Any hesitation organizations had regarding the criticality of digital transformation ended when COVID-19 made digital transformation a foregone essential. Despite the commitment organizations have to it, digital transformation initiatives still often fail.

The pandemic highlighted the need for organizations to digitally transform their underlying product ecosystems, and the product lifecycle management (PLM) software that supports it. This new type of “inside-out” digital transformation is based on more iterative, agile transformations that focus on data-driven efficiency, removing obstacles to collaboration and enabling customer-driven innovation.

Unfortunately, many companies cannot use their existing PLM software to digitally transform their product ecosystems to meet their customers’ future needs. The overwhelming issue is the pace of change is only accelerating, and companies must keep up. This includes emerging technologies, connectivity, market conditions, unforeseen disruptions and an explosion in the types of product data necessary to compete. Given this trend, there are four common roadblocks that prevent legacy PLM software from being used to digitally transform a product ecosystem: Out-of-the-box software (OOTB), obsolescence, technical debt and the lack of commitment to sustainability.

Out-of-the-box software

The primary reason PLM has hindered digital transformation initiatives is because many companies are relying on vendors that have used a portfolio of OOTB software with limited ability to configure and no ability to sustainably customize. The obvious problem is no software vendor can predict the future. No software can account for all the disruptions a company will face. Instead, what is required is a PLM platform designed for change — a platform that can sustainably customize and build applications without waiting on the software vendor — one that supports a unique digital thread with traceability across the many domains that make up an enterprise.

Obsolescence

The additional problem related to OOTB software is when it is customized, someone is creating an instant legacy. A recent CIMdata PLM Upgrade Study found customers of some PLM software vendors were averaging eight to 12 years between upgrades. A major source of this technological obsolescence the need to customize to meet business needs with PLM software not designed to handle customizations, while maintaining the ability to be upgraded. Companies found it difficult to continually justify expensive and highly disruptive upgrades.

Instead of a platform for digital transformation, many companies are stuck with obsolete PLM software forced to alter their processes to fit the technology, rather than using the technology to optimize their processes. If a software vendor offers a low-code platform as part of their core PLM platform that can customize and build applications from scratch, and they do not offer the upgrades as part of their subscription, it is highly unlikely the user will be able to stay current.

Technical debt stunts innovation

Not only do obsolete PLM systems cost more to maintain and upgrade, they increase technical debt — the spend on maintaining legacy versus digital transformation initiatives. A PLM platform that can flexibly and sustainably customize and build new applications can sunset legacy applications and connect disparate domains across the enterprise, resulting in greater operational efficiency and improved collaboration that will drive more innovative products and operations.

Lack of commitment to resilience

For years, companies have acquired best-of-breed solutions to solve departmental problems and then integrated them. If there were no mergers, no acquisitions, no reorganizations and if the world stood still, that may have worked. However, the reality now is a world of accelerating change, unforeseen disruption, the confluence of many technological breakthroughs, unprecedented growth in terms of connectivity and the different types of data being used on more complex and personalized products. If they expect to improve their agility and business resiliency, companies must adopt a greater commitment to taking a more sustainable platform approach.

“By taking a sustainable platform approach, organizations are enabling the enterprise to get their work done in the most efficient way possible and can ensure end-to-end optimization and connectivity critical to an organization’s digital transformation,” said Tom Gill, a senior consultant at CIMdata.

Continuous digital transformation is mandatory to succeed in the future. This is driving organizations to rethink what they need from their PLM software. It should not be an antiquated engineering tool that impedes efforts to transform and expand the product ecosystem.

What is required is a PLM platform that is open, flexible, scalable and upgradable by the vendor — a platform that encourages customization, encourages the user to connect their data, their processes and their people, with the ability to adapt to meet changing business conditions. A PLM platform should be the digital transformation platform.

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