Why all PLM software will be SaaS soon?

November 26, 2014

plm-cloud-dream

I’ve be sharing many of my thoughts about how different cloud technologies can be used to implement PLM. Nevertheless, once in a while, I’m also getting comments and questions about acceptance of cloud PLM for large companies. Usually, it comes in the intersection of security and readiness of large manufacturing companies for cloud (SaaS) software.

TechMVP article – The benefits of SaaS transformation: both the obvious and non-obvious shows some very interesting perspective on that topic. Let me go straight to security question:

The second common objection stems from the thought process amongst large enterprise CIOs regarding whether to allow certain applications to live outside of the enterprise’s firewall. IT managers and executives – sometimes speaking about legitimate security concerns and sometimes speaking to protect their jobs – stand in the way of core applications moving to the cloud via a SaaS vendor. At the same time, these same decision makers have adopted Salesforce.com for CRM, and allow unencrypted email between employees and non-employees, thus calling into question the sincerity of their argument against other SaaS applications. The successful adoption of CRM in the cloud has opened the floodgates for virtually all other types of applications to move to the cloud even over the objections of certain IT managers.

Towards this end, we have seen in recent years the advent of ERP (FinancialForce, Workday), Marketing Automation (Eloqua, Marketo), and Software Development or ALM (GIT and Rally Software) in the cloud. These types of applications manage information that is often considered the “crown jewels” of corporate data, and thus are the types of applications that some thought would never take root in the cloud.

I can observe a significant growth of SaaS software adoption by manufacturing outside of pure engineering domain. You can see software in different categories – ERP, CRM, marketing, project management, software lifecycle management and many others. Imagine manufacturing product with software code managed using GIT? What will be the point to reject PLM system managing engineering bill of materials in the cloud?

Another interesting perspective is related to creation of new software companies. The graph below demonstrate a complete dominance of news business starting SaaS companies.

saasapps

One more data point is coming closer to PLM business and related to implementation of ERP systems. Panorama consulting solutions published an interesting 2014 ERP report, which speaks about type of ERP systems implemented in 2013. As you can see SaaS and hosted system is accounting together for 96% of all systems.

type-of-erp-software-2013

What is my conclusion? I wonder what percentage of new PLM systems implemented in 2014 will be SaaS. The number is probably not very high. However, traditionally, it takes long time to decide about PLM system. My hunch, that broad adoption of SaaS software in other domains will push manufacturing companies to evaluate more PLM systems and make their decision faster than before. SaaS lower risks and upfront cost, which can be an additional factor for manufacturing companies to taste cloud PLM sooner than later. Just my thoughts…

Best, Oleg

photo credit: Robert Hensley via photopin cc


Mass customization is the real reason for PLM to want MBOM

November 26, 2014

nike-custom-shoe

Data ownership is an interesting topic. Our life is getting more digital every day and we are asking many interesting questions about who owns data about us. Who owns the data about our Facebook profiles, who owns social media data we created and many others. While still there are some gaps in understanding who owns the data about our digital life, when it comes to business use cases, the things are also very complex. Ownership of information is one of the most fundamental things in enterprise business. Engineering and Manufacturing companies are living it every day. If you deal with enterprise data, you are probably familiar with the term – master data. Usually it leads to many discussions in organization. Who owns the master data about design, bill of material, item, etc.

These are questions that need to be answer to allow to enterprise system to functioning properly. In one of my old posts I shared my view on Ugly truth about PLM-ERP monkey volleyball. Until now, the demarcation line of engineering vs. manufacturing was somewhat acceptable in most of the situations. I tried to capture this status in my Thoughts about BOM ownership article. However, things are going to change.

