6 Reasons Why PLM Will Lead Digital Transformation for SMB Manufacturers

//6 Reasons Why PLM Will Lead Digital Transformation for SMB Manufacturers
PLM digital transformation

Summary: digital transformation is all the rage. For complex manufacturing, it means changing how business processes work and how data is treated. PLM can be the digital transformation ‘in’ for SMBs.

Digital transformation (DT) is one of those persnickety buzzwords that’s equal parts useful and meaningless.

On the one hand, in 2017, 67% of respondents to a Constellation Research survey said that digital transformation was essential to driving profits…

… but on the other hand, the same report found that 19% of organizations don’t have anyone leading their DT strategy.

SMBs, in particular, seem stuck in this frustrating limbo – they know they have to undergo a digital transformation but have no idea how to go about it.

We think PLM digital transformation is the answer. Here are 6 reasons why.

What is Digital Transformation?

Before we get started, let’s clarify what we’re talking about.

Digital transformation is when organizations use digital tools and strategy to:

[realign]… technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.

We think slightly differently. We think digital transformation for SMB manufacturers is about using technology and data to:

  • Transform the process of how something is done.
  • Access and leverage data to drive business decisions.
  • Drive collaboration in complex environments across complex supply chains.

Ok, now that we actually know what we’re talking about, here’s why PLM digital transformation is the best way for SMBs to win modern manufacturing.

1. Cloud PLM flattens data silos

The data SMBs need to make complex products is usually strewn across different silos.

These silos are reinforced by the underlying tech stacks that are implemented departmentally, not holistically, and are terrible at integrating with each other.

For instance, a manufacturing company might use an ERP, a CAD program like SOLIDWORKS, a PDM, and Excel to manage their suppliers (e.g. as a stand-in SCM).

But data doesn’t move between these solutions.

Big vendors want their customers all on their platform. For instance, Dassault Systemes wants their customers to use SOLIDWORKS and Enovia. They have no incentive to allow cross-tool collaboration outside the Dassault family.

Cloud PLM software can act as an integration engine that brings disparate data together, enabling cross-department and cross-company collaboration.

2. Existing technology stacks are on-premise or hybrid

The future of digital transformation is the cloud. From the 2017 Constellation Research survey, 77% of respondents said that their organization would increase spending on cloud and SaaS products.

The reason is simple: cloud technology is better. It’s more scalable, requires less up-front capital investment and maintenance, and enables collaboration across different physical spaces.

Unfortunately, other aspects of enterprise industrial technologies like ERP and traditional PLM are overwhelmingly not on the cloud. It means that any DT project starts with a huge move to the cloud pre-project, or a ‘rip-and-replace’ approach, which is extraordinarily long and extraordinarily expensive.

Cloud PLM digital transformation projects deploy faster and cost less to get up and running, which means that they’re a lot more likely to succeed. What’s more, cloud products scale with their customers, meaning as the SMB grows, their software stack grows with them automatically, rather than requiring lots of effort to update or buy new servers or some other nonsense.

3. PLM digital transformation has an excellent ROI

Because cloud PLM has such a low implementation cost, it’s easier to get a positive return on investment.

In particular, when you compare PLM digital transformation to other DT strategies, the case for cloud PLM becomes clear.

First, most other digital transformation approaches have 3-5 year return on investment window. This is fine when you’re an enterprise organization, but if you’re an SMB you probably need to see the impact of your decisions a bit quicker.

Second, cloud PLM hits a lot of low-hanging digital transformation fruit.

For instance, installing a cloud PLM (well, installing ours anyways) can help a business:

  • Use the data they already have to drive business decisions
  • Define a formalized workflow and cut out excess steps and processes
  • Automate manual tasks to increase efficiency and reduce errors.

These three aspects alone, which SMBs can expect shortly after implementation, are enough to justify the cost, which again, is lower anyway.

Low cost + faster returns = much better ROI.

4. Cloud PLM can close the feedback loop

IoT and the industrial internet of things (IIoT) are covered ad nauseam by enterprise organizations.

But behind the IoT hype lies a less flashy truth – unless we work out a way to close the feedback loop and bring the data collected by IoT sensors and smart devices back into the SMBs distributed throughout the supply chain, we’re collecting data and doing absolutely nothing with it.

we’re collecting data and doing absolutely nothing with it.

It’s a major pain point of digital transformation but continues to be ignored.

PLM digital transformation is different. Because cloud PLM is built with flexibility and data acceptance in mind, it’s far easier to leverage data collected and push it into a useful system in a format that’s relevant.

Essentially, the continued reluctance by incumbent software suppliers to integrate their technology means that they’re uniquely unsuited to leveraging the internet of things.

5. Cloud PLM works across the value chain

Digital transformation in the manufacturing space isn’t a single digitally savvy company. It’s about change at an ecosystem/supply chain level.

For example, let’s say you’re a huge company who makes container ships. Even if your digital systems are next-level fantastic, if your suppliers are still working on Commodore 64s your production is going to suffer.

That’s why cloud PLM is uniquely-positioned to lead a digital transformation effort.

It’s designed to integrate across multiple organizations. Unlike an ERP, which is an internally-focused software solution, cloud PLM is designed to foster collaboration across the value chain.

That means that the benefits of PLM digital transformation are shared across the ecosystem, and the more connected everyone becomes, the better off everybody is.

6. Cloud PLM works like non-enterprise apps

Finally, digital transformation is a lot easier when the software involved doesn’t feel like a hulking beast from 1999.

Cloud PLM is a relatively recent arrival to the software market compared to stalwarts like ERPs who have been around since the 80s.

But this is a blessing in disguise.

It means cloud PLMs don’t have a dearth of legacy code and creaking infrastructure.

It means that their interfaces are not reskins of crappy back-ends but are slick, fast, and user- and customer-centric.

A huge problem with digital transformation is the cultural fit.

To be blunt, people don’t like change and get cranky with you take away the tools they know.

But if you replace them with tools that work like the apps in the rest of their lives – apps like Instagram, Gmail, Amazon, and iTunes – then they’re a lot more likely to actually embrace the change you want.

Bullet point summary

  • Digital transformation for manufacturing SMBs is about using technology to change how people work, maximizing the use of data in business decisions, and connecting different parts of the value chain.
  • Cloud PLM connects disparate data silos and makes it easy to move information between different software solutions.
  • Cloud PLM is, well, cloud-based. This makes it vastly less expensive, faster, and easier to implement…
  • … ultimately driving a better ROI for business stakeholders compared to other software-led transformations, where it can take 3-5 years to see returns.
  • PLM digital transformation lets organizations close the feedback loop and actually leverage the data generated by the IoT and smart devices.
  • Cloud PLM improves not only the organization but the whole ecosystem, creating positive network effects and ultimately enabling the supply chain collaboration SMBs need.
  • Cloud PLM, because it’s a new product in the manufacturing tech stack, is usually better built and has a better user interface, delivering an experience that users will actually look forward to.

Ready for transformation? So are we. Get in touch and see how cloud PLM can help you in just 18 days.

Image credit: Raphael Schaller via Unsplash