This week, I had Peter Bilello on our Thought Leadership Webinar, presenting CIMdata’s PLM Upgrade Research: “Deferred PLM Modernization Delays Time to Value.” CIMdata’s independent research clearly confirms the extent of the problems with PLM sustainability among the three traditional PLM vendors. This demonstrates a stark contrast between Aras and the other three. The report is due out in later this month, but I thought I’d give you a preview and provide some of the slides that Peter presented.
- You cannot digitally transform with an obsolete PLM. You need PLM software that is current.
- Aras’ customers upgrade more often.
- Average time between upgrades is 1.5 for Aras and ranges from 8.3 - 12.43 years for competitors.
- Aras upgrades take less time—3 months compared to 11, 13, and 14 months.
- Aras upgrades cost less—$46K compared to $987K, $732K, and $1,251K.
- Aras Upgrades are less complicated.
- Aras has significantly fewer customization related upgrade issues.
- Obsolete PLM software impacts the bottom-line.
How do you digitally transform on obsolete PLM software?
The answer, of course, is you can’t. That was one of my questions to Peter Bilello, who agreed.
If the software you use to digitalize and transform your PLM ecosystem is obsolete, then your PLM software not only doesn’t help your competitiveness, but it’s actually an obstacle to your ability to transform, and is likely impacting both your top line-revenues and bottom-line profits.
“To be successful, companies need to have the right tool and be up to date to take advantage of the latest capabilities.” (CIMdata)
If your PLM software is not current, each of your users is less productive, less collaborative, and unable to use data to make strong data-driven decisions, negatively impacting your business.
“This research on PLM upgrades shows getting up to date and staying there can be expensive and time-consuming. Customizations are often an inhibitor to upgrading.” (CIMdata)
Says Peter Bilello, “I can’t say that I’m shocked that Aras’ customers are able to ’upgrade faster, easier and at less costs than customers of competitive products.’ But what’s striking to me is the disparity between Aras and the other vendors.” (CIMdata)
The Value Gap
According to the study, our major competitors, on average, upgrade every 8 to 12 years. This creates a value gap between those that upgrade—where their technology is closer to their vision—and those that do not. There is a dramatic difference between companies that stay current and those that do not.
Before joining Aras, I’d seen many examples of this. If you’re on a legacy PLM, you’re likely doing basic PDM, you have no digital thread, people in different domains are not collaborating in context, and you have no digital twin. It’s also likely that only a subset of your users are using PLM software, and only when they have to, because it’s an outdated tool.
When Was Your Last Upgrade?
Aras’ customers upgrade more often—71% within two years versus 32% from the average of our competitors. Aras’ low-code platform, which has enabled customers to build several hundred industrial applications, gets upgraded along with the many applications that span engineering, manufacturing, and maintenance, with all customizations. As part of the subscription, Aras guarantees all upgrades, including all customizations.
Average Time Between Upgrades
The following chart from the CIMdata research shows the average time between upgrades. Having been in the PLM industry for over three decades and having used all of these PLM solutions, I can confirm that the problem is well-known. Traditional PLM vendors are not architected to customize and upgrade. To complicate matters, they’re built on multiple technology stacks—many of them acquired, so there are further complications just within their own portfolios.
Of course, problems arise because every sophisticated customer needs to customize in order to optimize their unique processes and working methods, to give them a competitive advantage. But the reality is that once you customize traditional PLM software, you are stuck—unable to easily upgrade—and it's often difficult to justify an upgrade from obsolete technology because the ROI is not there. But wait, it gets worse! Your competitors don’t stop just because your PLM is stuck. All businesses need to adapt to meet their customers’ demands, new business requirements, and other existential threats to their business, like unforeseen change, disruptions, and an accelerating use of data. Every company needs to adapt, but that’s not going to happen on technology that’s eight years old, is it?
How does your business digitally transform if you’re eight or twelve years behind? The very system that should be the underpinning of your continuous transformational efforts is now the major obstacle to change.
What is the cost in productivity from using outdated technology? I just did a quick search and found that the average employee loses about 40 minutes of productivity a day, which translates to $3,930 annually. If I assume I have 5,000 users, that would be $19.65M per year. (Ladder.com 2019)
I personally think that’s just the tip of iceberg, because when you’re on a legacy system, not only are you wasting time, but your disconnectedness is hampering your ability to collaborate with others in different domains on product related issues in-context— causing others to be equally unproductive. In these scenarios, the contractor, and less senior employees are often tasked with using the obsolete PLM because the more knowledgeable employee isn’t going to waste their time. This leads to all sorts of additional workarounds (i.e. duplicate parts), typically resulting in quality issues, reduced time to market, and serious disconnects with other disciplines and groups up and down the lifecycle and across your supply chain. IP issues are also more prevalent with outdated technology, which can have a devastating impact on a company.