PLM and ERP are getting into new round of debates about ownership of data. It comes as a question raised in engineering.com blog – “PLM should take over ownership of the manufacturing BOM too”, says Siemens PLM’s CEO, Chuck Grindstaff. Navigate to this link to read the article. Management of EBOM and MBOM as well as many other BOMs is a very complex problem that cannot be solved in an easy way. One of the key problems is the need to synchronize information between BOMs. However, synchronize is probably a wrong word. These BOMs are not identical and requires application of very tricky logic to keep them in sync. To solve it is a big deal for many companies and they will demand it from vendors. Therefore, I’m very confident that, after all, PLM vendors fight over BOM will require to solve data synchronization problems.

At the same time, manufacturing is changing. One of the most visible trends in manufacturing is mass customization. We are moving from mass production methods toward total customization. The demand for configuration is growing and customers are requiring sophistication of engineering to order manufacturing processes applied to a broader range of products and services. Bill of materials is a center piece of these processes. What was done before by configuring a small set of preconfigured modules won’t work in a new reality of manufacturing and mass customization.

My attention was caught by a set of articles about Mass customization by Kalipso. One of them was published on Innovation Excellence blog – Modern Mass Customization – Rule 3: Honor the Order, Abandon the BOM. These articles are worth reading. Here is my favorite passage that outlines a special role of BOM in mass customization manufacturing process:

The relevance of the BOM greatly diminishes as a company transitions to a ‘to-order’ product offering. For mass customizers, a Bill of Materials, or more appropriately, a Bill of Modules, is a transient artifact. It is entirely possible that a given BOM may only be built a single time, and for a single order. Mass customizers should shift their perspective of the BOM from the identity of the product, to the technical details of the order. The identity of the product then becomes the governing logic that permits a range of configuration possibilities.

As the purpose of the BOM changes, so changes the purpose of PLM and the systems that support it. Rather than originating in PLM, BOM details originate with the order itself, ideally using a customer-facing product configuration system. As long as the order and corresponding BOM are compatible with the business rules that govern configurations, these details can be passed on directly to production systems for manufacturing (ERP, MRP, MES) without making a pit stop at PLM. PLM thus transitions from a tool for managing the lifecycle of a BOM, to a tool for managing the lifecycle of modular components that are used by the configurator.

I’m not sure about “abandoning the BOM”. However, article made me think about some elements of BOM management that are going to change. One of them is granularity of BOM. What I can see is the overall transition of BOM management into more granular process of configured components. In order to do so, PLM and ERP will have to re-think the way ownership and synchronization is happening. The question of “ownership” of granular product definition is getting less relevant. To manage smooth synchronization process is much more important.

What is my conclusion? Modern manufacturing trends are going to transform enterprise systems as we know them. Mass customization is one of them. PLM and ERP are two main systems that involved into process of engineering and manufacturing. To support mass customization product engineering and manufacturing these systems will have to interplay in a completely different way. In my view, the demand to support mass customization and other complex manufacturing processes is leading PLM vendors to want MBOM badly. However, here is change that can come as a result of rethinking of BOM management. In the future, Bill of Materials should not be owned, but intertwined and shared between PLM and ERP. Ownership of data will become less relevant. The new reality of data sharing and collaboration is coming. Daydreaming? Just my thoughts…

Best, Oleg


How to find sweet spot of future PLM UX improvements

November 24, 2014

new-plm-ux-design

The days of ugly UI are in the past. The trend that started from website design, mobile UI and intuitive consumer application is coming to enterprise software. Users of enterprise software are also consumers and it is hard for them to tolerate bad user experience of software they work every day. Remember my old post – PLM: Ugly vs. Cool? I can see cool UI is coming to engineering space too. My prediction – user friendly interfaces and better user experience will become one of the top 3 factors that will influence PLM in 2015. I can see this trend is coming from leading software providers. I put few examples in my blog few days ago – PDM/PLM UI Makeup: new trend in user experience.

