Clear Thinking About Cloudy CAD

Sooner or later when talking about EDM or PDM software, the subject turns to return on investment (ROI). But before measuring the ROI of any particular software purchase, one must be clear about what exactly is being measured. Recent trends in the engineering software industry are muddying the waters instead of making things more clear about the purpose of PDM. So, (spoiler alert), this article is not about ROI of PDM specifically, but about the clear thinking required to measure it correctly.

There is a new set of CAD and PDM tools on the market using cloud technology. They all have one thing in common: they are geometry-centric. Like their desktop predecessors, they are very good at helping people turn ideas into drawings or models. The new cloud-based CAD systems offer a better way to streamline design collaboration. Distance is no longer an obstacle for those who must work together to create geometry. However, the work output has not changed; geometry is created, refined, and submitted to a larger product development process.

When a CAD vendor adds PDM to CAD tools, they invariably create a situation that treats the models or drawings as the product. A book about trees is not a forest; a set of drawings or 3D assemblies are not a product. PDM that only exists to manage CAD documents is not enough.

We are then left with the same question that was relevant 20 years ago: We have the geometry, but now what?

A complete PDM system starts from the realization that everybody in the company is there to help create products, not data. Perhaps if we typed the acronym as “PdM” it would help. If we were writing a screenplay, “data” would be a supporting character not the star. The product (or project) is the central character. A CAD system or a geometry-centric CAD library with added “PDM” features only helps juggle the documents; such technology is not a complete solution.

A complete PDM system takes geometry as one input, change orders as another, BOMs as another, email conversations as another, etc. The PDM system organizes all these inputs for efficient storage and retrieval, but then goes much further. The PDM system automates the business processes that turn all the data into tangible products (or a completed project, if your “product” is a plant or pipeline).

True PDM is about automating business processes, not about creating a geometry cabinet in the clouds. It requires thoughtful installation and implementation, so that when it goes online the PDM system turns previously manual business processes into automated digital processes. Economists refer to this as improving transaction costs. When a company arrives at this point, it can evaluate the investment more thoughtfully, with an emphasis on the time value of money as it applies not just to the creation of geometry, but the entire sequence of creative inputs and information transactions.

Don’t measure the ROI of having a place to put your CAD stuff; measure the ROI of creating digital business processes for product development.


 

Randall S. Newton is the principal analyst and managing director at Consilia Vektor, a consulting firm serving the engineering software industry. He has been directly involved in engineering software in a number of roles since 1985. More information is available at https://www.linkedin.com/in/randallnewton.

 

4 thoughts to “Clear Thinking About Cloudy CAD”

  1. Very good points. You stated that “Don’t measure the ROI of having a place to put your CAD stuff; measure the ROI of creating digital business processes for product development.” I agree with you, BUT, how does one go about determining the ROI of these processes? Also, what about the continuing ROI that these practices create for the business?

    1. Hi Ray:
      Thanks for your comment. I think that many companies are measuring their ROI on process automation by comparing new automated systems to old, laborious manual tasks. For example, an EPC in the mining industry we worked with was spending $760,000 a year to maintain a manual drawing register with Excel and manually creatie and deliver transmittals. That same company, when they implemented Adept for workflow and transmittal automation, was able to entirely eliminate these costs — year over year (http://bit.ly/1LY5boV).

      I believe that once companies see the actual $$ and time saving rewards of ROI from any sort of automation, then they are more than willing to commit to ongoing measurement of their own waste– whether it is time, resources, or scrap.

      1. I agree, labor intensive, inefficient processes should be discarded in favor of programmatic, contemporary ones,
        but how did your client realize the savings?I.e. Did they lay off personnel?

        1. They invested in our document management solution, Synergis Adept, and used the built in features such as transmittal automation and workflow and reporting. They didn’t lay people off, instead, they reallocated those people to more productive activities. Here is a link to the case study. . .http://bit.ly/1LY5boV.

          I hope I’ve answered your question.

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