In the fifth of our exclusive vendor interviews from January’s NRF show in New York City, our Editor talks with Brion Carroll (VP R&C Global Business Development) and Scott McCarley (Product Marketing Director) of PTC about the 2014 show, and what they like to call ‘Product Centric PLM’.
Ben Hanson: PTC has exhibited at NRF for a number of years, so I’m interested to see how the 2014 show compares to previous years in your opinion.
Brion Carroll, VP R&C Global Business Development (pictured right): The show has been very effective for us this year, and very active. We’ve seen a real blend of individuals visiting our booth, and everyone seems to have a greater level of understanding of what they’re looking for this time around. In previous years we’ve had more people asking what PLM stands for, but this year there seems to be more in the way of active investigation for PLM initiatives.
BH: Outside of NRF itself, PTC had a separate executive event with a good turnout. I particularly enjoyed the presentation by Sahal Laher, CIO and EVP at Brooks Brothers. How has the last 12 months been for PTC when it comes to marquee customers like Brooks Brothers?
Scott McCarley, Director of Product Marketing (pictured left): It’s been a fantastic year. We have a lot of new clients, and a lot of clients who’ve previously begun implementing are now experiencing the benefits – clients like Brooks Brothers. A growing number of customers today are working with us to not only implement extremely capable, proven software across their organization, but also to learn about best practices, based on our experience working with two thirds of the industry’s leading retailers.
BH: That ties into a lot of the content of Sahal’s presentation – namely that although each retailer or brand’s challenges are unique, there’s an awful lot of commonality between what they need to get out of their solution and their vendor partnership.
BC: One of the things we enabled in the North America region, a couple of years back, that is really starting to solidify today is what we call ‘Customer Care Management’ or CCM. We also have a team in Europe that provides CCM by focusing on managing and experiencing the changes the customer is undergoing. Whether its spontaneous lunch-and-learn meetings, strategic sessions, or planning sessions, we’re finding when we sit down with our customers that they are really trying to stay as close to the latest revision of the software as possible. And if they aren’t, then those experiences allow us to at least understand why they might be holding off until a future release.
The CCM strategy has really brought closeness to our customer relationships. Not only because it allows us to discover what they like and where they find value, but also because our customers know they are listened to. This partnering model has helped a lot when it comes to understanding what our customers – retailer, brand or vertical manufacturer – need from us.
BH: PTC has always prioritised value, which Brion mentioned there, but I think that crystallised a little further this year with the release of your value-ready deployment model.
SM: Yes. We released that for apparel last year, and we’re soon to release our value-ready deployment for footwear. I should also mention that one implementation option, as part of that value-ready deployment, is our Managed Services offering. After having rolled out managed services last year, it has proven to be of particular interest to some of the retailers we’re working with who have chosen, for a variety of reasons, not to bring their own IT department into the project.
BC: It’s strange, the results we’re seeing from that. You’d expect that managed services would be popular amongst companies where their IT departments were already constrained and didn’t want to take a new project on in addition to their existing responsibilities. Though I can’t specifically disclose which customers, it’s also the billion or multi-billion dollar companies who are the most taken with the idea. That really surprised me.
BH: Enduring partnerships are another part of the value equation, and they seem to be something you’re actively targeting as well. I know from our experience that retailers and brands gain more from a PLM project when it’s been treated as something beyond a software sale.
SM: The value-ready deployments that we’ve talked about – the best practices that we’re bringing alongside the software itself – those aren’t static, and neither is our commitment to our customers. When we talk about best practice it’s an evolving definition. If a customer brings something to our attention that’s truly an improvement on what we’re offering today, then we’ll build that best practice into our future deployments.
BC: I’ve been working on PDM and PLM for thirty years, and while I worked as a consultant, people would always ask me when the PLM initiative was over. My answer was always that it’s only over when you run out of creativity or commitment. There’s no other answer to that question that made sense to me then or that makes sense to me now. You either stop your roadmap because you’re finished, because you can’t be creative with new ways to leverage PLM. Or, you’ve exhausted your commitment because you either have higher priorities, or because you neglected to track the value before and after your PLM project.
Because of that, our customers have an on-going relationship with us, and it’s a good thing for both parties that that partnership exists. We really believe that if we cannot bring consistent and continuous value to a customer they shouldn’t be our customers, and we shouldn’t be their vendor. We work really hard to understand our side of things and improve on the value we can bring, but unless we understand the DNA of our customers and remain receptive to their needs, we run every risk of making the wrong choices. The more we know of them and what they want from us, the better we can choose the right capabilities and the right features for our future offering.
[quote]It’s been a fantastic year. We have a lot of new clients, and a lot of clients who’ve previously begun implementing are now experiencing the benefits – clients like Brooks Brothers.[/quote]
SM: It’s a focus on delivering business value above all else, and understanding that the definition of that varies from customer to customer.
Part of what Brion is talking about with regards to new value is our commitment to continuous improvements. As we prepare for our new release, one thing you’ll hear a lot about from us will be analytics and intelligence. We’re committed to improving the recording and reporting of analytics on our platform, enabling customers to look more deeply into their supply chain. For example, with that kind of intelligence and insight, they can then determine which suppliers are meeting the necessary criteria, which are delivering the best quality and so on. There’s a lot we’re doing in that area that I believe will deliver real and obvious value to the business as a whole.
BH: That’s a pretty key point, I think. PLM is no longer an IT initiative, and there’s a lot we’ve discussed here that goes beyond the scope of IT. You aren’t talking about just delivering value for the CIO; you’re talking about delivering value for the business. And that comes from having a centralised and contemporaneous source of intelligence.