So, cool is going to win. However, here is the thing. Cool is very expensive. To design new experience and to re-work existing applications will take time and money. It won’t happen overnight. So before you make your existing PDM/PLM nicer by developing new web tools or switching to new web technologies, I’d recommend to make some ROI calculation. It will help you to prioritize your work and make your customers happy. Actually the last one is even more important than the money you spend on rework. From my experience customers are getting REALLY angry when vendors are selling an old application with new UI (lipstick on a pig).

How can you decide about what part of your enterprise application to change. To set up priority and calculate ROI is very important. Software developers are very often missing this part of running full speed to change user interface and develop new apps with nice colors, but … performing exactly in the same way as the old one.

There are two things to remember when you think about new UI and new user experience – scale and impact. You need to maximize both and avoid making changes in the part of application that will be exposed to smaller number users or rarely in use. My attention caught by a very interesting article – UX for enterprise by Jordan Koschei. Have a read – here is my favorite passage:

The sheer scale of enterprise clients magnifies the effects of good and bad design alike. Small inefficiencies in large organizations result in extra costs that are passed on to the end user in time spent, money lost, and frustration increased. Likewise, when an enterprise prioritizes user experience for its internal tools, it becomes a more effective organization; a recently released business index shows that design-driven companies outperformed the S&P average by 228% over the last ten years.

It led me to another article that gives a perfect sense of how to approach ROI calculation for UX improvements – Calculating ROI on UX & Usability Projects. It brings list of approaches that can be used for calculation – increased sale, increased productivity, increased customer satisfaction and loyalty, decrease training and support cost and few others. From my perspective, very often, development are focusing on customer satisfaction and loyalty. But, this is something that enormously hard to measure. Opposite to that, think about productivity: Here is my favorite passage from the article about that:

For example, if you optimize the UX on a series of screens so that what was once a 5 minute task is now a 2.5 minute task, then you’ve increased a person’s productivity by 100%. That’s huge. HUGE. If the company has 100 phone agents who have an average salary of $40,000 + benefits (~$8,000) (+ an unknown amount for overhead), you could either release or retask those agents on other activities with a savings of $2,4000,000/year. (half of 100 agents x $48,000)

It made me think more specifically about PDM and PLM use cases. What are the most critical, time consuming and repeatable scenarios? If I think about PDM, everything I do with documents – check-in, check-out, release, view, search is extremely time sensitive. If check-in operation takes 50 minutes and fails at the end, users will be very angry. To improve check-in operation is a very complex task. But if you can save 30% of time, it can result in huge saving. Let me think about PLM use case – ECO management process.It can be really complicated, requires to open multiple screens, browsing for information, making requests. Improvements of this experience, can have a huge impact on productivity. I’m sure, you can come with more scenarios, but I guess you got my idea.

plm-ux-improvment

What is my conclusion? Customers are looking for nice UI. This is not “nice to have” feature for them anymore. However, it comes down to much more than nice layout and pretty colors. It comes down to “user experience” in the way that can make life of users easier, save time and get job done with less clicks. PDM/PLM vendors must think about it before embarking into next development project of changing colors and font size in their existing apps. Just my thoughts…

Best, Oleg

photo credit: phishtitz via photopin cc


What will influence PLM in 2015?

November 21, 2014

plm-2015-influencers

2015 is just around the corner. Typically, it is a good time to come with some ideas about what are those trends that will become visible and important for the industry. Today, I want to look in my crystal ball and think what are trends that will influence product lifecycle management strategies, products, vendors and customers in 2015. I want to come with my top 3 – user experience, mobile and big data/analytics.

1. User friendly interfaces, better user experience and ease of implementation

User experience and new UI design becomes a norm. Ugly enterprise software is a thing in the past. Vendors are face-lifting existing products and setting really high bar for new software. Personalization, screen simplification, on-boarding scenarios and overall user friendliness are coming into play. Nevertheless, I don’t expect PLM products to change fundamentally in 2015. Behind the scene, PLM products still remain ugly and complex. However, outside facade is clearly improving, which is really good sign for customers. Another aspect of user-friendliness is related to industry vertical and tailoring. To come with predefined user scenarios, data models and implementation practices will become a norm. Nobody wants to start to implement from scratch.

