Upgrades—A Key to Digital Transformation and Profitability

Upgrades—A Key to Digital Transformation and Profitability

The sustainability of PLM systems continues to be the biggest problem for major companies using PLM software. According to CIMdata’s commentary, Keeping Current: A Critical Digital Thread Requirement, “Technology obsolescence is a ubiquitous problem within companies that inhibits progress and can drag profitability lower.”

“Old and obsolete software often doesn’t have the functional capabilities and/or security that companies need to support their digital transformations. PLM enabling technologies are continuously undergoing significant technological transformations, so being able to upgrade to the latest release with minimal cost and technical friction helps companies build out and sustain their digital threads to improve business operations.” (CIMdata)

To better understand how companies manage their PLM upgrades, CIMdata has conducted a survey entitled “Deferred PLM Modernization Delays Time to Value”. Peter Bilello, President and CEO of CIMdata and a leading analyst in the PLM space, will join me on our Thought Leadership Webinar on Tuesday, April 13th to discuss the results of this study that surveyed current PLM customers using various vendors, exploring how often they upgrade and the impact delaying these upgrades has on companies.

How bad is the problem?

The study will tell us, but everyone in the industry actually already knows this—it’s really bad. And yet, easy to understand. Is your PLM system—that is, your product ecosystem, which can be many systems—on a current release(s)? A best practice would be to update every year with continuous minor enhancements every 6 to 8 weeks for larger deployments of one thousand users or more. Two years might be okay depending upon your competitors. But five, 10, 15, or more is clearly not. What that leads to are risky upgrades—mostly migrations or redeployments.

Spending millions of dollars and one, two, or even three years performing an upgrade or redeploying is an extremely poor business decision because you are still behind and likely no more sustainable than you were when you started. And that’s money that could’ve been spent transforming your business—empowering your people and processes to be more competitive.


“There are many negative impacts caused by older and unsupported software solutions. As far as improving business performance, the lack of new features and inability to enable an end-to-end digital thread are arguably the most critical. Solution providers regularly release new capabilities and often these capabilities can have a material impact on the business (e.g., addressing critical and changing security issues). For example, adding multi-BOM support can improve the integration of engineering, manufacturing, and service thereby reducing costs and improving customer satisfaction. Finally, deploying new capabilities faster will increase the ROI by shortening the time-to-value (TTV).” (i.e., keeping current)

Why Stay Current?

Those that stay current by upgrading are many times likelier to build out a strong digital thread. Keeping current results in greater efficiencies, more active collaboration, better cost of quality, stronger IP protection, and empowers organizations to use data as a weapon to increase innovation and drive closer connections with their customers. This, in turn, enables organizations to continuously respond to rapid changes in business for a competitive advantage, enabling them to use data, a digital thread, and other digital technologies to transform their products, services, and business needs to meet their future customer’s needs.

Staying current on a flexible digital thread not only leads to operational efficiencies, but also transforms the business itself so it becomes more resilient and can react to both opportunities and existential threats.

The ability to adapt with agility for less costs and with less risk is now fundamental to all companies that wish to compete in a faster, more connected, and uncertain world. You not only gain more operational efficiencies, but you’re connecting people across domains, throughout the lifecycle, the value chain, and even your customers over a digital thread that makes up your PLM ecosystem. And by staying current, you are protecting your intellectual property, improving your cost of quality, potentially your brand and dramatically reducing your cost to use data to drive decisions, to collaborate, to innovate, and to enable you to change how you run your business.

“For R&D and Engineering, the focus remains open, cross-domain collaboration, time to market, and product quality – digital tools like cloud, mobile, analytics, AI/ML, IoT, baked into PLM and an extended digital thread, enhance this platform approach. Our research shows that manufacturers investing in digital technology such as this generate more revenue and are more profitable than their non-digital peers,” said Jeff Hojlo, Research Vice President, Industry Ecosystems & Product Innovation Strategies at IDC


Why can’t they upgrade?

The simple answer is a company buys out-of-the-box (OOTB) PLM software, customizes to streamline their processes, and gets stuck with no easy path to the vendor’s next release. I call this “Instant Legacy.” Companies become stuck because the cost of the upgrade outweighs the benefit.

What if they just stay OOTB?

The idea of adhering to OOTB is that you configure the PLM tool and adjust your processes to fit the tool. The theory is that your processes are not that special anyway. The PLM software vendor, with hundreds of man years of experience in yesterday’s best practices, has it all figured out. When processes are altered to meet a technology’s capabilities, rather than the technology meeting the business’ needs, the technology actually becomes a hinderance to being more competitive. This rigid 1990s thinking will drown you in technical debt, chew up your profits, and leave you ripe for disruption.

Unfortunately, the hard reality is that the world—data, connectivity, emerging technologies—keeps accelerating and will continue at an even faster pace. This is only exacerbated by unforeseen events—regulations, trade wars, natural disasters, geo-political events, mergers and acquisitions, reorganizations, disruptive technology, a pandemic, and other unforeseen existential threats.

Your ability to pivot and optimize your processes is critical to surviving and thriving in an uncertain future. This makes staying current on a digital thread absolutely fundamental, but you’re not going to be able to do that on a legacy PLM. Your software should be adjusting and working for you, not the other way around.

