PLM trends in the intersection of Business and IT

August 24, 2009

plm-it-interestion-trendsYou can ask me why would you like to talk about trends? Trends are something normally going toward an end of the calendar year? Something like “2009 trends” or “future 2010 trends”… What’s up now?

I think, current turbulent time brings different time scale on everything we are doing. Businesses need to take decisions about what they are doing on going basis and not on calendar basis. So, thinking about various business needs and heading up to more active post-summer time, I decided to put few thoughts about PLM and surrounding topics.
I’d like to suggest to take a focus of two – Business and IT. And definitely, “business first” notion. In my view, prism of Business will have a very significant impact on everything that will go in Product Lifecycle Management in the near future.

So, I figured out four “major trends” and want to talk about them a little bit more in deep. I will take them in the order from most “business significant” to “more technologically significant”.

1. Upfront cost of PLM projects will impact enterprise PLM

I think initial cost of PLM projects becomes a very significant factor impacting various kinds of PLM implementations in enterprise these days. I’d expect every Business Unit thinking about PLM strategies to ask question how we can do the same with less cost? I see here various impacts coming from outside of PLM, such as development of “free software notion” in consumer space, OnDemand/SaaS models for CRM and partially ERP applications and, finally, bad perception about PLM implementation performance. I’d expect major business re-thinking in the way business will think about PLM and surrounding business applications. What does it mean for PLM vendors? My thoughts here mostly about alternative business models (free/open source) and new technologies that lower cost of PLM deployments.
2. Vertical PLM Solutions

PLM becomes very broad solution when vendors start to think in context of various industries, vertical, markets and organization types. One of the possible ways to become more efficient and increase adoption rate, is to focus PLM solutions/implementations on the specific market niche. The potential of a specific market niche/industry can be significant for mid-size software vendor to get in. Another interesting perspective is how “PLM behemoths” will be reacting on such a move. My expectation is for positive reaction and interest to build market/industry specific partnerships and alliances.

3. Alternative non-PLM solutions

This is another interesting move. Do you like buzzword “PLM”? I’d expect not everybody like it and many of the software vendors and solution providers can try to find solution for “PLM problem” in “non-PLM way”. The potential exists in multiple domains Business Process Management, MDM, Content Management etc. These companies, leveraging new technologies, infrastructure and ideas can compete to provide product development, engineering and manufacturing solutions in the same space occupied by PLM vendors. Even if I see potential risk for current PLM businesses as very low, I think risk for “white space” and “new business” is very significant.

4. PDM renaissance

Th  This is my last point. What can be done in PDM these days? PDM is a core of Product Lifecycle Management and provide basics data management capabilities for most of PLM deployments. At the same time, PDM is mature and provided by many vendors these days/ At the time when customers will be looking for more cost effective solutions, less overlap in business functions and additional optimization PDM can get “a second move”. Such PDM renaissance can be driven by new technologies, usability improvement and new business ideas. This is a pace to innovate in my view.

So far, I’m sure haven’t chance to make fundamental research. These are just my thoughts, and I wanted to share it with you. I will be waiting for your comments and great blog discussion.

Thanks, Oleg

PLM Prompt: What will be PLM Open Source secret sauce?

July 27, 2009

Interesting prompt in my view. I was reading Stephen Arnold’s post Open Source Dust Up“. Some interesting facts, thoughts and questions behind success of open source companies. This is about money, not technology. Big surprise…

So, my question today is simple. Is there “silver bullet” for PLM Open Source? Is it something we’ll love because the current financial climate? And most important will companies focusing on open source in enterprise (and PLM) be able to make enough money from service, consulting and implementation?

Best, Oleg

PLM Prompt: Is Free the Future of PLM?

July 13, 2009

There are a lot of buzzes now debating future business models of “Free”. I had chance to read Chris Anderson book “Free” over the weekend. My thinking today is that freemium model is still having long way to go and most of the providers today are still in single digit revenues.


What I was thinking is that freemium business model can solve a problem of Product Lifecycle Management user adoption rate. Finally, the most effective price is no price at all. So, providers of PLM software will be competing to provide quality software to get market share. Successful ones will have after, option to receive premium revenues for extended portfolios…

What do you think about it? Does it make sense?

Best, Oleg.

