JM: In our last conversation, you said that ROI is driving CFOs to re-evaluate their PLM systems. How widespread is this movement?
Peter Schroer: I've been in PLM for a long time and right now I am seeing more reassessments than ever before. The trend is particularly strong at the 10,000 user and higher level, and even includes some high profile reference sites for the legacy PLM providers. They are downloading Aras, running pilots and actively engaging with our architects.
JM: Is ROI the only factor driving replacements?
PS: No. New technology and the ability to take full advantage of it is also playing a role in re-evaluations. A lot of legacy PLM systems are still very much a green screen, main frame style of computing where customizations can't be made, personalization doesn't exist and everyone is locked into one way of operating. That may have made sense 10 years ago, when you only had one plant and one process, but when your processes change monthly and the dynamics of your market require new employees, part time employees, ongoing customization and so on, legacy PLM just doesn't fit.
JM: How has globalization affected PLM?
PS: Over the past 10 years, everything has gone global. Today every manufacturer, regardless of where they sit, now has global competitors. This puts a lot of pressure on quality, time to market, product costing… you name it. To compete, everyone has to be better, faster, cheaper. At the same time, they all want to get lean yet the software applications that typically get used for design, manufacturing, and supply chain automation are fairly expensive.
JM: So what are manufacturers looking for?
PS: We live in a mobile, device, browser world, and manufacturers want to – heck, they need to – take full of advantage this technology. They want systems that are nimble, can deliver real ROI and meet the expectations of end users. They want new, flexible user interfaces and a much more collaborative style of working.
JM: Why are so many companies choosing Aras to replace their legacy PLM?
PS: Lots of reasons, not the least of which is that our software has a reputation for actually working. At the most practical level, it's about money. Aras gives you the most functionality at the lowest total cost of ownership. As we discussed, the life expectancy of a legacy PLM system is about 3 years. The difficulty has always been that to replace a failed PLM project you need another big capital budget again, just 3 years later. The beauty of the Aras model is that it eliminates the big capital expense. To change PLM vendors all the company has to do is just redirect where their maintenance dollars are going. Our approach makes it easy to transition from a platform that's failed to one that works, without making it a major capital event. And we'll even train you for free.
Find out how Aras plans to meet the needs of modern manufacturers in part 3 of our conversation with Aras founder, Peter Schroer.