A few weeks ago, I came across a tweet that caught my eye.
I thought that looked pretty interesting. I hadn’t heard from the Oracle folks in a while. So I then headed over to look at their blog post. I started reading and, apparently, they’ve been talking about this ‘Product Value Chain’ concept, which linked from that post off to Oracle’s corporate site. From there, I got a little better idea of exactly what they were talking about. Here’s a brief excerpt.
To manage growing product complexity and innovation challenges, product-focused applications such as Product Lifecycle Management (PLM) and Product Information Management (PIM) solutions are becoming staple IT investments. But as product information continues to span more and more functions inside the company and out, these implementations are not only expanding enterprise-wide; they are adding integrations, functionalities, and touch-points to serve new needs in a fully connected world. We call this progress the Product Value Chain, an integrated business model powered by Oracle that offers rich new strategies for executives to collectively leverage enterprise Agile PLM, Product Data Hub, Enterprise Data Quality for Products, and other industry leading Oracle applications to achieve further incremental value.
Below this excerpt, they included a little chart showing that Product Value Chain Management is an evolution beyond Product Lifecycle Management. I thought to myself, “wow, they must have something truly revolutionary here.” So I started digging, investigating and looking into what this next step in the evolution of our industry is all about. That’s what this post is all about.
Here, you’ll find a little bit of background on their vision and the Oracle product behind it, the capabilities of those products as well as my own commentary and analysis.
It seems as if Oracle’s vision about Product Value Chain Management is relatively new, although they may have been talking about the concept for some time. Per their site on the topic, here’s an excerpt that describes how they define that vision.
Managing the entire Product Value Chain with Oracle empowers business leaders with accurate information instantly to make the best decisions at any point, from any perspective, of a product’s life cycle. Companies can evolve fragmented engineering and design processes into information-driven product value chains with best-in-class development processes and capabilities, global 360-degree visibility, and real-time collaboration. By integrating the solutions that manage the inherently connected product, demand and supply chains, companies can transform their engineering and R&D operations from siloed necessities to world-class, information and value-driven competitive advantages delivering on both innovation and operational excellence.
This vision is powered mainly by three products: Agile PLM and Product Data Hub and Enterprise Data Quality components of their Master Data Management solution.
Agile PLM was originally developed by Agile Software Corporate, which was acquired by Oracle in 2007 (wikipedia entry on Agile Software Corporation). Oracle’s Master Data Management solution has evolved over time both organically through Oracle’s software development organizations as well as through acquisitions.
OK. Let’s get a little deeper into how Oracle’s product support their proposed ‘revolutionary’ vision of Product Value Chain Management.
If you’re familiar with the common definition of a PLM system, then you’d probably be familiar with many of the capabilities provided by Agile PLM. However, there are a few additional capabilities that might surprise you.
- Product Data Management: Agile PLM provides most of the capabilities needed to manage mechanical CAD data, documents and the like. However, they don’t go as deep as some other PLM systems go in terms of managing the entire mechatronics product record.
- Workflow: As you would imagine, you can build and execute workflow processes. The workflows interact with various ‘things’ like change orders, quality inspection sheets and the like.
- Scheduling and Resourcing: Agile PLM has its own scheduling and resourcing capabilities (think project management). However, back in 2008, Oracle acquired Primavera, a Product Portfolio Management (PPM) software provider. If desired, you can use Primavera’s more comprehensive PPM capabilities instead.
- Customer Needs Management: This set of capabilities enable an organization to traditional requirements management definition and flowdown you commonly see within product management organizations. However, there are additional social capabilities where there are tag clouds, discussion threads and voting that let the product management organization collaborate on those requirements.
Agile PLM comes in a number of different industry specific flavors including ones for process and pharmaceutical. These industry specific solutions provide capabilities suited specifically for those industries like recipe management or FDA regulatory compliance. But in this post, we’re focusing on the fit for discrete manufacturers.
Product Data Hub
This Oracle software product provides Master Data Management capabilities. For a little context, you can find lost of information about Master Data Management solutions on its entry in wikipedia. In short, however, a MDM solution defines and manages a single source of truth for information. In this context, that would be the ‘golden’ product record. It can then drive that single definition into other enterprise systems. This is especially valuable if you have multiple enterprise systems with duplicate information, which opens up the possibility of information that is not in agreement, meaning that one set of information is incorrect. This becomes particularly dangerous when product development decisions are made off that information.
