New solutions are now accessible and affordable via SaaS offerings, and they’re helping business leaders thrive in an increasingly competitive global marketplace.
Siemens has sponsored this post. Written by Rahul Garg, Vice President for Industrial Machinery and SMB at Siemens Digital Industries Software.
With the rapid advancements in technology, there is increasing consumer demand for innovative, smart and connected products that need to get to market more quickly, cost effectively and sustainably. Today, manufacturers must deliver on these expectations as they deal with increasing design and production complexity, as well as global supply chain issues that impact time-to-market. This requires close collaboration with employees, contractors, suppliers and partners, but to collaborate effectively, all stakeholders need access to the most up-to-date information to meet product design requirements, compliance, scheduling and production targets.
To manage these complexities successfully, manufacturers must adopt a digital transformation strategy to implement a multi-engineering approach across the entire product ecosystem. A digitalized work environment leveraging a software-as-a-service (SaaS) approach will allow manufacturers to work from a single source of truth and effectively collaborate across their departments, suppliers, partners and customers to ensure better decision-making for successful product delivery.
Digital transformation with SaaS: A competitive advantage
In addition to these challenges, small and medium businesses (SMBs) and startups often face a second set of business challenges: limited cashflow or capital, small staff, shortage of technical resources such as IT or computing expertise, remote workers and contractors, supply chain and partnership limitations, lack of deep engineering expertise, etc., which impact the future and success of the business.
This makes digital transformation particularly crucial to startups and SMBs as they must adapt quickly with flexible and scalable solutions to meet the changing needs of their customers and volatile business conditions. Startups often need to scale their business quickly for investment funding opportunities, and SMBs are under constant pressure to deliver innovative products quickly with limited resources to stay ahead of competitive threats. Digitalization with real-time data tracking to ensure successful product delivery can enable SMBs to quickly respond and adapt to real-time market conditions in an ever-changing global economy of rapid technological innovation, turning this complexity into a competitive advantage that enables them to make critical business decisions to stay competitive and meet consumer demands.
While there are obvious benefits to digital transformation, the product lifecycle management (PLM) software required to implement a digital transformation strategy and streamline product development processes from design through manufacturing can be costly, making it unattainable for SMBs and startups. Additionally, as remote and distributed employees, suppliers and contractors are becoming the new normal for companies, especially SMBs, on-premises solutions are no longer cost-effective or efficient.
Benefits of software-as-a-service (SaaS) for SMBs
PLM software can provide great value to SMBs and startups with the promise of connecting and aligning data, company and vendor business processes, and technologies to help develop and bring quality products to market faster. Traditionally, due to cost, PLM has been reserved for large enterprise companies. Today, however, SMBs can adopt PLM software more affordably with software-as-a-service (SaaS), a cloud-based software subscription model that provides applications to end-users via an internet browser.
SMBs that subscribe to SaaS have immediate access to powerful software tools that had previously been too expensive, or too extensive to run from on-premises offices, with the benefits of scalability and flexibility. SaaS provides the right cutting-edge software tools when and where needed in the organization, eliminating significant upfront hardware or software investments.
According to Gartner, IT cloud investment spending is predicted to reach US$1.8 trillion globally by 2025. Gartner also predicts that 75 percent of all organizations will adopt a digital transformation model based on the cloud as their product development platform by 2026. Likewise, Oracle reported a 77 percent improvement in operational efficiency for companies that adopted cloud solutions. As a result, it is easier than ever for companies, especially startups and SMBs, to adopt cloud-based SaaS PLM solutions without a significant upfront investment. Leveraging the connectivity inherent in SaaS and cloud-based technologies, they can focus on innovative product development and optimization instead of an IT infrastructure, while still reaping the key benefits of a cloud-based PLM solution that provides all company employees (including remote workers and contractors) and their supply chain access to cloud-ready, secure and connected tools where and when they need them. These key benefits include:
- Increased productivity and scalability: Companies can speed up software deployments to establish their cloud environment with ease and speed using SaaS PLM. Onboarding employees is efficient and scalable to meet the needs of the organization, including distribution, processes and global access to all users. With cloud-based services users can access data from anywhere, from any device at any time creating a connected ecosystem working from a single source of truth (shared data) across all distributed users, including across the supply chain. Multiple users in different locations can work concurrently on the same project without transferring files back and forth or waiting for their colleague to complete their tasks before starting their own projects.
