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I started my series of articles about PLM and ERP by speaking about PLM vs. ERP Tug of War, continued about how PLM and ERP can change the battleground, and finally sharing my thoughts about PLM vs. ERP growth opportunities. In these articles, I discovered what separates PLM and ERP vendors and implementations Today. I’d like to turn around and speak about how PLM and ERP can achieve synergy.

Role and Function Separation

The things about the separation between PLM and ERP functions sometimes can be confusing. There is a clear separation between functions of engineering, manufacturing, and operations. Nobody will expect to manage CAD design in an ERP system or do procurement in PLM. However, some functions can be done in both systems – for example, you can manage the Bill of Materials in both PLM or ERP.

There are few interesting trends that I can see around PLM and ERP function separation – (1) the demand for integrated services, (2) system expansions, (3) SaaS apps and services. Customers are looking for ways to get systems integrated, and it drives many decisions about what systems to use. On the other side, vendors are expanding and looking at how to provide new services and increase the value of the systems. SaaS is a clear trend, and the usage of SaaS applications is increasing. It is an opportunity for vendors to be better, faster, cheaper, which brings us to the next topic of value proposition and cost.

Business Value + Cost + User Experience

While PLM vs. ERP can be a battleground for customers, it is a question of business value and cost. Many readers mentioned it, and, in general, there is a consensus about companies selecting business applications. Business value, cost, and user experience are playing key roles in this process.

Usage of multiple systems is always a problem for companies because it requires the integration of data flows. When it is unavoidable, companies are using multiple applications. But when companies can see an opportunity to use a single application, the formula of value+cost+user experience can result in preferring a single system. The decision is not simple. New SaaS applications provide an easy way to get started and integrate, so SaaS has an opportunity to impact the decision process.

PLM and ERP Synergy

You always need two for tango. In this case, PLM and ERP can be combined, but the successful combination is the art of many factors combinations –  ease of data management, ease of integration, and user experience. I can see three main options to achieve PLM and ERP synergy:

1- Technological Advantages. New technologies, especially in the cloud and SaaS, bring new ways to integrate systems. Combined with modern data management, new PLM and ERP systems can give an easier way to perform data handover and, as a result, eliminate the problem of working in isolated environments. This is a work in progress for many vendors and the place to watch. SaaS applications will be changing the business landscape much faster than you can expect.

2-  Partnership. When it comes to established large businesses, a partnership can help to create synergy and change the battleground. My best example is the recent Siemens and SAP announcement about a partnership using SAP applications and the Siemens Teamcenter. While the jury is still out to watch the results, the partnership is a proven way to provide integration and a business foundation for both PLM and ERP systems to work together.

3- M&A (Mergers and Acquisitions). The demand for integrated functions and business applications is growing. As I discussed in PLM vs. ERP – change the battleground articles, vendors on both sides can acquire companies to bring an expanded set of functions to ERP and PLM domains. SaaS application technologies make it easier today than in the old days when systems had to be installed and configured on-premise.

4- Custom Services & Integrations. This is a traditional and old-fashioned way to achieve synergy – build PLM and ERP system integrations. The integration can use existing technologies and APIs provided by applications and delivered by vendors or integration partners. Both PLM and ERP vendors provide integrations, and customers have to decide if the business value, cost, and experiences are on the level they need. In most cases, the main driver for integrations is eliminating manual data entry and reducing the number of errors. A growing factor for integrations is data availability, which is becoming critical for many businesses.

Disclaimer: I am the author at PLM ECOSYSTEM, focusing on developing digital-thread platforms with capabilities across CAD, CAM, CAE, PLM, ERP, and IT systems to manage the product data lifecycle and connect various industry networks. My opinions may be biased. Articles and thoughts on PLMES represent solely the author's views and not necessarily those of the company. Reviews and mentions do not imply endorsement or recommendations for purchase.

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