Ultimately, this impacts your customers, your revenue, and your profit.
Average Time Elapsed During the Last Upgrade
How much of a disruption is this? Apparently, on average, it takes more than a year. The research doesn’t specify an upgrade versus a migration or redeployments. I’m personally aware of a first-time deployment that went on for nine years. I’m assuming they took some breaks, reorganized a few times, etc. And on upgrades, I know of a few that have gone for more than two years and consumed a large number of IT and functional resources.
The question to consider is Time to Value (TTV)—what if you were to spend the money on something that provided a quicker return? The shorter the upgrade, the faster the time to value.
Aras averages three months, which we were aware of and are working on approaches to streamline the upgrade process.
There was a question on the webinar about how the cloud impacts upgrades. The theory is that the vendor pushes an upgrade, so you will stay upgraded. As Peter explained, this doesn’t alleviate the problems of upgrading a customized deployment.
Aras is now offering an Enterprise SaaS solution with unlimited customization. This is a containerized version of the Aras Platform in the cloud. With our Enterprise SaaS comes DevOps and an automated test script framework enabling each customer to develop test scripts. I believe all of our cloud deployments now have this capability. This is important because it enables us to run those scripts and find any bugs rapidly so, in our case, upgrades from the cloud should be even faster.
This may not be a fair comparison to the others because Aras focuses on performing the upgrades and designed the Aras Platform to be resilient—unlimited customization. We guarantee the upgrades, no matter how large or sophisticated.
Average Cost of the Last Upgrade
The chart below should be an eye opener to any CIO and especially any CFO. Can you really get a ROI using traditional PLM if it costs you between $732K and $1.25M? What’s the rationale for sticking with that strategy?
Compared to Aras, this research shows PTC’s cost to upgrade is almost 16 times greater than Aras, Dassault over 21 times more expensive, and Siemens over 27 times.
To be fair, our upgrades are included in the subscription and our business model is heavily focused on the customer in the sense that we sell one platform—Aras Innovator, an enterprise PLM platform with all applications included. These applications and any other industrial-grade applications the customer or a third party wishes to develop are built on top of our resilient low-code platform. When we acquire technology, we incorporate or rewrite it into the platform. The architecture, the business model, and our culture is what makes the difference.
Our architecture and large upgrade and support staff are key factors in our upgrade success.
Another contributing factor is our culture, which seeks a more equitable and transparent relationship with our customers. As an example, our Aras Roadmap is on the web—the same roadmap development uses and updates: https://www.aras.com/en/roadmap. I believe the average Aras customer is more informed and armed with more information for their own roadmap and digitalization/transformation efforts. This leads to better planning heading into their upgrades and helps both of us, creating a tighter relationship.
How Complicated Was the Upgrade Process?
They should have included a category for “Very Painful.” The following chart speaks for itself. The other PLM vendors scored a combined 39 customers that found their upgrade processes to be “Very Difficult” compared to none of Aras’ customers. The conclusion CIMdata draws is that “Aras upgrades are perceived as less complicated.”
Are Customizations Inhibiting Upgrades?
Interestingly, Aras and Dassault Systemes customers almost had inverted results—87% of Aras customers found that customizations did not inhibit their upgrades versus 82% of the 3D Experience company’s customers who found that customizations were inhibiting their upgrades.
And I promise you, we are taking concrete steps to get markedly better.
From its inception, Aras was designed to be highly configurable, customizable, and upgradeable with the ability to also build industrial-grade applications, that are also upgradeable.
In today’s world of accelerating complexity, data, connectivity, and unforeseen challenges, companies need PLM software that not only provides a digital thread and an open environment with connections to other pillar technologies, but also one that can adapt as you require—one that enables your digitalization and digital transformation efforts, not inhibits them. “To be successful, companies need to have the right tools and be up to date to take advantage of the latest capabilities.” (CIMdata)
According to Peter Bilello, “Customers of the Aras PLM platform stated that they are able to upgrade faster, easier, and at less costs than customers of competitive PLM products.” (CIMdata)
If you’re stuck on a legacy PLM, if your lack of a digital thread is holding you back, if your product ecosystem is inefficient, do your leadership a favor—forward this to them.
And have them attend ACE on April 19-21.