PLM Prompt: Value of PLM Vertical Solutions

July 1, 2009

Short prompt on interesting Oracle partners push to more specialized veriticals. PLM is one of them. It confirms Product Lifecycle Management value for customers and shows hight margins of PLM solutions in protfolios of big enterprise vendors (Oracle, SAP, IBM etc…).

I’d expect interest of big enterprise in specialized PLM solutoins. Just my opinion…

My Slice of PLM Single Version of Truth

June 18, 2009

I have a crazy idea to discuss today. I’d like to talk about a topic that we like very much and that is often discussed when we mention PLM. The topic is a “single version of the truth”. In my opinion, in many cases, we do present it as being obvious.. Yes, the fundamental intention of Product Lifecycle is to cover a product from the initial concept up until the product is manufactured, released, supported and recycled. So, having a unified way to manage product, processes, and resources is one of the most important ideas concerning PLM.

Today’s enterprises are becoming very dynamic: changes are happening all the time; companies are working with a wide range of suppliers for different purposes. How can PLM provide affordable and scalable solutions for such a dynamic eco-system? This creates a lot of challenges for a company providing product data and lifecycle management solutions. How you can get everybody synchronized in the way you do business processes, and how can you keep your PLM systems up-to-date in this environment?

So, I came to a working conclusion that I’d like to discuss. My point is that in today’s enterprise eco-system, you cannot demand people to agree about how to manage your product data and processes. Ah… I know, it sounds bad, but bear with me for few more minutes, don’t close this post:)… I think today’s data management is too complex to allow large organizations to agree on a single way to do business and implement a PLM system to follow this agreement. This task is too complex and too long. You won’t be able to finish this task and you will have to start with new one! So, this is probably the most fundamental problem in today’s system implementations. It’s too long and too expensive since we are trying (and we need) to agree on how to implement the systems.

Here’s my 5-point view on the subject as follows:

  1. Organizations and systems are too complex to agree on PLM related data, processes and best practices.
  2. Successful PLM implementations need to focus on how to manage ongoing system changes.
  3. Best practices and processes in an organization will be a result of multiple changes and improvements in the PLM system implementation.
  4. The system needs to keep track of all changes
  5. We need to have very a flexible PLM system, and I don’t believe we have one yet.

What’s my conclusion? I was reading Jos Voskuil’s blog post about PLM ROI yesterday and thought about why ROI for PLM is not obvious. My take on this today is that, probably, as our implementations are still too big and too complex, people see this as very big and fundamental investment. So, they need to double-check themselves with many calculations around ROI. Allowing ongoing changes and modifications of PLM systems will make implementation simpler and ROI calculations easier…

So, don’t keep quiet… I know you won’t all agree with each other – but let me know what you think.

PLM Prompt: SAP on premise vs. Business by Design

May 20, 2009

Interesting thoughts by Stephen Arnold related to On-Premise vs. SaaS software based on SAP case.  Also link on Understanding SAP’s Business by Design SaaS strategy.  

SAP Business By Design

Do you think the same analyses can be applied to PLM business?

Open Source: Is the Game Changing for PLM?

March 11, 2009

In my view, open source (or more precisely –open source software) is becoming more and more visible in the business of enterprise software. 

There is an important characteristic of PLM related to business that we need to keep in mind in order to analyze the impact of open source on PLM. There is a high segmentation of customer requirements for different industries and customers needs for different types of customers. Today’s “mindset PLM leaders” still are not capable of covering the full scope of customers’ needs. This topic makes open source both attractive and disruptive for PLM.

 On one hand, when there are many common customer requirements, open source is very beneficial.  Users have an ability to submit code from all participants of open source, for example, as in a Linux system. This scale up is very significant and allows us to develop big systems according to communities of users. But, at the same time, if there are quite many different requirements this can disadvantage of open source. 

In addition, due to the high percentage of services and customization, the ability to deliver overall PLM project as services without licenses cost is a significant advantage and changes the game of PLM system implementation. So for this type of customers, open source will probably be beneficial. At the same time, smaller customers will be more interested in standardized functionality with fixed cost that will allow them to achieve their ROI goals and less interesting when implementation turns to services projects. 

My conclusion – on one hand, open source in general and open source PLM specifically brings a significant improvement in the way we create systems for our customers. These models shift the initial discussion from license selling to customer requirements. On the other hand, it’s not clear how IP protection in different organizations will allow the crowdsourcing of open sources and common delivery in this field. This happened successfully with different non-PLM software, so it’s definitely a place we need to watch in the future.


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