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Product Value Management - propelling towards a future of cross-team streamlined workflows

George Lawton Profile picture for user George Lawton May 13, 2024
Summary:
Propel executives weigh in on the history and future of digital twins for physical products. The future requires evolving beyond standalone engineering focus tools to more integrated workflows towards a more enterprise-wide approach to Product Value Management.

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(Image by Gerd Altmann from Pixabay )

Agile Software, a trailblazer in the mid-90s, spearheaded a new category of Product Lifecycle Management (PLM) tools, a legacy that was acquired by Oracle in 2007. Last year, Oracle made a strategic shift, announcing the end of upgrades for Agile PLM as it redirected its focus to the Oracle PLM cloud-based offering.

I recently sat down with former Agile execs Ray Hein and Eric Schrader, who helped usher in this new era of digital tools for simplifying the design, development, and production of complex products. Now, at Propel Software, they hope to upend the PLM industry in the same way as cloud-native star-ups like Salesforce and Workiva. Hein founded Propel in 2015, retired, and now sits on the board. Schrader is now Chief Product Officer.

Hein and Schrader envision a future where Product Value Management (PVM) capabilities streamline workflows across various teams. While it's true that major PLM vendors like PTC, Dassault Systèmes, and Siemens are also expanding their connected offerings, Propel had a significant advantage in the race to the cloud, having launched in 2015.

Hein's journey with PLM tools began in the 1980s when he was tasked with managing data for a disk drive company. Back then, product data management (PDM) tools like Sherpa and Metaphase were run on minicomputers and operated through a green screen interface. While they were effective in their function, the user experience was far from ideal.

A sense of shared frustration and opportunity inspired Hein to join Agile in 1994 to launch a new category of more integrated PLM tools. He left the day before Oracle acquired what was, at the time, the innovative leader. In the intervening years, he was impressed by the rapid growth of Salesforce. He explains:

With PLM, Agile was the first to consider different industries and other folks in the process and bring in the supply chain because everything was moving to outsource manufacturing. That was the macro trend that drove the growth of Agile back in the day. I had the aha moment when I realized that product and customer data needed to be on a common platform. Because the true mark of product success is market success, that was the whole thesis of why we needed to do a new generation of PLM software by thinking about customer product connectivity.

The dawn of PVM

Schrader says he was attracted to this new vision for improving collaboration across the enterprise rather than just engineering teams. He suggests this expanded view could benefit from expanding the way we think from managing product data to managing value:

PLM was really stunted in this kind of small aperture of an engineering work group, and maybe engineering and manufacturing, and it wasn't responsive to the rest of the organization. It was seen as kind of a wonky solution and really didn't get broad adoption. Also, it was not focused on the user experience.

The path from there forward with Propel was to think about it larger in this broader context of not just engineering and not just supply chain, but all the way going forward into sales marketing, aftermarket service, how do you understand how the customer buys the product and the end item that the customer owns? And the fact that we chose the technology platform we did allow us to really look at the whole lifecycle at the enterprise level, from concept to customer, and then everybody that's involved in the company, that has activity touching product information across everybody in the company, and the extended supply chain.

That's a bit why we've evolved the name of Product Lifecycle Management even further into product value management because we view that PLM had its 20 years or 25 years or more to solve this problem. Still, it's kind of gotten a name, which is restricted to the workgroup. We've kind of broadened that into this broader enterprise aspect of the product. And when you think about product companies, almost everybody in the enterprise is touching it, from marketing to service to field service. And I think the move to cloud has also created an opportunity for openness. And I think when you look at the legacy vendors, there is a closedness and on-premise aspect to their solution, and they need to really solve these problems. You have to be open, and the cloud is part of that journey.

Extending the scope of digital twins

One of the biggest challenges in improving product collaboration is that various teams rely on different data formats and processes to discuss the same thing. For example, just in the engineering world, mechanical, electrical, and fluid engineering experts use different data formats that need to be translated across domains with each change. However, this only captures how products are designed, not the value they bring to the business.

Hein argues there is an opportunity to expand the way we collaborate on digital twins across the whole organization:

Most people's digital twin mindset still involves taking that CAD data and visualizing it, extracting it, simulating and pulling data out of it to create a 3D experience. That's what NVIDIA is doing with its hyper-speed graphics chips to visualize it better and do better simulations.

But expanding that with a product thread all the way through that design, make, market, sell, and service into the customer's hands. So, the product thread is common all the way through, and we bring the CAD data through visualization information and so forth and expose it to non-CAD people. It's a different way of thinking about digital twin than the way the CAD people think about it because we think about it going all the way out to the customer side, not just in the simulation engineering side.

Another aspect of this more expanded definition of the digital twin is that it provides an opportunity to think about new ways of enriching product data. Schrader points to how embracing a more open and integrated approach can make it easier to associate supplier risk, supply chain risk, sales data, and service data with a product to make better decisions for quality engineers, procurement, supply chain, service, and business teams. He also points to how these expanded data sets can fuel generative and predictive solutions.

My take

It’s easy to imagine that tools for developing products more efficiently would be one of the fastest-growing markets as new digital tools come on board and enterprises look for ways to support profits and the environment. But PLM tools don’t seem to be growing as fast as other categories like ERP, data management, or CRM. I am still trying to understand why this is the case.

I think Propel's work to connect product data across more pockets of the enterprise has the potential to turbocharge this growth since it is democratizing more types of information to more types of users. As a private company, we can’t compare its size to that of public competitors like Siemens, PTC, and Dassault Systèmes, but Hein says it is growing faster. And to be clear, all of these competitors are building out cloud variants of their offerings that help to connect product data across some data silos.

But here is where I think Propel has an edge: they started by considering business value across the whole company rather than just technical performance aspects. Even eight years in, it's hard to tell how well this plucky startup will fare against savvy legacy vendors. However, even Salesforce did not look like much eight years in, and now it’s worth 83% of Oracle. It will be interesting to see if Propel can achieve a similar measure of success in the long run.

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