I have always been a J R. R. Tolkien fan and after watching Amazon Prime’s The Lord of the Rings: The Rings of Power series I have been ruminating on the lessons from the books and how they apply to the current state of the Product Lifecycle Management (PLM) market.
Consider Oracle’s recent move to eliminate the 9.3.7 release from their Agile PLM roadmap to go all in on a cloud-based solution that shares architecture with Oracle E-Business Suite (EBS). Or SAP and Siemens partnering up on PLM. Or the emergence of Microsoft offerings touting their tight PLM integration to their Enterprise Resource Planning (ERP) platform Microsoft Dynamics.
It seems the PLM grandfathers are resurrecting the goal of trying to run their legacy business application on one platform.
The Endless Quest for a Single-Platform ERP/PLM
The objective of a single PLM and ERP platform has always been particularly appealing to IT types at product companies still using legacy systems. It’s clear why those responsible for maintaining business systems would find this approach attractive — their users don’t have to move anywhere, while the tech stack gets reduced.
But much like the One Ring in The Lord of the Rings, this quest can lead to unforeseen struggles. These can include the destruction of productivity, and the overarching control can require extreme compromises that can hinder the business’s ability to maximize profit and minimize time to market in product development. For instance, a lack of familiarity with the user interface can inevitably lead to data silos as more users feel pushed out of the system or they try to move faster than the system by circumventing it altogether, which defeats the purpose entirely and creates more manual work.
Some companies might also seek to save money by having one platform — and it is possible the cost savings could be significant, especially for Microsoft users. However, I would predict the loss in productivity from using limited PLM solutions would quickly cancel out these cost savings by severely hindering these companies’ ability to effectively develop and release new products on time. Some of the hidden costs of these systems can include:
- Expensive system upgrades critical to not only efficiency but also security
- Limited configuration options to meet changing market needs
- Longer processing times and workflow gaps leading to launch delays
One of the main reasons Oracle acquired Agile PLM in the first place was because they failed to develop a successful PLM platform. Moreover, I feel certain SAP’s motivation in partnering with Siemens is due to their inability to successfully create a single ERP/PLM platform of their own.
In The Lord of the Rings, the evil Lord Sauron creates the One Ring to ultimately control all the others and to bring them under his sway. While I don’t believe a single platform for PLM and ERP is evil, I do believe the tyranny of the platform could lead to some serious issues for those trying to use one platform for both purposes.
Where Others Have Failed…
What has changed since these previous attempts to create a single platform? The answer is the advent of cloud-based enterprise business applications.
Historically, Oracle was limited by the complexity of its architecture. Only very large companies with sophisticated and large IT organizations could support Oracle’s infrastructure requirements.
With Oracle’s new cloud-based infrastructure this limitation goes away. Unfortunately, users are still dealing with an application that is ill-suited for both ERP and PLM.
While the architecture issue alone is daunting, Oracle’s past failures around PLM were bigger. The main problem is that the architecture was designed for ERP and they attempted to adapt and extend it to meet the needs of PLM users. The tasks performed by an ERP are largely black-and-white and transactional. It’s not feasible to stretch this same architecture to perform with the complexity and volume of data that PLM systems manage, not to mention the rapidly changing and collaborative nature of PLM processes.
This is still true today as there are significant gaps between the functionality of Oracle’s cloud-based PLM and Agile PLM. It is telling that only a handful of customers have migrated to Oracle Cloud from Agile PLM despite Oracle’s aggressive attempts to incentivize their customers.
While I am sure Oracle will eventually add enough functionality for companies to run their PLM functions on their new platform, I am also certain it will never be as successful as a dedicated PLM application and the potential advantages of Oracle’s one platform will never offset these shortcomings.
Companies running on these types of legacy platforms will always be at a disadvantage versus companies using a “best in class” approach.
All Roads Lead to Digital Transformation
Technology has evolved to the point where integration of PLM and ERP has become very straightforward, and it is no longer the headache it once was for IT organizations.
Most enterprise-level applications are migrating to the cloud and the underlying technology for these solutions makes it very easy to link Application Programming Interfaces (API) for robust data exchange.
This nullifies one of the main advantages unified architectures promise. The seamless exchange of data is no longer an issue.
In the modern landscape, it’s a foregone conclusion that cloud-based applications will continue to dominate the landscape of PLM and ERP and companies leveraging on-premise solutions will be forced to move in this direction.
Some concerns around cloud-based solutions include security, performance, and the ability to customize to meet business needs. I’d point out that Salesforce has been developing cloud-based solutions longer than any of the legacy business solution providers. Given their long history in the market, they have a massive head start on addressing these issues.
The Salesforce platform is recognized as the gold standard for cloud architecture, and they have enabled this architecture to allow other companies to develop solutions on it. This is the best of all possible worlds.
Companies can leverage technologies that are purpose-built for their business needs on the highest quality cloud platform available without having to compromise on functionality.
The Next Chapter for Legacy Users
At Zero Wait-State, we’ve identified a promising solution, a Salesforce-based application that addresses business needs before release to manufacturing. Propel Software is a purpose-built PLM solution that leverages all the capabilities offered by a modern cloud architecture while still mapping very closely to the needs of traditional PLM solutions like Agile PLM.
Moreover, the user experience is intuitive for Agile PLM users, making for a very smooth transition. The developers of this application have also taken full advantage of the cloud platform offering a modern interface and a collaborative open architecture that lends itself to wider adoption. The API framework for Salesforce is very robust and several third-party solutions make integration to ERP even more straightforward.
Much like the conclusion of The Lord of the Rings, I expect the push to consolidate ERP systems with PLM will be foiled once companies fully grasp the limitations of these legacy providers’ single-solution attempts.
The flexibility that comes with a dedicated system specifically designed to meet the needs of PLM users will outweigh IT’s desire not to ruffle feathers. Ultimately, companies need to leverage every advantage they can to remain competitive and maximize profits and quality.
The world is rapidly changing, and companies cannot afford to be limited by large systems that are unable to adjust to meet their needs. I look forward to the dialogue around this subject and hope we can help companies make the right choices for their product development solutions.
Explore Propel Software.
Steve Porter is CEO of Zero Wait-State, an industry-leading strategic partner that helps businesses develop and sustain an effective product lifecycle management (PLM) approach. Learn more about their services.