Impact of Legacy PLM on Digital Transformations

I always hear “people are the problem” and “technology is the easy part.” I’ve led or been a part of many large global deployments in my career and the ability to align people is part of the job—it’s not an end-user problem. End-users suffer from legacy PLMs, plain and simple.

If everyone understands why they are transforming, the technology is user-friendly, and actually helps them do their job better, people want to be part of that. If they, as individuals, resist change, as many of us do, it’s because the perceived benefits don’t outweigh the pain they anticipate. The “why” doesn’t meet the threshold of their internal ROI.

The real people problem exists with those buying unsustainable legacy technology software and those that support this legacy mentality. You can’t transform against “mandates” that cause you to be stuck in the past. Being consolidated on a particular vendor’s solution in the past does not put you in a position to evolve as required. You’ll notice that in these organizations, there exists a lack of empowerment, lack of cross domain collaboration, a rigid culture, and you can bet there is no digital thread in place. In short, they’re tough places to work, but the market takes care of that.

Legacy PLM has a negative impact on your ability to transform. CIMdata does a nice job of articulating this:

“From an enterprise business perspective, the big issue related to obsolete software is that it makes digital transformation, sustainment, and addressing evolving security issues difficult and sometimes impossible. CIMdata is seeing many top-down digital transformation (i.e., digitalization) initiatives get stuck because many of the tools, solutions, and even platforms are out-of-date and unable to function as an integrated end-to-end digital thread. There is nothing worse for a project champion to receive an executive mandate to move ahead only to find out it’s impossible to execute the project with the existing outdated toolset.” (CIMdata)


Does the Cloud Solve My Upgrade Issues?

There are multitenant SasS offerings that push upgrades based on the solution provider’s schedule. And in some cases, you can opt out of certain features up to a point, before you become out of sync. The real question should be: can you customize the solution to meet your business needs and not interfere with those vendor-controlled upgrades? The answer, as far as I’m aware, is no.

CIMdata’s view: “Cloud-native solutions are the future but are not necessarily required for a successful PLM implementation. Choosing a solution only based on whether it’s cloud-native or not is like choosing a car based on the type of tires it has. It is an important criterion, but far from the only one. The most important criterion is whether a cloud solution meets all your business requirements appropriately, and how it will meet your evolving requirements moving forward. So far, most multi-tenant PLM solutions on the cloud are focused on specific industries and use cases and are not as flexible as many of the mature on-premises based solutions have proven to be.” 

Can the Vendor Keep You Current?

Aras’ customers upgrade more frequently than those using other PLM vendors. Aras provides upgrades as part of our subscription—in our Standard Edition, on-premise or in the customer’s cloud, or in our Enterprise SaaS edition, which we host in the cloud.

The Aras platform is both low-code and an enterprise PLM solution. Most of our customers were previously stuck on legacy PLM systems, which is a major reason for our explosive growth.
CIMdata’s full study isn’t released yet, but according to their just released commentary:



"CIMdata recently executed a research project on the topic of upgrades. We surveyed industrial companies to learn how long they keep their PLM solutions, how often they upgrade, and if customizations inhibit upgrades. An upcoming eBook entitled Deferred PLM Modernization Delays Time to Value and webinar scheduled for April 13, 2021 will discuss the results of the survey. Here’s a sneak peek of some of the survey results based on 86 unique responses representing 120 solution implementations."

                  

As you can see, Aras users stay more up to date than users of other solutions. CIMdata and Aras believe staying up to date on software is a critical element of a digital transformation strategy. Also, from the survey, Aras users have fewer issues with customizations inhibiting upgrades.

According to CIMdata:


“Aras has carved out a rapidly growing segment within the PLM market for industrial companies that want to stay current and have the ability to highly customize their solution to meet business requirements. CIMdata has written a lot about the Aras approach to PLM and our publications are available within our Aras Dossier. We have also written about how Aras supports customizations and is able to include free upgrades for subscribers. Aras has over twenty years of experience and a strong track record of delivering upgrades as promised, no matter the level of configuration perform on their platform. Aras’ latest release, which supports containerization on the cloud, will still allow the same level of customization and support for upgrades for all implementations, including those delivered via the cloud.”


What is My Conclusion?

The need for sustainable PLM is the only way to compete effectively in world of accelerating data, connectivity, emerging technologies, and uncertain disruption. To remain competitive, your PLM system (your product ecosystem) must be current. Not only should your PLM software be current, but it must provide a comprehensive and flexible digital thread. It must enable you to digitally transform—to adapt quickly and cost effectively thus both meeting the demands of your business while increasing its resiliency.

There is a direct correlation between boosting your revenues and profits and the agility to adapt, which can only be done if you’re current. Most PLM vendors haven’t met that challenge.
CIMdata found that "Aras Innovator subscribers keep their solutions more current than users of other mindshare leading solutions.” 

Aras upgrades our subscribers on their schedule, along with all of their customizations, including enterprise applications that they have developed, and we do it more frequently—in less time and with less cost than anyone else.

Anonymous