Best-In-Breed Systems Deployment – Vendor Interview James Horne, Director of Marketing and Business Development Centric Software, Inc.
Following on from his introductory look at the “best in breed” approach, Rob Smith recently met with James Horne, Director of Marketing and Business Development for Centric Software (a vendor that subscribes to the approach) to discuss their thoughts on both methodologies:
Rob Smith: With the recent downturn in global economies, are you finding that your customers (who are primarily multinational organisations working in the retail, footwear and apparel sector) have recovered quicker than some other industries with less resilient product portfolios, and what do you believe are your customers’ key business drivers now moving forward?
James Horne: The tough times that plagued the global economy hit the apparel and fashion industries especially hard. Yet the dramatic economic downturn was not the greatest risk we saw companies in these industries facing. Instead, loss of strategic vision and leadership posed a much greater threat. The most analytical and strategic companies understood they must continue to invest during these times, continually working to carve out competitive share.
Many of the companies that adopted this type of vision are our customers, who invested in PLM. With this type of vision, they were able to avoid reactionary decision-making, and withstood – or even prospered during – the recent times.
In terms of key drivers moving forward, we’re seeing that executives are working toward better visibility – horizontally across teams and vertically down through the organization – within their companies. Moving as far from “islands of information” as possible, they are focused on team efficiency. And once they’ve engineered out inefficiencies, they are looking at how best to use the saved time and resources. We’ve seen some customers turn that time into additional profitability, quality and even entire new product lines.
Rob Smith: As a rule of thumb, we look for a lifecycle of around 3-5 useful years from an enterprise system (whether it be ERP, PLM, EPOS etc.). Do you think we are going to see this “value window” being forcibly extended by consumers from their implementations? Do you think enterprise systems can still deliver a beneficial value over 5 years from go-live in the current market?
James Horne: It’s important to understand that the viable life of an enterprise system relates directly to the rate of innovation the vendor achieved in a given system. As we look at ERP and PLM, in particular, it is very difficult, given the complexities of the systems, for a single-vendor system to maintain a high rate of innovation in both ERP and PLM. Best-in-breed vendors will have the greatest opportunity to increase and maintain that innovation, and therefore, value.
When looking at lifecycles, it’s important also to look at how quickly a company is getting to the value window. It if takes 12–15 or 18 months, for example, to implement a system, you’ve decreased the value window by that amount of time. If a company can achieve value within 3–4 months, that delivers important impact on the value window consumers should expect.
Rob Smith: In what regions and / or areas are Centric Software either forecasting or currently seeing strong demand for PLM and other enterprise level-IT solutions? Why do you suspect the market is buoyant here ahead of other regions?
James Horne: Centric is experiencing and forecasting the greatest demand for PLM in North America and Europe. Because of the high cost of labor in countries on these continents, companies located here are highly focused on efficiency gains within design, merchandising and marketing – precisely the areas where PLM delivers its greatest benefits.
Rob Smith: How are you, Centric Software, helping to deliver better value for these customers from your enterprise system now, versus how you achieved the same goal in the different market circumstances prior to 2007?
James Horne: Centric is working to make sure that everyone involved with product development has access to product information. A PDM-plus-workflow system approach won’t accomplish this goal. Rather, we are focused on providing a system that meets the current market needs: the business process needs of designers, technical designers, sourcing teams, merchandising teams, marketing, line planners, sales and executives. All of these individuals need to be on the same page, working from a “single version of the truth” about the product.
Since 2007, Centric has incorporated more industry best practices to unite this ever-growing overall product team, and to meet the maturing expectations of the industry. Before 2007, the market focused on getting a system in place to handle only the specific needs of the design team (other parts of the organization used spreadsheet and other patch processes). Today, there is growing acceptance that spreadsheets won’t sustain a business in the long haul, so we focus on meeting the full team’s needs for access to product information.
We also are focused more on the unique needs of the apparel and consumer goods markets, as they have come to acknowledge that they require a PLM solution based on their unique requirements – not hybridized from other, entirely different industries like automotive and aerospace.
Rob Smith: Without going into the particulars that we will cover, why do you think running a best-in-breed systems approach is a better value proposition than running one singular end-to-end system(s) deployment?
James Horne: Think about it in these terms: Would you hire a designer to run your warehouse? Or a warehouse manager to manage your design team? The talents each role requires are as diverse as the business processes involved. A system that is best suited for running a warehouse can’t at the same time be equally suited to addressing collaborative and creative information flows.
The best-in-breed approach offers the greatest flexibility. Each part of the company can get the system that is best for their own requirements. So, accounting and warehousing, for instance, can pick the ERP system that works best for them. Likewise, product development teams can select the system that works best for them.
The good news is that, in well-designed systems, the point of contact between best-in-breed PLM and ERP systems is so small and well-defined that integration is not difficult to achieve and does not add cost to the total cost of ownership.
Rob Smith: Does the best-in-breed approach not mean, for example: two sets of implementation consultants; two sets of bespoke middleware; two sets of software licences; two sets of support contracts; two sets of independently configured reports; two sets of data? And so on…
James Horne: It’s a bit of a misconception to think that single-vendor PLM and ERP systems involve only one implementation team. The reality is that two implementation teams will always exist – even if in-house – because the knowledge base, skill sets and business process acumen are too diverse for a single group or team to handle them both.
