30 Minute Interview

“PLM has the capacity of changing the innovation framework”

How would PLM fit in the IT strategy of an organisation?

Hans-Kurt Lubberstedt Executive Vice-President Asia Pacific UGS

If companies aspire to extend their businesses, they need to work together with product providers to achieve a significant margin of improvement. The product industry or the company environment comprises various critical IT domains such as ERP, PLM, CRM and SCM. Product Lifecycle Management (PLM) involves all the processes from the content development stage to the logistics chain of ERP to the market entry stage of products.

PLM accelerates the product growth, beginning with the launch of the product. The profit increases in the incubation period due to changes in the product keeping in mind customer demand. Meanwhile, innovation in terms of new products from the same version lifts the product lifecycle curve successfully towards growth.

A key advantage of introducing PLM is that it involves less risk as it shrinks the time for the product to enter the market and thus decreases competency risk due to an early entry into the market. An interesting proof of the success of implementation is General Motors. Their product lifecycle has shrunk to a period of one year as compared to four previously. Their annual saving is $1 billion. P&G has also witnessed a 30 percent increase in profits.

How can one gain from PLM?

PLM has the capacity of changing the innovation framework of the company, possessing a dispersed private network to a global innovation network. This is achieved by transforming the process of innovation, by providing a common idea and knowledge base through PLM. As a result the business evolves from separate departments of the cycle to partners handling the different segments of the lifecycle. Some of our customers like Fujitsu, GE, Motorola, and Fiat have been able to accomplish these gains.

What does UGS aim to offer with its Velocity series?

The velocity series of PLM aims at the growing SMB market. We already have a customer base of 60 percent from the SMB space. By introducing this, we are sure that we can increase this number. This series is a suite of products from UGS and is designed for mid-sized manufacturers. It is modular yet can be integrated and pre-configured with industry practices. They are easy to deploy and priced aggressively.

What kind of market strategy have you adopted for the SMB segment?

We believe that SMBs today will be enterprises tomorrow. To cater to the SMB segment we plan to reduce the price by at least one-third or one-fourth of the PLM available for enterprises. SMBs have simple rather than complex technology requirements. These suites have a reduced implementation period as they provide basic requirements such as CAD engines integrated with simulation and integrated product development. This series will provide SMBs with a scalability option when they grow to the enterprise level.

How is UGS addressing the need for IT professionals in India?

The key requirement for SMBs in India today are IT process experts who have the capability of conducting simple processes such as engineering analysis and simulation. We have about 1,200 professionals working for us in Asia particularly in the services segment and about 600 in India. We are witnessing the need for skilled people. Therefore, we have undertaken academic initiatives with over 7,000 educational universities worldwide. UGS is also working closely with regional engineering colleges in India where technology applications are integrated with engineering curriculum. We have also arranged for specific programmes with VJTI, Mumbai, and the IITs. UGS hopes to develop skilled professionals in India through this initiative.

Why should Indian companies opt for PLM?

PLM is the key for a global collaboration standard in engineering services and product industry in India. Traditionally, product and supply companies had to follow instructions of OEMs for sales transactions. But today, they are involved at all levels of collaboration with customers for engineering information and capabilities. Now they are actively involved in innovation of the entire product lifecycle and help in generating value for the product as they are in direct contact with customers. Moreover, we need to be aware of the emergence of outsource development management (ODM) in India. With outsourcing opportunities having matured from manufacturing and assembly to full service contract manufacturing, Indian suppliers have to scale up not only in price but also in capability.

How do these channel conferences help UGS?

We have about 1,700 customers in India. With such a large customer base it becomes difficult to interact with everyone. Channel conferences provide us with a platform for customer dialogue. We become aware of individual customer needs and revenue connections. The feedback helps us to improve our business strategy. These conferences also help us inform our ch

annels about new developments in our company and our products. With increasing interaction with our channel partners we have shifted our attention from pure engineering tool providers to other areas such as data management. As a result, we touched the $1 billion mark in 2004.

—Priya Jain