2. Mobile access to information

Total acceptance of mobile devices is not leaving any space to vendors to ignore and avoid it. There is no time to think how to deliver mobile experience. Customers are expecting mobile access for anything. It is a challenge for many vendors. At the same time, mobile development today is not magic rocket science. So, I’m expecting to see growing number of mobile solutions coming from PLM vendors. Another part of mobile solution is related to ability of vendors to come with a specific mobile experience. It will become less about "just mobile app doing the same our product does", but about apps that supports new way of work – mobile.

3. Big data & analytics

Big data is a huge trend- lot of buzz and hype is going around that. Until now, most of PLM customers were not much involved into big data activities. However, turns out, big data trend is reshaping into very useful data analysis projects. And from that standpoint, many PLM customers are getting very much interested in results. To get insight on quality of processes, product usage, customer services – this is only a very short list of topics where analytics and big data can help. I’m expecting appearance of many "smart data analytic" products that can bring value on top of what PLM products are doing today.

What is my conclusion? I guess we are going to see many other smaller trends in 2015. Some technologies are getting matured, company will come with new set of products and technologies. Also, I can see some bigger scale development and trend that will become a cross multi-year initiatives. However, these 3 things- user experience, mobile and big data are things that will influence on how PLM products will be shaped in 2015. Just my thoughts…

Best, Oleg

photo credit: april-mo via photopin cc


Thoughts about BOM ownership

November 20, 2014

data-shared-instead-of-plm-erp

The Engineering.com publication about PLM taking ownership of MBOM ignited few discussions online about Bill of Materials, BOM Management and co-existence of multiple enterprise systems. My first thought was that all of them will have to rethink the way BOM is synchronized between systems. This is not a new problem. Any implementation of enterprise PLM is facing this challenge. Pumping BOM between PLM, ERP and other systems is costly and complex process. But the reality – this is the only practical way to do so.

I went back in my old writing to find some recommendation how to make it easier. My old blog post five years ago, speaks about Seven Rules Towards Single Bill of Materials. To me, all recommendations are still very relevant. Following them can make your “BOM synchronization” problem less painful. Almost at the same time, Jim Brown of Tech-Clarity also shared his thoughts about single BOM: Single Bill of Material – Holy Grail or Pipe Dream? I liked Jim’s thought about Single BOM vs. Associated BOM. Here is a passage I liked:

Companies have spent a lot of time and effort making logical connections between different BOMs, and developing tools to help develop and synchronize different BOMs. For example, PLM, MPM, and Digital Manufacturing software helps companies translate an engineering BOM into a manufacturing BOM and then further into a BOP. In fact, they have gone further upstream to match conceptual BOMs and requirement structures downstream to BOMs. Maybe you would call these “workarounds” to the real answer of a single BOM. But I would propose a different view based on history and my observations. Perhaps engineers have done what we do best – addressed the problem in the most practical way as opposed to the most elegant way to solve a problem.

At the same time, single BOM or Associated BOM is hard. It requires many points of synchronization between departments and processes. Therefore, I still keep my opinion that most of companies today are still Not Ready for Single Bill of Materials.

So, what to do? How to make an improvement? Do you think fight for MBOM as it mentioned in Engineering.com article is the only way? I tried to visualize the picture of different BOMs and present it together with how PLM and ERP ownership is distributed. Take a look on the picture below.

PLM-ERP-BOM-Ownership

There are paces where each systems claims their benefits. At the same time, there are places where ownership of bill of materials and related product information can be different. The touch point is manufacturing BOM. I still believe, this is the next cool thing in PLM – how to manage MBOM.

What is my conclusion? I think both ERP and PLM vendors need to take a step back. Data ownership was a fundamental part of any enterprise business strategy for the last 20 years. Maybe, this is a time to change data ownership approach? Maybe it is a time to think about better data synchronization and transparency. How we can help people to collaborate alongside the product development process from design to management and to support and services? Just my thoughts…

Best, Oleg

photo credit: mrxstitch via photopin cc


Social PLM: How to pull a trigger?

