At times, an executive considering major software purchases will mandate buying out-of-the box (OOTB) software, believing it a best practice. They think it will reduce their costs and the mounting number of obsolete technologies that consume their enterprise landscape. This, of course, sounds good, but it’s based on false assumptions and outdated thinking.
“Traditional build-vs.-buy thinking underestimates the complexity and cost of packaged solutions as well as the value of platforms and their ecosystems. And it overestimates the cost and complexity of modern custom development as well as the similarities between firms in a truly adaptive digital environment. In the digital era, software is an expression of the business. Firms can’t buy this; they must create it using a blend of customization and composition.” (Forget About Build Versus Buy; Your Choice is Customize Or Compose, Joe Cicman, John Bratincevic, and John Rymer, April, 2021)
The OOTB Pitch
The problem with OOTB software is that it lives in the past and can’t anticipate the future. The logic an OOTB software vendor uses is that they have digital technologies for your real-world business challenges and it will cost less. That’s blatantly incorrect. When a vendor like Aras provides free upgrades, including all of your customizations, the deployment, the upgrade process, and the overall operational efficiency of an enterprise is significantly improved along with a total cost of ownership that should be approximately 30% less.
If an OOTB software vendor has everything you need to currently operate your unique processes, that’s great—but you’re still left with the limitation cause by the fact that you and your software vendor cannot anticipate everything the future might have in store. Even if you continually sub-optimize your processes to meet the vendor’s limitations, you’ll run into other best-of-breed applications that require you to stitch multiple products together, resulting in a very rigid product ecosystem and a broken or inefficient digital thread. And finally, when you look for examples of where this is working, you won’t find any—there are no successful OOTB deployments in large, complex companies.
Velocity of Change
Just think of the acceleration of the amount of product data and velocity of emerging smart, connected technologies, and understand it’s only getting exponentially faster. It is paradoxical to try and circumvent the costs of legacy technology by going OOTB, when you will inevitably need to customize it, thereby creating a system that can’t be properly upgraded, resulting in more legacy.
Every Company is Unique
OOTB underestimates your uniqueness, like using a one-size-fits-all pair of pants for people of drastically differing sizes. Companies manufacture and deliver complex products and services with variable amounts of software applications, coupled with users working in different roles and disciplines who deal with changing processes and other transforming technologies and data models. Your people and your corporate processes will not all fit into one static OOTB PLM software. Every company is an extension of the PLM platform they use—it impacts how their own people collaborate. When used correctly, the platform connects their products in the field with the rest of the enterprise (Digital Twin), thus creating better and more profitable user experiences.
With OOTB, invariably what happens is that a company will start out with the best of intentions but then is forced to customize PLM software that is only designed to work OOTB, creating what I call “Instant Legacy.” Once you’ve done this, it becomes so costly to maintain and upgrade that, ultimately, it’s simply too much.
CIMdata Upgrade Research Study
There are now proof points that demonstrate what happens when you focus on features and functions as opposed to an open, flexible, and upgradable platform. This is what has happened in the PLM Industry. According to a study conducted by CIMdata, “Dassault Systemes’ and PTC respondents averaged more than eight years between upgrades, and Siemens’ respondents were just over twelve years.” Customers have to pay for these upgrades too. “The average costs for respondents from Dassault Systems, PTC, and Siemens were just under $1M, just over $700K, and just over $1.2M respectively,” and the time it takes you to upgrade these vendors’ PLM software is 11 to 14 months.
The reason for this inability to customize and upgrade are purchasing decisions that prioritized features and functions based on the present, versus ensuring an ability to sustainably customize and compose for the future. This type of thinking seriously underestimates the acceleration of data and the ubiquitous nature of emerging technologies, along with the impact it has on changing business models.
In the case of Aras, where the cost of upgrades is included in the subscription, Aras is both an enterprise PLM software and a low-code platform, allowing companies to make massive customizations with Aras guaranteeing the upgrades. According to CIMdata, the organization using Aras to upgrade averaged less than $50K in cost and three months in time for us to complete. If you consider that Aras encourages people to configure and customize, the conventional wisdom would be that costs would go up, but it’s just the opposite. In their study, CIMdata finds that Aras’ customers perform major upgrades every 1.5 years compared to 8 to 12 years with our competitors. This is because Aras is a resilient platform designed from its inception to be customized and upgraded—open and accessible. Additionally, the Aras business model is designed to be more focused on our customers’ success and expansion. Ask yourself: why is Aras the only vendor that encourages customers to both configure and customize, build applications from scratch, and is willing to take on the upgrades as part of the subscription? Aras is different. We’re designed to help our customers future-proof.
The Future Is Unknown
Even if OOTB can currently compensate for your processes and people, it won’t be able to do so for long. The reality is that OOTB cannot predict everything you’ll need in the future. The future is an unknown, so you need the ability to adapt with speed, resilience, and agility. Your destination is not yet defined; you can’t expect OOTB software to support all of the capabilities and processes you don’t yet know you need.
Customization will be required with whatever solution you choose. This necessitates the flexibility of a low-code platform and the ability to sustainably configure and compose. Likewise, it is crucial to be able to adapt at lightning speed, to keep pace with innovation and the ever-increasing acceleration of data.
Digitalization at scale requires a platform that allows you to build custom applications to replace legacy role-based applications to enable everyone to collaborate more effectively and to easily connect to many systems.
Instead of OOTB, the focus should be on a PLM platform that is open, flexible, scalable, and upgradable—a low-code platform that has a sustainable way to customize and compose, to build applications, change processes, and interfaces. The platform must have an inherent digital thread with the ability to expand far beyond engineering to include users across all disciplines, the product lifecycle, and extended value chain. It should also enable you to sunset legacy applications by incorporating them into a PLM platform, thus reducing your technical debt while expanding collaboration and innovation across your enterprise. Aras Innovator is a digital transformation platform, giving your company the ability to continually adapt to business challenges that are not yet known. It absolutely should be current, to take advantage of emerging technologies and new capabilities that are not yet in existence, to weaponize your data and make better data-driven decisions. By following this more sustainable path, you are future-proofing your business and, in the process, improving your bottom-line profits and top-line revenues..