With two best-in-breed systems, yes, there will be two sets of software licenses and support contracts. The benefits provided by two systems that are designed for distinct company functions far outweigh any minor additional administration tasks.
Rob Smith: Speaking cynically: software vendors, of course, have a margin on software sales. Part of the attraction of the single-vendor model is that a client can take advantage of economies of scale in licences, making the solution a more attractive sale. How does a best-in-breed approach deal with this loss of opportunity?
James Horne: If a company saves a few percentage points to get a system that inadequately supports the requirements of the product development, merchandising, sales and quality side of the business – to the point that it is reluctant to adopt and use the system it purchased – is it really saving anything? With a system that does not deliver the planned return on investment, there is no savings. The “value” in the “value window” disappears.
Rob Smith: PLM is an enterprise system and here at WhichPLM we consider it to be one of the most vital backbone components of any IT strategy. In that role, of course, it can have numerous interfaces into the ‘extended PLM’ world. How does your PLM solution deal with these integrations? Do you collaborate with key technology partners (e.g. SAP, Microsoft, Salesforce.com)?
James Horne: Centric understands that a truly effective enterprise system cannot function as an information silo, and must fit seamlessly as part of the larger corporate environment. To this end, as part of the Centric 8 PLM suite, we offer an Enterprise Connectivity module that enables PLM data to be easily integrated with a wide variety of enterprise application systems (including design, ERP and CRM). These integrations can be uni-directional or bi-directional, as appropriate for the respective systems.
Rob Smith: With these integrations, are we talking about interfacing three or four different sets of data to the PLM system (SCM, ERP, CRM etc…) or one PLM set of data, living in PLM, that is accessible to the three or four interfacing systems? What in your opinion would be ideal setup here?
James Horne: The correct approach is to start with corporate strategy. What does your organization want to excel at? Then it is time to match the systems to the core strengths you’re trying to build. Companies must optimise each system for certain types of information, and then will need to share this information with other systems to avoid creating silos within the organization. Connecting these systems should be a secondary issue to excellence.
An analogy would be to design a house around the pre-conceived notion that there could only be one cold-water pipe in the house. That would allow only one sink. It could work, but you’d be sacrificing a lot in execution based on the artificial constraint of one pipe.
Rob Smith: A potential issue could arise when one of the integrated systems releases a new version, and changes made to this version break the existing interface. If you purchased a single-solution/vendor model, this issue would be minimal or non-existent. How do your customers deal with such issues without the need for incurring further development or consultancy fees?
James Horne: The key is to define a common, neutral interface to minimize risk. With proper planning to develop a neutral repository, or transfer mechanism of information (which could be XML files or database files), the issue is not a major one. Centric’s Enterprise Connectivity module enables this sort of configuration easily.
The assumption that buying multiple types of enterprise software from a single-vendor provider will eliminate or minimize the upgrade problem is somewhat misleading. An upgrade is an upgrade. The fact hat both systems carry the same vendor’s logo is not a guarantee that when one system changes dramatically, the other – and the connection point between the two systems – won’t be affected dramatically, too.
Rob Smith: Not only are we talking about different sets of data, living in different systems, we are also looking at different platforms and technical deployments. What is the technical strategy for your solution’s development, and what factors have influenced this approach?
James Horne: At the database layer, Centric’s PLM system supports either Oracle or SQL server running on a Windows or Linux server. Everything else required to run the system is installed as part of the system installation. This allows a customer to take a best-in-breed IT infrastructure approach, and does not require a different platform for PLM. Centric’s technical strategy is to provide a robust enterprise platform that is fully scalable, using state-of-the-art infrastructure that we expect will continue to exist for the next 20 years, and pick technology that is highly cost effective.
For example, Centric 8 supports virtualization, which enables hardware cost savings and increases reliability.
Rob Smith: Finally (and perhaps crucially), if you had a very immature client who had neither PLM nor ERP, and only had the resources to run one system project, which would you advise to start with and why?
James Horne: Let’s think about it this way. If I decide I want to buy Lycra, do I just start buying? Or, do I first think about why I might need the Lycra, and what products would make sense to develop with it? How much Lycra do I need to build those products, when do I need it, and how will I use it?
Along these lines, PLM’s objective is to help companies decide what product will go to market, what the manufacturing costs of those products are, and how the supply chain is set up to take advantage of the product opportunity. If a company fails at these tasks, then no amount of ERP-related inventory management, financial planning or reporting, or other function, can recoup the opportunity.
In other words, how can you run a race if you don’t prepare for it? PLM is all about preparing for the race – the race to bring products to market. Without good ideas, designs and product development, there is nothing for accounting or financial management to do.
Read the other blogs from this series
One Size Fits All Series: Blog #1 – The Chicken or the Egg
One Size Fits All Series: Blog #2 – The Greatest Returns Come From Knowledge and Planning
One Size Fits All Series: Blog #3 – ‘That’s how dad did it and it’s worked out pretty well so far’
Rob Smith is the head of enterprise projects within the Product Development Partnership Group of companies. He is also a fully qualified commercial solicitor.
Contact Rob at email@example.com