Oracle’s Product Data Hub provides a comprehensive set of capabilities in terms of MDMD. Specifically, it includes:
- The ability to import information, clean it and compile a ‘golden’ product record. Basically, you can bring in information from all sorts of different sources to create a definition for your products.
- The ability to manage and change to the ‘golden’ product record. Essentially, you need to define when, why and how it can be changed. Product Data Hub also provides a workflow system to enable a process to drive those changes.
- The ability to share the ‘golden’ product record to other enterprise systems via service oriented architectures (SOA) and XML templates formats.
So essentially, the idea here is to compose a single source of truth for the product by importing information from various other enterprise systems. Once composed, you can clean it up and define how and why it can be changed. Then you can push that definition out to all of your other enterprise systems.
Supporting the Vision
OK. Now that we have an idea of the capabilities that Oracle’s products provide, how exactly does it support their vision? Before we dive into that, let’s make sure we understand their vision.
To start, let’s understand how they look at product development. They say that product development is a cross-organizational process. All sorts of enterprise views on the product must be taken into account during the development process. You need to not only see the engineering view with respect to form, fit and function. You also need the impact of development decisions on procurement, service, manufacturing, operations and many other organizations. Because this is true, you need to make product information that exists in each of those different organizations accessible to every other organization. So procurement needs to see and understand the relevant information from engineering, manufacturing and other organizations so they have complete context. As a result, decisions are made in full context. If you don’t have that, then you are making decisions without understanding how it could negatively impact the rest of the development process.
But furthermore, those cross-organizational processes need to be executed in an automated fashion across multiple enterprise systems. Oracle has built out integrations between their different enterprise ‘applications’ that includes ERP, PLM, CRM and much more. Also, they have built out integrations with other enterprise systems to work in a similar fashion. For example, they’ve done this in a way such that when a problem gets reported as part of a quality management system, it initiates a change process in PLM. And when the change is approved and ready to be implemented, the PLM change process send inventory dispositions to the ERP system.
Commentary and Analysis
OK. Now we understand what Oracle’s products can do. We also understand how it supports their vision.
Engineer’s Need for Enterprise Information
First off, let me say that the folks at Oracle are dead-on right in one regard. Design as well as broader product development is an enterprise game today. Decisions in development must take enterprise considerations into account. A little while ago, I wrote a post titled What’s the Killer App for the Modern Engineer? that talked about this in the context of the engineer. Here’s the most relevant excerpt.
Another extremely challenging aspect of an engineer’s job is dealing with all of the enterprise systems across a product’s lifecycle. Most likely, design artifacts are managed within PDM or PLM. Released product records exist in Enterprise Resource and Planning (ERP) systems. Individual supplier and supply chain network information is captured in Supplier Relationship Management (SRM) and Supply Chain Management (SCM) systems. Customer data resides in a Customer Relationship Management (CRM) system. The list could go on and on. The important point though is that the engineer needs to access information in any and all of these systems to lead the day-to-day company wide effort to resolve product issues. The frequent means to doing that is to go find someone with access or have the engineer maintain 10 different login identities, which is unreasonable.
And this isn’t only true for engineers, it’s true for just about anyone involved in product development including manufacturing engineers, procurement agents, service planners and the list goes on and on. In my eyes, the problem that Oracle is trying to fix here is imminently valid.
Is the Problem Access or Duplication?
While I agree that getting information to various roles in the development process is critical, I’m not sure the folks at Oracle and I are on the same page in terms of the underlying problem.
On one hand, you could argue that the underlying issue is access. Product information might exist in various enterprise systems, applications, files and share drives all over the place. Getting that information to everyone can be extremely challenging. In many cases, those roles probably have no idea where the information exists, much less have an explicit problem getting to it. If that’s the big issue, then MDM might seem like an overdone solution. There are some lightweight alternatives like Inforbix, which I reviewed last week in a post titled Inforbix: Access to Enterprise Information for the Engineer? as well as the emerging alcove9 (corporate site) that can crawl and index information in enterprise systems and drives to expose information to anyone that has access rights. Furthermore, something like Actify’s Centro can create a 3D mashup, which I also reviewed in a post titled Actify’s Centro and Microsoft’s Sharepoint: The 3D Mashup that can expose enterprise information to more stakeholders in a different way.
