Adopting PLM (and other enterprise) solutions typically converge from two dimensions: 1/ the software products (the IT tool or platform) and 2/ the related implementation services (from good practice adaption to personalization, training, data migration, integration, in addition to subsequent maintenance and support). This includes cases when new product capabilities are activated with minimum implementation service requirements, or on the contrary, new implementation services to improve existing product or enterprise integration requirements.
The PLM sale typically consists of a combination the two, especially for medium to large organizations, start-ups looking forward to growing into complex enterprises, etc. Traditionally, software resellers focus on product sale, ongoing training and maintenance, whereas system integrator and other implementation providers focus on business transformation and more complex projects. Furthermore, SaaS solutions expand this landscape by selling the two altogether, a.k.a. “PLM-as-a-Service”, combining product capabilities, OOTB configuration and associated maintenance.
In this post, I elaborate on the PLM sale, how vendors, VARs and system integrators operate and their focus, and what it means to sell implementation and maintenance services.
Selling (buying and implementing) PLM solutions can be a complex process due to its strategic nature, sometimes coupled with complex stakeholder alignment requirements, often challenged with the difficulty to estimate and realize returns-on-investment. Selling enterprise solutions requires understanding the strategic context, the operational requirements, the integration landscape, the ability of the organization to learn and change.
Selling PLM Software Products
Broadly speaking, enterprise software consists of platforms and apps which are configured, personalized / customized and integrated in context of other business solutions. Vendors, supported by their reseller network, must keep current with the latest technology advances and industry practices.
Value-added resellers (VARs) are to be trained and supported by vendors as they learn the latest ‘best practice’ and capability developments. VARs and vendors also work collaboratively in supporting and maintaining existing customers, providing training and continuous education to end-users.
The PLM software sale focuses on:
- Capability alignment with strategic objectives
- License model, perpetual vs rental
- Software licensing and inter-dependencies / pre-requisites
- Type of licenses, infrastructure implications
- Supply chain implications
- Support and maintenance terms
- Scalability and flexibility
Software products clearly come hand-in-hand with requirements for implementation services; the idea is not to segregate the former from the latter, but to discuss business development differences between the two.
Selling PLM Implementation Services
Delivering business change associated with PLM, ERP, MES and other enterprise solutions goes beyond the software product. Helping organizations transform imply enabling new processes, educating users, re-designing or restructuring functions, logistics, distribution and supply chains, adopting new business models, etc. Associated implementation services include business case and change roadmap development, process re-engineering, data migration and enterprise integration with both legacy and other new integration platforms.
Whereas VARs and vendors typically exclusively focus on their software offering, system integrators are typically software agnostic and they can manage the delivery of the full package—including the PLM platform. System integrators are expected to lead such implementations, and be accountable for value realization their given scope, managing both delivery and the future cost of ownership of the solution. They contribute to several decisions, such as the level of customization, interface efficiency, data quality, user education, etc.
Other service providers specialized in business strategy, process and data mining, enterprise integration, IT infrastructure, or operations improvement and execution. Selling PLM implementation services comes with a range of industry, technology, process, data and people competencies. Such providers do not really compete with the vendors or VARs as they serve different purposes:
- Vendors and VARs focus on software sale, through value definition.
- System integrators and implementation partners focus on value realization, business transformation, enablement and adoption.
Beyond assessing commercial risks, the size or the brand name of the system integrator is not what matters: on one hand, large consulting players do not provide a guaranty of success, on the other hand small players must provide the minimum required credibility, while remaining transparent and flexible.
What are your thoughts?
This post was originally published on Momentum-PLM on 20 April 2021.
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