The best of both worlds

Under the title "The next stage of digital transformation in Germany: With cloud PLM to more product innovation and efficiency", a new study by the leading market research and consulting company IDC describes the current progress in manufacturing companies and provides suggestions on how the digital innovation potential can be further developed. The white paper, commissioned by Dassault Systèmes, is based on a survey of 100 German IT and business unit managers and describes the results in relation to the size of the company, the main areas of activity, and the industry and business units. In November 2017, this study was presented for the first time at the 3DEXPERIENCE Forum in Leipzig.

After considerable teething problems with initial digitalization initiatives, 2017 appears to be the year of the Industry 4.0 breakthrough. Today, every second company surveyed has already activated Industry 4.0 projects for operations in order to optimize processes or achieve efficiency improvements. "The employees in the various departments confirm that this increased level of maturity was also achieved in many places with the help of a uniform data platform that improved the exchange of information," reports Mark Alexander Schulte from IDC. If, for example, an unfavorable shape of a workpiece repeatedly leads to problems during production, this information can be "fed back" to product development much more easily. In this way, changes can be made much more quickly.

Integrate distributed data
However, there is still great potential for improvement in almost all companies along the entire value creation process. For example, 90 percent of respondents report that even today too much time is needed for coordination between departments and process steps in their company. One reason for this is the so-called data silos that are created when using completely different software systems. Often there are also small files in which the employees have stored their departmental experiences. All this data must be integrated and linked step by step.

However, Schulte also sees an organizational challenge: "Because the employees really have to be involved in these processes. This is the only way to encourage them to share their experience with their colleagues and to coordinate their efforts. "A successful digital transformation can only succeed if people are placed at the center," adds Andreas Barth, Managing Director EuroCentral at Dassault Systèmes. Companies therefore need to create an environment in which previously distributed knowledge can be effectively shared, with an integrative platform enabling the culture of innovation within the company and throughout the entire ecosystem, "so that decentralized decision-making and the ability of employees to self-organize and develop now set the tone. A huge opportunity for companies and employees!"

The use of these PLM platforms has also expanded significantly. The study cites current application figures of e.g. 51 % in development departments, 40 % in production preparation, 35 % production and 34 % in the area of maintenance/service. According to Schulte, this availability of information creates completely new dynamics, especially when partners and customers are also involved as know-how suppliers. Most of the companies surveyed therefore see an uncomplicated exchange of information with their ecosystem consisting of suppliers, partners and customers as the next important PLM function.

IDC believes that PLM will evolve into a product innovation platform so that new ideas can be initiated by all internal and external stakeholders and not just by the development departments. In addition, integrated quality and service information about product defects or customer feedback will be able to flow in. This integration of external stakeholders is also becoming increasingly important in terms of sustainability issues with their complex requirement profiles, for example when resource-efficient use of materials is considered.

State-of-the-Art with the Cloud
With these expanded tasks, however, the demands on the PLM system used also increase, making permanent adaptation work necessary. It therefore seems more advantageous to obtain the PLM software from the cloud instead of from the company's own data center (on-premise), which significantly reduces the effort required to set up and maintain the system. In addition, new functionalities are automatically added through regular updates, so that the state-of-the-art is guaranteed at all times. In addition, the costs are reduced overall - a great advantage especially for medium-sized companies.

According to IDC, these advantages also correspond to the ideas of decision-makers when selecting PLM software. Schulte adds: "Especially the faster pioneers in the direction of 4.0 are already using PLM from the cloud, so there is obviously a connection here.

It is therefore hardly surprising that 56 percent of the companies surveyed today obtain at least some of their PLM services from the cloud. IDC therefore assumes that this innovation-accelerating cloud procurement model will develop into the de facto IT architecture model of digital transformation in the medium term. It is also advantageous for location-independent data storage. However, in the case of CAD models, for example, very large volumes of data usually have to be transferred, which can slow down processes under certain circumstances.

Hybrid systems
On the other hand, security issues continue to be a counter-argument. "However, one should bear in mind that any data leakage would have a serious impact on a provider's core business," Schulte counters. "I would therefore dare to say that the data is more secure with a provider than in many companies on site; because security standards are implemented here that many companies can only achieve with great difficulty themselves." The majority of IT and business unit managers consider the EU General Data Protection Regulation to be an effective set of rules for the secure use of cloud services. Nevertheless, 83 percent of those surveyed see data storage in Germany as important. "Besides, it is not possible for most companies to switch to cloud operation at short notice anyway because of the structures of their existing PLM applications, which have often grown over many years," says Mark Schulte. An abrupt end to all existing PLM installations in the company's own data center is therefore not to be expected.

In IDC's view, a hybrid approach of cloud and on-premise services that combines the advantages of both models will therefore prevail in many companies in the coming years. That's why those in charge are advised to keep looking for the optimal balance that is currently possible. "We are experiencing that the interest of our German customers in using the 3DEXPERIENCE platform in the cloud is growing more and more, especially in medium-sized businesses," adds Andreas Barth, "especially the direct integration of suppliers is quickly possible with a cloud solution. If a hybrid approach is preferred, we work with our customers to develop custom-fit solutions that meet their individual requirements.

Finally, the study reminds us that the near future in particular will be decisive for industrial companies as to whether they will be among the winners of the digital transformation. That is why they should continue to strengthen their commitment.