Now, if duplication of product information is the problem, well then, tools like Inforbix, alcove9 or Centro won’t solve the problem. And that certainly can be a legitimate concern. With all the mergers and acquisitions going on in the manufacturing space, there are often duplications of enterprise systems that somehow must be integrated in some fashion. Master Data Management (MDM) solutions like Product Data Hub can help solve that problem.
How Important is Integrated Data and Processes?
Two weeks ago, while at COFES out in Phoenix, I led an analyst discussion on exactly this topic: Decoupling PDM from Process.
You see, since the time PLM solutions were first launched, many have been preaching the virtues of integrated product data and development processes. And the advantages in doing so were mostly self-evident. If you’re executing a process and need to reference some product information to make a decision or complete a task, you needed access to product information that is accurate. If not, you risk making decisions off inaccurate product information. And that’s a practice that can result in downstream errors. The implied solution is that you must have a single solution to manage your product information and development processes.
But a funny thing happened along the way. Many organizations spent inordinate amounts of time and money trying to deploy PLM systems to manage product information and development processes in a single solution. Very recently, a rash of solutions have emerged that don’t require product information and development processes to be managed in a single location. Autodesk released PLM360, which I reviewed in a post titled The Devil Must Be Cold: Autodesk Launches PLM Product Nexus. Kenesto announced plans to launch their product, which I reviewed in a post titled Kenesto: A New Take on PLM. Nuage is in the midst of launching their product as well, which I reviewed in a post titled Nuage: The First Social PLM System? The key difference in each of these cases is to loosely link or couple product information and development processes. Make it possible for the stakeholder to find the information instead of requiring the information to be managed in the same system as the development process.
Does consolidating and compiling a single source of truth of the product record sound like a good idea? Yes. But I think the traction of recent PLM solutions that are decoupled from product data shows that there is a little bit of blowback in the market against solutions that require you to ‘put it all in one place.’
Enabling Cross Organizational Proceses
One point that I do favor is their concept of cross organizational processes. I think their PVCM vision acknowledges a reality of organizations today. Even though it might not be automated, I think today’s processes already cross multiple enterprise systems. They’re just done so in a manual fashion. For smaller enterprises, this may not be that big of a deal. When you have fewer people, it’s easier to communicate what needs to get done. But in larger companies, especially ones that have gone through multiple mergers and acquisitions, you probably can’t just walk down the hall and remind that guy in procurement to update the approved vendor list or one of a million other cross-organizational process examples you can think about.
While I like this idea in concept for larger companies, I can’t help but think about flexibility. When I talked with the folks at Oracle, these cross organizational process that span multiple enterprise systems were enabled by integrations. Obviously its good to have such integrations across Oracle enterprise applications. However, the permutations represented by all the potential combinations of different enterprise systems that are out there is monstrous. From an Oracle development perspective, that is a lot to keep up with, even though it mainly uses SOA approaches. Furthermore, these processes can morph and change. How flexible are these integrations? If you start to look at this PVCM vision for your company in a serious way, you’ll need to have some very frank discussions along these lines.
Big Box Enterprise Systems vs. Granularity
Another point to touch on here is the recent trend towards granularity. I wrote on this topic not long ago in a post titled Point Solutions, Integrated Solutions and the Granularity Value Proposition. What’s the idea behind granularity? Here’s the excerpt for that.
So what’s the concept here? Actually, I originally heard about this concept from Oleg. And he’s written about it time and again at his blog beyondplm.com, but the fundamental idea is that you layer on different solutions that each do something very specific and well. Basically it is the point solution approach but from an ecosystem perspective. It would include something like leaving your workgroup PDM software in place. Layer on top of that a workflow. Then add some social computing solution for collaboration. Then you can add in a project management solution. You get the idea. Leave what you have in place. Add in other point solutions where needed. And integrate them as lightly as you can.
Why is granularity emerging?
So why take an ecosystem approach with point solutions? Well, I think the answer to that question is a whole lot more about someone’s history with PLM than anything else. You see, there’s a host of people out there that have championed a PLM solution. They introduced the concept to the company. They got it purchased by an executive. They were most likely the lead in getting it deployed. And it some of those cases, it failed. Not all. But not all PLM deployments are not successful. And that’s a detriment not only to the organization but to that champion’s career.
