A note from the author:
Last year, I published a blog on how organizations invest their time and resources in de-risking their PLM solutions. A year later, the number of conversations on this topic has continued to grow as companies are increasing their digital transformation efforts. I felt it was worthwhile to republish the blog for those who may have missed it the first time or to take another look at the content. The webinar “How to De-risk Your PLM Environment Before it’s Too Late” is available online and includes more detailed information on the subject.
What does de-risk mean?
The term “de-risk” is certainly not new in today’s business vernacular, but lately, it seems to have worked its way into just about every conversation with our PLM customers. “De-risking,” a system encapsulates what organizations deem critical for their systems to remain relevant. While de-risking might imply a one-time activity to improve the current state, this is short-sighted. The process of de-risking a PLM system should entail a series of long-term activities that establish the processes and environments to prevent major threats from impacting an organization.
The question to ask is, “What is involved in de-risking a system?” While it is fair to assume most people would associate the improvement of a system’s security posture as de-risking, this view limits the potential benefits of the concept. Improving a company’s security capabilities is a major part of de-risking, but it only covers one element. De-risking should involve more than security. De-risking should address the system’s ability to transform quickly and significantly to react to unforeseeable global events or unexpected business activities.
Why are we talking about de-risking PLM now?
Ensuring stable and secure enterprise systems while making necessary pivots to support changing business rules and technology has always been the fundamental objective of an IT department. What IT departments face today goes well beyond the definition of simple pivoting and can best be described as frequent changes and substantial swings in the core functionality within systems. These swings are often the result of unexpected global events that affect the structure of how a company operates, instantly creating new organizational paradigms for enterprise systems to support. Enterprise systems must quickly manage these new and complex requirements so business operations are not affected by new paradigms.
While executives hoped the significant impacts of recent global events on their business operations was a once-in-a-generation event (for instance, the impact of a massive global supply chain disruption), they have reluctantly accepted the reality that these events are only the beginning. New risks due to extreme pressures on energy prices, political upheaval, and governmental mandates on manufacturing have forced a new, de-risking priority for how enterprise systems are built, deployed, and managed. The process of de-risking helps minimize the chance of companies being affected by these and other, as yet unseen, threats.
Three ways companies de-risk their PLM environment
IT professionals recognize de-risking an enterprise PLM system involves multiple areas and, ideally, begins long before a system is implemented. Critical areas include security and compliance improvements, better elasticity of the environment, and utilizing a flexible platform for application changes.
Let’s look at three examples of how companies are de-risking their PLM:
1. Security and compliance – First and foremost, improving the environment’s security posture is where de-risking should begin. To accomplish this quickly, companies are looking to the cloud. Large cloud providers like Microsoft Azure, AWS (Amazon Web Services), and GCP (Google Cloud Platform) maintain the most secure data centers in the world. With an incredible economy of scale, these cloud providers guarantee the latest technology and the best security professionals are there to protect customer data and prevent cyberattacks. Large cloud providers offer a value proposition that individual companies, even the largest in the world, cannot match.
Additionally, a few PLM SaaS offerings available today maintain certifications to guarantee the security, availability, and confidentiality of critical data. Certifications ensure the SaaS provider’s internal processes are regularly reviewed and approved by independent organizations.
2. Elasticity of the environment – Events like company mergers and acquisitions, shifting business partners, new collaborative processes, and changing supply chains affect how PLM environments are designed. As organizational paradigms change, so does the size of the user base, where users are located, and the peak times of system usage. Additionally, as system functionality changes, the volume of information being stored or accessed within the system will likely increase significantly but may even decrease. Reacting to these shifts means you must have the proper infrastructure available, in place, and correctly configured to maintain acceptable response times. This requires the elasticity of the cloud. Cloud providers maintain a nearly unlimited capacity and have tools to add or remove capacity instantaneously.
As users shift to new locations around the world, large cloud providers can also shift the location of a customer’s data center to a data center physically closer to the users, reducing network latency. Regardless of the threat affecting the business, the cloud enables companies to de-risk the impacts of managing the environment’s capacity and the risk of system disruptions due to ever-evolving system landscapes.
3. Flexible Platforms – For years, most enterprise PLM systems have been notoriously difficult to customize to a customer’s specific requirements. New use cases and the subsequent changes to the application’s business logic came at a hefty price. Besides the cost of making the system changes, the modifications often created technical debt. Fulfilling new requirements through customizations negatively affected the system’s ability to upgrade in the future. This led to companies postponing upgrades and delaying the value of new functionality provided by the vendor.
(Read more in the insightful CIMdata report, Deferred PLM Modernization Delays Time to Value.)
Fast forward to today. The volume and scope of new business changes are creating a nightmare for PLM systems that were not built to change with new system requirements. Several major PLM vendors have developed cloud offerings based on their flagship solutions but have not improved the capabilities to support changing business logic.
The only way for a business to de-risk system functionality changes and gaps is to use a PLM platform that provides low-code capabilities that allow the business to quickly modify applications and create new functionality as needed. The platform should be built with the ability to customize the system without creating technical debt that could impact future upgrades. Additionally, the best SaaS offerings work within a DevOps culture to ensure the continuous integration and continuous delivery (CI/CD) processes are automated and extremely efficient.
90% of respondents from a recent Tech-Clarity survey responded that the importance of PLM customizations is “critical” or “very important.”
Recently, there has been a significant increase in companies adopting the cloud for their PLM deployments with many also subscribing to new PLM SaaS offerings. It is not a coincidence that there are also a growing number of de-risking projects across the industry. I can’t say which of these efforts drove the other, but clearly, there is a natural synergy between these since cloud deployments and some SaaS offerings provide the foundational capabilities to support new de-risking efforts.
62% of respondents from the same Tech-Clarity survey replied they are “currently using” or “planning to use” a cloud PLM.
There is one PLM SaaS solution on the market that provides all the foundational capabilities necessary to “de-risk” the issues that come with today’s unpredictable business environment. Aras Enterprise SaaS has been called a Generation 2 PLM SaaS leader by CIMdata. Find out more by reading the analyst commentary, Aras Enterprise SaaS: A Gen 2 Leader.
To learn more, watch the on-demand webinar “How to De-risk Your PLM Environment Before it’s Too Late.” Aras executives discuss how Aras Enterprise SaaS de-risks your PLM environment from today’s biggest threats.