Last week we were part of a webinar where we worked with both Engineering.com and CIMdata PLM expert James White to look how companies can leverage best of breed software with cloud PLM. This is the first installment of a two-part series summarizing that discussion.
Today, we’re going to focus on what James White had to say: what CIMdata thinks the challenge is for the market, what the research says about cloud PLM and a few key takeaways for what might be the best product integration solution.
The challenge: product development is increasingly complex
CIMdata opened our webinar by outlining the challenge facing the complex manufacturing sector.
Products are increasingly complex and include more subsystems and modules that are incredibly specialized. For instance, a car now has a dense electrical network wired into it as well as a sophisticated computer needed to function.
Second, organizations have splintered their supply chains, procuring in more components and subsystems than ever before for both simple and complex modules.
There’s a very high percentage of submodules and subsystems that go into the end product… in the order of 40-70% procured-in items.
What this means is that traditional systems that work effectively within organizations are not fit for purpose because we now need systems to collaborate across the value chain.
That’s the challenge: products are complicated, there are lots more suppliers to manage, and procured-in parts represent an increasing percentage of the end product (somewhere between 40-70%).
The cost of the challenge
Collaboration is no longer optional for complex product development.
This usually happens with four main tech buckets:
But therein lies the problem. These enterprise systems fail to integrate effectively across the value chain. Usually, decisions are made outside formal systems and the how, why, who, and what is lost:
A lot of their decision-making process is not captured by enterprise systems. And that matters when it comes to audits or make recision to products or new products.
- Homegrown, customized solutions emerge to solve specific problems but don’t take into account value chain governance and data continuity
- Rev-locked systems (when organizations can’t upgrade to the latest system because it will break custom integrations/customizations) are commonplace
- The total cost of ownership is high
- There’s no clear master change record, bill of materials, master data management, or document control.
Inevitably, manual processes end up picking up the slack, and organizations lose insight and understanding into how their products are developed.
Research survey: cloud PLM is emerging as the software solution to the product integration challenge
The results verified that cloud PLM is a valid solution to the challenges around product integration and collaboration across the value chain.
There are a few points worth calling specific attention to that James addressed in the webinar.
1. Cross-functional coordination is the #1 challenge for PLM users today
The number 1 challenge with PLM reported in the survey was cross-functional coordination, bigger even then budget constraints.
What this means is that about 1/3 of organizations want PLM, have the money/buy-in for PLM technology but are restricted either within their existing system or by the products on offer when it comes to uniting different functions and technologies.
[with] The complexity of the product stakeholder network… it makes sense that cross-functional coordination is a problem both from a process point of view and from a systems engineering point of view.
2. Product integration is the most significant concern over cloud PLM
According to CIMdata’s research, the number one concern with cloud PLM is product integration into existing enterprise systems.
The concern boils down to this: organizations want to begin or continue to adopt cloud solutions. But at the same time, they have legacy systems (often on-premise) in place that they’re unwilling to rip and replace, and they’re worried about how those systems will connect with cloud PLM.
Other significant concerns include:
- Inability to customize
- The ability of cloud PLM to deliver high-quality solutions (e.g. concerns over performance, reliance on the public internet, data-lock in, uptime concerns, etc…)
The solution to the product integration challenge is cloud PLM
With all these challenges in mind, cloud PLM is arguably the best solution to help organizations bring products to market faster in a cost-effective way by enabling collaboration across the value chain.
There are few specific uniquely cloud PLM benefits that are worth mentioning to support this conclusion:
- Minimal disruption: Product integration with cloud PLM will complement rather than replace existing legacy systems while still solving the collaboration and data continuity challenges that organizations face
- Flexible licensing: Organizations can pay for what they use, reducing capital outlay and simplifying cost while ensuring easy scalability.
- Cloud PLM offers secure yet accessible data storage: Full security with dedicated IT staff keep data secure, and cloud PLM companies (us included) offer easy access to data to the clients who own it.
All of the mainstream SaaS providers do a very good job of maintaining data security while making it accessible to companies.
CIMdata Conclusion & key takeaways
CIMdata came away with a few conclusions about how and why cloud PLM might offer some relief to the challenges facing an increasingly complex product stakeholder network:
- Cloud PLM minimizes disruption without ripping and replacing legacy systems and simplifies product integration with other, increasingly prevalent cloud solutions.
- Cloud PLM lower total cost of ownership where IT costs are distributed, you only pay for what you use, and hardware costs are virtually nonexistent.
- People can collaborate across the value chain using tools they know to capture and preserve the robust record of change needed for audit and revision control.
- Cloud PLM prevents rev-lock – organizations are never stuck on a previous version due to a customized integration.
People need to collaborate to do their jobs.
And if organizations don’t make that collaboration easy from within enterprise solutions, workers will find another way to do it – another way that might not be as secure, tracked, or revisable, that might rely on manual or error-prone processes, or might simply not capture all the data the organization needs.
That’s it from CIMdata. Stay tuned for part 2 where we listen to our CEO and 20+ year PLM veteran John Laslavic talk about how he’s seen first-hand these challenges in organizations, and how cloud PLM is the key to empowering companies to use the best of breed tools they want without compromising an integrated and trackable product delivery.