That has led some champions as well as some executives pledge a vow to never again pursue a large long scale deployment of PLM. They’re scared of it. And in some cases rightfully so. But they’re not willing to give up on technology as an enabler of better product development. They often still believe in that. So the most palatable means forward is a granular approach. Not because it offers better capabilities or will enable the organization to necessarily do more. But because it is far less risky, both for the organization and their careers. But ultimately, this is all about backlash against the big box approach to PLM.
When you think about big box integrated systems, Oracle and SAP are typically the first two that come to mind. But the vision behind Oracle’s Product Value Chain Management feels like something a little different. The whole concept of Master Data Management is to leave enterprise systems where they are and simply control the data in those systems from a separate centralized source of truth. But still, standing up a separate enterprise system in addition to all of the other ones that already exist within some companies can be a little too much.
Is this the 4th Evolution of PLM?
In their blog post, Oracle claims they have pioneered the 4th evolution of PLM. Is that the case?
On this blog, we’ve had a lot of discussions about PLM. There was the most recent discussion trying to define PLM. I also wrote about what PLM isn’t. But in this post, I guess the question should look more like this: is the next generation of PLM all about exposing information from various enterprise systems to any stakeholder in the development process?
The concept of sharing this sort of product information, regardless of which enterprise system it lives in, is not a new concept. Various software providers have been working on this sort of problem for some time. Now, Oracle may have a unique perspective on this issue because, unlike many others in this industry, they provide PLM alongside ERP, CRM, procurement and many other systems. But that unique perspective doesn’t make this stance revolutionary or even evolutionary.
The concept of cross organizational processes that span multiple enterprise systems is new in application, even if the concept has been discussed before. Personally, I have not seen other software providers try to turn this into reality as of yet. So I applaud Oracle’s gumption for taking the vision on. Of course, with Oracle having many enterprise applications like ERP, PLM, CRM and others as part of the same suite, it seems like a natural progression and plays to their differentiation. But that doesn’t mean they shouldn’t get credit for a big vision.
All in all, I don’t think this is the 4th evolution of PLM. I don’t think what the propose changes the debates going on the industry around defining PLM. But actually, I think it is something a little bit bigger. Oracle’s PVCM vision is about an evolution of the ecosystem of enterprise systems beyond PLM. And even though it doesn’t material change the evolution of PLM, it brings another aspect to the enterprise ecosystem that must be taken into account for PLM.
Summary and Questions
Yes, I know. This was a long post. But there was a lot to discuss. Here’s the recap
- Oracle claims they are leading the industry into the fourth evolution of PLM, which they are calling Product Value Chain Management.
- Oracle’s Agile PLM system offers many traditional as well as non-traditional capabilities for in PLM systems.
- Oracle’s Product Data Hub is a Master Data Management system that lets organizations compose a ‘golden’ product record that can then be managed and driven into many other enterprise systems.
- Oracle’s vision behind Product Value Chain Management is to enable the access of product information, regardless of where it may exist, to various stakeholders in the development process so they can make development decisions in a fully informed manner. I agree that this is a valid and critical need in product development.
- If access to product information is the most critical issue, there are numerous other solutions that solve that problem in a more granular fashion. If duplication of product information is the most critical issue, a system like Oracle’s Product Data Hub is a good fit.
- Part of the Product Value Chain Management vision relies on the longstanding value proposition that product information and development processes must be integrated. Some recently released PLM systems such as Autodesk’s PLM360, Kenesto and Nuage explicitly offer decoupled PDM and processes capabilities. This has gained some traction due to the granularity that it offers.
- Oracle’s PVCM vision around enabling cross organizational processes that span multiple enterprise systems reflects the reality of many large organizations today. Even though this can be seen as simply playing to their strength of making their own suite of enterprise applications work together, they deserve some credit: this is no simple problem to tackle.
- Does Oracle’s Product Value Chain Management vision represent the 4th evolution of PLM? In my perspective, no. The concept of making product information accessible to more stakeholders is not new nor is their approach revolutionary. Enabling cross organizational processes, however, represents a large change. It doesn’t redefine PLM. But it does affect it.
There are my thoughts. Ready to weigh in? Leave any of your comments below, but here are some starter questions. Does this vision represent the 4th evolution in PLM? Do you think Oracle’s MDM part of their PLM story is a nod to granularity? How important is integrated product data and development processes today? Sound off. I’m interested in hearing your perspective.
Take care. Talk soon. And thanks for reading.