November 19, 2014

plm-social-trigger

In my yesterday blog, I shared some of my thoughts about “Facebook at Work” and potential impact on engineering and manufacturing software. It made me think again about all discussions and stories related to social software trend and social PLM.

Social was trending topic 3-4 years ago. Many new companies were founded back those days to realize the idea of “social enterprise”. No doubt it was heavily influenced by the large popularity of social networks and web. Facebook, LinkedIn, Twitter and many other companies supported that trend. In enterprise domains, companies like Yammer and few others made a successful swing by introducing their products in business domain.

CAD vendors reacted on social trend by introducing “social platforms” or “social products”. It was mix of new development (Dassault 3DSwYm) , partnerships with other vendors (Microsoft SharePoint – PTC Windchill Social Link) or technology acquisitions (Autodesk – Qontext). In my view, none of these products and technologies changed a way people used to work in organization. Vendors blamed engineers for anti-social behavior. Customers blamed vendors for non-intuitive user behavior, missed features and bad integration with engineering content.

I put some of my notes about why I think social PLM trend lost the opportunity: Why Engineers Don’t Like Company Private Social Networks? and Why Social PLM 1.0 failed? I guess,despite all attempts, email remains one of the most visible collaboration tool for most of engineering and manufacturing companies.

At the same time, I believe, it is a time to rethink ideas of how to bring social into business eco-system. This is not an easy task. Some of key elements can be – structured enterprise communication, integration with existing messaging and communication system and thinking about social in connection to task management.

I had a short tweeterstorm with Jim Brown yesterday, following my blog about “Facebook At Work”. Jim kind of dismissed my points about usefulness of Facebook as a business social tool. Jim stands behind his old article – What I Learned: We are not Going to Design an Airplane on Facebook!

@olegshilovitsky: Maybe @jim_techclarity will rethink his 5 years old statement about airplanes design on Facebook

@jim_techclarity: @olegshilovitsky No, not rethinking it. Re read the post and you will see my predictions are pretty spot on. This time, at least

@jim_techclarity: @olegshilovitsky There is a lot more low hanging fruit elsewhere. Easier to add social to PLM than PLM to social. Talk to you in 2019 ;-)

jimbrown-olegshilovitsky-tweetstorm-social-software

Most of the time, I’m in agreement with Jim. However, I disagree on his view on social software add-on role. We should not view “social” software as an addition to something else. This is a mistake that many enterprise software vendors did in the past few years. Social is a reflection of people behavior. I believe, this is a fundamental thing in what Facebook did – to emphasize the importance of “real person” identification in social network. All social networks before dismissed the importance of identification. Facebook made it as a core function and won. Of course, it doesn’t mean the same thing will work for social enterprise or PLM.

Facebook at Work is coming to capture attention of people during work time. Today, many places are banning Facebook as a destruction. I guess, Facebook wants to figure out how to offer social value for people during their work time. To me it means to crack “social behavior at work”.

What is my conclusion? The main point of “social” is not to become a nice addition to enterprise software to improve collaboration. Unfortunately, this is how most of enterprise software vendors (PLM included) understood it. Collaboration is important and existing PLM products need to focus how to improve user experience. But, social is not about that. Social is about “behavior” of people at work. Today, it is mostly around email and important business systems. Not much social. We don’t know how to pull the trigger of social software in a company. In order to do that, we need to think about “behavior”. We need to think how to make people addicted to business social function through the value it brings on everyday basis. Just my thoughts…

Best, Oleg

photo credit: Ian Ruotsala via photopin cc


How CAD and PLM vendors will compete with “Facebook at Work”

