The legacy product lifecycle management (PLM) landscape has come to an end. It is inefficient, outdated and ill-equipped to support the development of the next generation of highly configurable and smart products. It’s no wonder that manufacturers across the industrial equipment, consumer goods and components sectors have begun to view the cloud as the key to accelerating the digitization and modernization of engineering.

The cloud is a key enabler of a more efficient product development, offering reduced cost and flexibility required for today’s industrial era. In a recent Accenture study, 52% of respondents cited the public cloud as the preferred choice for PLM.

Take the case of an automaker that migrated, tested, and launched a PLM system to one of the world’s largest cloud platforms. It reduced infrastructure costs by 60% and security efforts by up to 20%, and supported 2,000 users at peak.

Enterprises that take a 360-degree view will find even more compelling reasons to embrace PLM in the cloud, including:

• It enables cloud-powered product engineering, so that companies can roll out innovative technologies to more users much more quickly. The ability to automate the deployment and testing of new systems at a much higher volume and rate can amplify the power of engineers.
• It unlocks the power of integrating data, analytics and computing, making it easier to build digital thread and digital twin infrastructure, which enables a company to streamline and run simulations at scale across different engineering departments, even with manufacturing.
• It enables better and easier business integration, providing a more reliable conduit between engineering systems and business back-office functions, to power design-to-market and bill-of-materials procurement optimization functions.

For that previously mentioned automaker, the move to the cloud was successful. That doesn’t change the fact that we’re seeing many that have invested in PLM cloud capabilities leaving value unrealized. For example, cost reductions are lower than expected, the migration takes too long and becomes expensive, or critical capabilities aren’t delivered any faster than before. A typical issue companies run into is they design a PLM-on-cloud architecture that it’s more expensive than the current on-premise setup, which leads to inaction. Or a company is unable to deliver performance and security key performance indicators for its PLM cloud capabilities, which leaves business stakeholders dissatisfied.

If manufacturers are to leverage the benefits of cloud-based PLM — whether through reduced infrastructure costs, agile DevOps, scalable security services, analytics or digital simulation — they must take the right approach to migration. A proven approach that manufacturers can use to improve the likelihood of success centers on three core areas:

Starting your migration in the right way. Before you even think about which migration tools to use, or indeed which cloud to move to, develop a strong business case. This is critical during today’s tough economic climate, when every dollar of budget spend is being closely scrutinized for value. To get all stakeholders across the business to buy into the PLM cloud journey, focus on the value you want to achieve and work back from there. At this stage, a proven value assessment calculator can help uncover all relevant levers and hidden potential.

It’s important to do away with the assumptions and models of the on-premises world; the cloud is something completely different. An attempt to simply “lift and shift” on-premise PLM applications to the cloud and run them as before won’t deliver the breakthrough value you’re looking for. First, you must rationalize and modernize the PLM environment to prepare it for a cloud-native future. Simultaneously, you should look to break down barriers between I.T. and the business. and build a business case that meets the needs of both stakeholders.

Accelerating your benefits. As part of the mindset change from on-premise to cloud-based thinking, consider the managed services model. Many manufacturers are already coming to appreciate that managed services can help reduce operating costs through automation, scale and the innovation capabilities of application and infrastructure services.

Taking PLM as a managed service enables high-capacity infrastructure that can scale easily, and delivers round-the-clock support. This allows manufacturers to access engineering information rapidly, and make decisions faster. Managed services also enable next-level business resilience, something that many organizations have come to value more than ever since the start of the pandemic.

Totally transforming your capabilities to enable cloud-powered product engineering. Realizing the full value of cloud-based PLM requires thinking in terms of total transformation, not incremental change. The way manufacturers innovate and develop products is being turned on its head because of technologies such as the digital thread and digital twin. Both technologies can only be used to their full effect if they are deployed alongside modern PLM tools in the cloud.

The next-generation capabilities that support a connected ecosystem in product engineering and development, including the internet of things, artificial intelligence and product-data analytics, are typically built in the cloud. To make the most of them, you need to confirm that your analytics architecture supports your technology stack and necessary capabilities, prioritize use cases based on business outcomes, and ensure you have the appropriate level of data fidelity to support them.

Across industries, we’ve hit an inflection point. The pandemic is accelerating change, and businesses that will thrive in the long run are those best able to adapt and innovate at pace. Manufacturers struggling to see the full value of their previous investments must not let that be a barrier to their transformation. Instead, they need to use it as an impetus to course correct and ensure that PLM transformation aligns with business goals.

Sef Tuma is Global Lead, Intelligent Products and Platforms; Matthew Thomas is North America Lead, Engineering; and Abhi Dastidar is Senior Manager, of Accenture Industry X.