The Real Reasons You’re Defending Your Existing PLM

I’m always amazed at how old and lethargic some PLM and ERP systems are. I recently worked with a talented group of people to replace a large 30 plus year old Manufacturing Resource Planning (MRP) system along with a couple of PLM integrations, running releases that were 5 and 6 years old respectively.

Eleven years prior, I had asked, “Which ERP system are we using?

They told me the name of the ‘MRP’ system.

“That’s impossible—that’s the granddaddy of all MRPs.” It goes back to the beginning—we’re talking about an age when IBM ruled, pre-Bill Gates, eight tracks, droids searching for Obi-Wan Kenobi . . . we’re talking mainframes.

Nothing is impossible. Remember this—no matter, how ridiculous, people will always defend their baby.

Companies can get side tracked, both in terms of the product strategies and markets they pursue and in the IT strategies, processes, and connected technologies including PLM and ERP that they employ to support their digital and business transformation efforts.

The hard reality is that between 1995 and 2018, only 12% of the Fortune 500 remain. It is no surprise that digital is recognized by executives as key to their business survival over the next five years. At the heart of a company’s digital strategy and business transformation is their PLM system, which should be their platform for product innovation across their product’s lifecycle.

Yet, according to the PLMPULSE SURVEY – Edition 2017, only 40% of respondents state PLM is currently a key part of their digital strategy. The same survey points out that 86% of the users describe their PLM as “complex” or “difficult to use.” And 60% of their PLMs are focused on just Engineering.

If PLM is not a key part of your digital strategy, almost everyone finds it “difficult to use,” and it’s just used in Engineering, as the survey suggests, why would you keep it?

On one extreme, we have those that are frozen in time—PDM. The thinking is risk adverse and tends to be focused on Engineering. The arguments can vary: “the redesign is too complex,” “it takes too long to deploy,” and my favorite “we customized it; now we’re stuck.” On this extreme, the organization is typically caught in day-to-day tasks, year after year, until the money is gone. These PLMs are disconnected from their organization’s digitalization strategy. The legacy baby is typically old, and the answer to “Why?” has long since been forgotten. You can keep on renting movies or become the next Netflix—your choice.

On the other extreme—we have the nomads that followed the wrong Sherpa and are lost on a never-ending mystical journey in search of the Holy Grail and PLM enlightenment. Typically, leadership has invested heavily in these PLMs, but they’re a few million dollars and couple releases short from experiencing Nirvana. Time to value and the laws of physics have no real meaning here because this is a spiritual crusade. Typically, it is someone else’s fault, so there is a cycle of not learning from the pain of failure. Questioning this baby is almost sacrilegious because the culture can often turn cult-like. I admire their zealotry, but I’d avoid the Kool-aide.

The interesting thing about being in either extreme is that you’re likely part of an organization where you’ve already felt disruption, and it’s not pleasant. It is by definition an attack against your baby—the thing you built, your processes, your mindset and your status quo. The fatal flaw is dismissing the threat of disruption as being on the edge, and not a threat to your core. Companies like Amazon and Apple were dismissed by virtually everyone. “PC guys don’t make phones.”

What is missing in these extreme cases is the acknowledgement of failure. Borrowing from Ray Dalio’s book, Principles, “Do you have a radical, open-minded, transparent view of reality?” Do leaders admit their failures and learn from their mistakes? You can’t break free from an organizational inertia holding you down, unless you have a culture that values learning from your mistakes and learning how to make good decisions. The companies that know the value of a culture that enables meritocracy—allowing the best ideas to emerge, will be the one that end up with coherent innovation platforms that are in synchronization with their digital and business strategy. Otherwise, they are choosing to delude themselves with a false narrative.

Although this is blatantly obvious after the fact, it’s not easy to separate your own ideology and narrative from an unwelcome reality. In 1988, I demonstrated browsing engineering documents over the internet to my CEO and other leaders in a CAD software company. Managing documents, parts, product structures over the internet—good idea?

“How would we get the hardware sales?”

“Forget the hardware sales.” I replied.

“Crazy talk!”

When it’s your baby, that’s staring at disruption—it’s hard to accept disruption as reality.

I don’t believe you can sustainably bring innovative products to market, overwhelm your customers with operational excellence, and own your customer’s experience with legacy PLM systems that cannot keep pace with the latest connected digital transformation technologies. There is no room for legacy anything, least of all legacy PLM systems. They must be open platforms, flexible, connected, work end-to-end across the extended enterprise and cross discipline to meet the demands your customers expect. It is imperative that your PLM platform keep pace with technology. At Aras, almost 90% of our customers are on recent software versions. And we upgrade all of our customer’s customization for free. If you run a PLM system, you knew it would have to evolve, that it would require customization, and you would have to stay current on a platform that would enable you to be the most competitive and disruptive company, you can be.

Given that, are you on a current release? Would love to know your thoughts.

 

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