November 18, 2014

facebook-at-work-for-engineers

Social software was hot topic in engineering software ecosystem for the last few years. The results are somewhat mixed. Start-up companies and well established CAD/PLM vendors learned by mistakes, some of them failed and some of them is still in process of developing new type of collaborative engineering software. I captured some of my thoughts about that here – Why Social 1.0 failed

One of the most famous messages of social software was to create “Facebook for XYZ”. Many companies tried to deliver this message in variety of forms in engineering software. The most impressive one was GrabCAD, which created a community of about 1.5M engineers sharing 3D CAD files. Even so, GrabCAD put their focus on development of cloud PDM software – to find a way to monetize. Some of my comments on what GrabCAD did are here – GrabCAD – from Facebook for engineers to PLM. GrabCAD is probably a company that unofficially can own the tag of “Facebook for engineer”. Google search is a good confirmation for that.

A very interesting news came from “original” Facebook. Earlier this week, Facebook leaked the information about Facebook’s intent to create so called “Facebook at Work”. Forbes article gives you some details about Upcoming Facebook at Work service will rival LinkedIn and Slack.

Facebook is preparing Facebook at Work, a service aimed at enterprise customers that will allow them to chat with colleagues and “collaborate over documents,” according to a new report in the Financial Times which cites anonymous sources.

Social business wasn’t an easy job for many companies. For the last few days, I see many speculations and reports about how easy (or not, actually) Facebook can capture a new business niche. Here is the article from ReadWrite – Why Facebook For Work Will Be A Hard Sell To Employers. This is my favorite passage:

Users will be able to chat with coworkers, collaborate on projects, and build catalogues of colleague’s contacts, with each of these services directly competing with Microsoft’s Yammer, Google’s Drive, and LinkedIn. All the services Facebook at Work will offer already exist. Slack, Google Drive, and LinkedIn already do these features well, and have the market for these respective services cornered. If Facebook at Work is going to have a chance of competing, it’ll need to extremely improve on its competitors’ services. And from the little we’ve seen of the service (with Facebook declining to comment), it’s hard to tell if Facebook for Work even has a chance.

“Facebook at Work” news made me think about what it means for engineering software ecosystem? First of all, it reminded me how is dangerous profession of industry analyst. It is still unclear how successful Facebook at Work is going to be, but Jim Brown of Tech-Clarity should be probably concerned about his 5 years old statement – We are not Going to Design an Airplane on Facebook!

All engineering vendors (CAD and PLM companies) just got a new mindshare competitor in everything that can be considered as social and collaboration. In my view it will be hard for Facebook to focus on “project collaboration” for design and engineering teams. The space is too narrow. At the same time, “social collaboration pond” is not as safe as it was before such a big fish as Facebook jumped into it.

My special attention caught by feature related to document sharing and collaboration. In my article – The path towards ubiquitous CAD cloud drive, I mentioned few examples of companies working on how to leverage cloud for CAD files storage and collaboration. Cloud file storage is an interesting place and I expect to see many changes in this domain in coming years. Every engineering company will have to think about pros and cons to have a special CAD files sharing tool. Facebook is just another behemoth convincing companies to store files on their servers and developing slick user experience to collaborate and share project information.

What is my conclusion? Facebook just captured a piece of attention for social project collaboration from everyone. “Facebook at Work” won’t compete directly with engineering software businesses. However, most probably, CAD and PLM vendors have to review their sales and marketing presentations. How to differentiate engineering collaboration software from Facebook? I will put security and CAD viewers on the top of my list of differentiators. Facebook won’t be able to change security perception overnight. Also, it will be challenging to develop 3D viewing solutions. Some specialized vendors can decide to jump and partner with Facebook about 3D CAD viewers. At the same time, there is one thing, which will challenge CAD and PLM vendors already tomorrow. Together with Google, LinkedIn and other web giants, Facebook will challenge engineering teams by setting even higher bar for project collaboration user experience. Just my thoughts…

Best, Oleg

photo credit: aldoaldoz via photopin cc


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