2021 in Review

2021 in Review

As we head into the new year with the pace of change continuing, digital transformations accelerating, and connectivity increasing, I’d like to take a few moments to reflect on our 2021 predictions.

Remote Work: Correct
Predicting that in 2021 the economy and our behaviors would adapt to a persistent pandemic was spot on. Many of us continued to work primarily from home with very little travel. Industries that were impacted due to social distancing, such as air travel, hospitality, and commercial real estate continued to suffer. Those businesses with a high amount of cost sunk into the post-pandemic economy were negatively impacted. Companies with a high amount of technical debt in legacy systems, and with a heavy reliance on onsite data centers were at a disadvantage when compared to more nimble competitors with SaaS cloud-based solutions, enabling their businesses to be more resilient and agile.

Digital Transformations Become More Focused: Correct
Prior to the pandemic in early 2020, Chief Information Officers (CIOs) had great expectations to digitally transform their companies. Then the pandemic disrupted everyone’s plans with forced transformations occurring in 2020 as we attempted to keep our employees safe, cut costs, work remotely, and refocus on only what mattered to keep the business healthy.

Companies entered 2021 investing in higher levels of digitalization with more focused incremental transformations and clearly defined achievable outcomes to enable greater collaboration and innovation across the product lifecycle. In order to be more competitive in a new, more digital economy, companies are accelerating their investments in product innovation platforms, digitalization and digital transformations. “Global spending on the digital transformation (DX) of business practices, products, and organizations is forecast to reach $2.8 trillion in 2025, more than double the amount allocated in 2020. According to a new update to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide, DX spending will have a compound annual growth rate (CAGR) of 16.4% over the 2021-2025 forecast period as organizations pursue a holistic digital strategy for people, processes, technology, data, and governance.

The Emergence of Digital Threads: Correct
The foundation of business resiliency is the digital thread connecting your data across applications and domains throughout the engineering, manufacturing, and service processes of the product lifecycle. This provides traceability of an asset throughout its lifecycle. Companies are increasingly focused on improving their digital thread, enabling improved collaboration and efficiency.

Cloud Platform Adoption Increases: Correct
The companies Aras deals with are deploying in the cloud with many choosing the Aras Enterprise SaaS solution. This is a powerful SaaS offering with unlimited customizations and upgrades including all customizations on the customer’s schedule.

“Based on our research and industrial consulting experience, CIMdata believes that the flexibility and scalability of cloud-delivered SaaS solutions can significantly help companies execute their digital transformation plan.” (CIMdata)

However, there is a caveat to this shift to a SaaS PLM offering. First, the obvious question: Does the SaaS offering contain all of the capabilities and all of the applications of the on-premise version (as many still do not)? Secondly, will your specific requirements be met by the SaaS PLM offering, which in some cases is a rigid out of the box (OOTB) offering?

Overall, 2021 marked a major shift for PLM in which many companies made or are in the process of making the move to the cloud, and in particular to SaaS PLM.

Greater Resiliency in Manufacturing: Correct
Manufacturing companies once primarily targeted their processes to produce product for the least cost. This resulted in the 1970’s trend known as “globalization,” or the offshoring of manufacturing. It is based on profit and gave rise to many economies around the world, such as China. The idea was that manufacturing without labor and environmental regulations could overcome the cost of shipping the finished product.

However, the combination of increasing trade wars, tariffs, and finally the pandemic has given rise to companies beginning to re-shore or near-shore some of their critical manufacturing facilities and focus on more automation and just-in-time manufacturing methods.

While some organizations may take this approach, the pandemic won’t stop the world from becoming more connected. While companies will alter their supply chains, the major focus of which will be reducing single points of failure, and instead invest in flexibility and resiliency in their manufacturing operations and in the digital threads that connect them.

Smart manufacturing isn’t about the rigid automation of one thing for decades to come, but instead about how fast you can adapt to manufacture something you didn’t manufacture previously. During COVID-19, companies have had to come up with ways to more safely manufacture their products. In the future, it’s clear this is going to continue to shift toward managing production floors remotely.

PLM Becomes Core to Digital Transformations: Correct
For years, Product Lifecycle Management (PLM) software was focused on product development within engineering, but not the entire product lifecycle. A PLM system is not a software technology. You can’t buy it from a vendor. It’s a strategic business approach that may be made up of a portfolio of software products or applications based on a platform like Aras. Companies have begun transforming their product ecosystems (PLM systems) into more flexible end-to-end processes—a web of digital threads that enable greater collaboration across the lifecycle, the supply chain, and with their customers and assets.

Digital Twins: Partial
Historically, the issue with the adoption of digital twins has been that a ‘performance digital twin’ was not tied to an up-to-date configured digital twin with accurate as-maintained data and parameters, along with a digital thread across the product lifecycle to provide useful insights. It’s previously been focused on Internet of Things (IoT) performance data disconnected from “configured” digital twins. Aras has released Digital Twin Core, which manages configured digital twin physical assets, along with Dynamic Product Navigation, a platform service that enables you to visually render your product based on PLM data—regardless of your many originating CAD models from various vendors. This allows service technicians and those in any other discipline to view their product in terms they understand, and to collaborate in context with other domains anywhere in the lifecycle across a visual digital thread. Many companies made considerable investments in digital twins and as-running operations last year.

We rated this item as “partial” because while many companies are aggressively pursuing digital twins of their physical assets, their lack of a digital thread is holding them back. The technology is here. What has been underestimated is an organization’s ability to use a digital thread across their enterprise to manage their assets, which will be key in 2022.

The primary goal of most businesses should be to make focused investments to enable greater resiliency—to be ready to pivot, to react to unforeseen change, and to take advantage of opportunities as they arise. PLM had a banner year in 2021 and despite the pandemic we are optimistic about what the new year will bring.

Happy 2022!