companies: 1/ Developing a firm vision and strategy for PLM that identifies a future state to achieve from PLM, and tie that vision back to the overall business strategy; 2/ Adopting a PLM program approach to implementing PLM, addressing the implementation of PLM as a series of related projects. 3/ Approaching the PLM implementation as a business transformation as opposed to a technology installation, recognizing the need to change behavior and business processes in addition to providing new software.

It is very solid statement. There is nothing wrong in the business of developing long term strategic programs and investing in product development innovation. There is only one problem here – the dynamic of business is different these days compared to what we had 5-10 years ago. The cost demand is different too. These days businesses are running much faster and requires speedy and flexible reaction of IT and all business systems (PLM included).

Speaking about flexibility in PLM implementation, I was reading commentary published by CIMdata yesterday – Using PLM In the Cloud to Improve Business Flexibility. You can navigate to the publication via this link. CIMdata speaks about PLM delivery via cloud actually speaking about TeamCetner and virtual cloud model. Siemens PLM recently announced the availability of TeamCenter via IaaS cloud infrastructure. I found the following passage from CIMdata commentary interesting:

Today companies are not looking to buy “PLM.” They want solutions that solve specific business “pains” for their specific industry focus. Businesses must be able to more quickly acquire and deploy PLM functionality and solutions that give them operational flexibility and improve the efficiency and the pace of product development, production and service. They need to be able to take advantage of new capabilities without having to go through lengthy installation and tailoring processes – and they need to deploy and operate these new capabilities in a cost efficient manner. Reducing the time to deploy new PLM functionality with less (or no) IT support and infrastructure costs can significantly improve operational flexibility

What is my conclusion? Flexibility and agility of PLM implementation is getting more attentions. Cloud is a perfect way to increase the flexibility of PLM deployment by providing infrastructure and tools to deliver PLM systems. The fact TeamCenter is moving towards cloud deployment just another confirmation of the fact customers are looking for alternative to existing PLM deployment models. Cost is another aspect. I don’t know if TeamCenter in the cloud is cheaper than traditionally licensed option. However, I can imagine how cloud PLM can provide cost advantage compared to existing PLM implementations. Together with flexibility it can become a deal-breaker for many manufacturing companies. Just my thoughts…

Best, Oleg

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