BC: It’s also about recognising what you don’t do, and prioritising what you do. Through our partnerships program we look at how we can leverage existing tools to deliver the most value to our customers. We integrate to Adobe Illustrator because it’s a key tool in the retail and fashion industry; we didn’t decide to build our own CAD tool, because we recognised that the value lay in what the customer wanted.
BH: And in that case, continuing to use Illustrator alongside their new PLM solutions is where the value was for those customers. They have designers who want to continue working in Illustrator, which makes that integration a business imperative.
BC: And you’ll see more of that from us in the near future. I can’t talk about it just yet, but we’ve identified a few opportunities where we can achieve a close coupling that will enable us to deliver value in conjunction with other niche vendors. Where it’s in the customer’s best interests, we aren’t competing just for the sake of competing.
SM: We’re very pleased about the partner ecosystem we have. And it’s worth pointing out that one of our other strategic partners, ITC Infotech, recently developed and released mobile applications for our solution. We’re really happy to see the way our partner community has flourished.
BH: You mentioned a new release earlier. What do you have on the horizon for the next 12 months?
BC: Consumer products. Now, you have to have lived as long as I have to know that PDM and PLM were originally created from an engineering blueprint. We’ve obviously come a long way since then, but over the past year we did a lot of investigation and collaboration with customers who are interested in moving forward with what we call ‘Product Centric PLM’.
There’s a lot in engineering centric PLM that many of our companies have done very well. However they have yet to reach a stage where they can look at the specific product line that their engineered content is relevant to. Giving holistic visibility to all aspects of a consumer delivered product isa major value offering that we’ll be enabling in our new release; enabling engineers and merchandisers to leverage the same sets of data. That’s why we call it Product Centric PLM, because now everything related to the product – the line itself, the retail information, the sourcing content, the packaging, the artwork, quality management, compliance – it’s all visible in a way that makes sense.
SM: I think from that same point of view, PTC has always been successful at managing multiple product types. We’ve delivered hardgoods, softgoods within apparel, private label, footwear etc. all in the same solution, through multi-channels. As we said earlier when we talked about partnerships, we try to support our customers with all the different business models they have, and of course that means supporting individuals within a range of different job roles and functions within an organisation.
[quote]There’s a lot in engineering centric PLM that many of our companies have done very well. However they have yet to reach a stage where they can look at the specific product line that their engineered content is relevant to.[/quote]
BH: Retail is one of your fastest-growing verticals, as I know you’ve mentioned before. I’m curious to know what percentage of that is fashion.
BC: Actually it’s hard to tell, because a major retail company may see themselves as fashion, but you wouldn’t necessarily call them fashion. I’d roughly estimate it to be about 30% – but it ebbs and tides. Because of the breadth of capabilities we have and the cross product types that we can manage, we’re getting a lot more interest from a broader base of customers.
BH: What kinds of territories have been particularly big for you in PLM, in the last year, or so?
BC: When you look at our customer graph over time, you’ll notice that in 2009 the economic downturn caused a major shift to where PLM was no longer optional. And I think the recent, smaller, fluctuations have woken some retailers and brands out of a comfortable slumber and started them down the road of looking for PLM. I’d say that activity is more visible in North America than Europe, but only slightly. We have a roughly 50:30:20 ratio when you look at North America, Europe and Asia.
BH: One of the industry’s hottest topics is still compliance and supply chain transparency. Does that remain a driver for people looking at PLM?
SM: It’s definitely a factor in businesses looking today. Some of them have compliance and transparency initiatives already running or running in parallel with PLM, but whether you have an on-going PLM initiative or not, compliance regulation is something you have to prepare for.
BC: It’s often the case that we tell customers we can help them to manage their vendors, and they respond by asking why would they need to. So we explain how our solution can help them to avoid a situation where they choose to work with a vendor but then later have to release them because of breaches in social, ethical or environmental compliance. The same goes for their factories: you need to know how to coordinate that early in the development process, rather than later.
SM: Absolutely right. Just to circle back on that: compliance is increasingly becoming a legal obligation. As a result it might start in the legal department first, and get passed onto somebody in a legal compliance role. But ultimately, the best practice, undoubtedly, is to address the issue at the root cause, which is at the point of new supplier introduction and vendor management.
BH: Absolutely. If you need to achieve full transparency and traceability, it has to be inherent in every part of your dealings with vendors and supply chain partners.
BC: Originally PTC wasn’t even visible in that space. Even our existing customers might have told you they had no idea they could manage and collaborate with their vendors using PTC’s Retail PLM Solution. Today we have a vendor portal that’s absolutely second to none.
I think that echoes the progression of PLM as a whole, from merchandise, design and development, right through to vendor profiling, auditing, compliance validation and so on. The need for vendor management is growing in our customer base, which is driven by both the maturity of their implementations and the identified need for true transparency and traceability throughout the supply chain.
BH: That dovetails, really, with what you were saying before: that delegates come to the stand not necessarily knowing what PLM is, but they’re drawn by the idea that PTC does supply chain management. Is there anything else you see as being a notable trend over the coming year or so?
BC: You’ll have seen that PTC just acquired ThingWorx, which is a really fascinating company. They are the creators of an award-winning platform for building and running applications for the Internet of Things (IoT).
The acquisition extends PTC’s strategy by accelerating its ability to support companies creating connected products. ThingWorx technology will help organizations fundamentally leverage the connected world, and ultimately find new ways to create new value from their products.
SM: That’s a really interesting area, and one that will definitely have a big impact. It’s an exciting time for retail.