- Reduced IT and operational costs: On-premises hardware and software are no longer needed, so SMBs do not need in-house IT resources and infrastructure, which can result in tremendous savings and eliminate the need for tool upgrades and maintenance. According to Gartner, companies will spend roughly 65% on application software via the cloud compared to traditional methods.
- SaaS security and data recovery: Organizations have found that their SaaS applications are more secure compared to on-premises software, allowing users to quickly deploy updates and security patches to address threats or other potential incidents, reducing the time to recover from such disruptions.
- Improved uptime and reliability: Gartner reports a 99.9% uptime for companies that use SaaS versus on-premises models which result in about 95% uptime.
- Remote workforce flexibility and retention: SaaS solutions make it possible for employees to collaborate from anywhere on a single platform and with a single source of truth, making it easier for companies to allow employees to work remote. With the changing workforce due to the global pandemic, companies comprised of remote employees or that adopt a remote work from home policy have realized lower employee turnover by up to 30%.
- Sustainability and reduced carbon footprint: Cloud computing can reduce an organization’s carbon footprint from 30 to 90% compared to on-premises SaaS PLM deployment, according to a study by Accenture, Microsoft and WSP Global, a Canadian consultancy. Operating costs, such as hardware updates, IT upgrades and electricity are factors that impact on-premises costs. By using a trusted cloud vendor such as Amazon Web Services (AWS), the carbon footprint is 88% lower compared to a traditional on-premises method.
Finally, by leveraging pre-configured industry SaaS PLM solutions, SMBs can not only acquire affordable software solutions, but have a solution already tailored to their needs, based on best practices from years of experience.
Getting started with digital transformation
Gartner reports that 91% of businesses are investing in at least one form of a digital initiative, with 87% of senior leaders claiming that digitalization is a priority today to maintain competitiveness. Most SMB leaders may be hesitant to adopt new digitalization solutions due to financial constraints or the lack of skilled staff, but today there are several cost-efficient offerings that can ease financial and technical burdens. The rapid advancement and affordability of digital technologies with SaaS PLM and cloud-based subscription offerings provide connectedness with fluidity across domains, offering valuable engineering insights to optimize both the product and process. High-fidelity digital representation of the workflows and processes will enable design decisions to be made earlier in the lifecycle, reducing engineering development time.
Automation, SaaS and low- or no-code technologies are now more accessible to SMBs to provide competitive digital transformation advantages. And it’s easier than ever to get started by adopting a PLM software solution that has preconfigured engineering and business templates, which include all of the PLM engineering essentials that SMBs and startups require from MCAD, ECAD and multi-CAD engineering and data management, to bill-of-materials (BOM) and document management, through manufacturing process and data management to ensure comprehensive end-to-end connectivity and collaboration with all of their stakeholders, partners and suppliers. These templates help SMBs mitigate risk, shorten learning curves and solve critical design through manufacturing challenges quickly and confidently so they can focus on innovation and time-to-profit targets. As a result, innovative SMBs are already leveraging digitalization through SaaS to gain a competitive advantage.
One such digital transformation customer is Simple Energy, a Bengaluru, India-based electric vehicle (EV) and clean energy startup. One of India’s leading EV manufacturers, Simple Energy used Siemens Xcelerator with Teamcenter X cloud-based PLM software as its digital foundation to plan, develop and manufacture its top quality EVs. Teamcenter X provided Simple Energy EV with flexible and scalable pre-configured engineering and business solutions the team could leverage to customize their designs. By leveraging a robust cloud-based PLM framework, Simple Energy was able to deliver rich and consistent product definition to ensure high product quality, superior R&D standards and manufacturing excellence, including sustainability with efficient and environmentally aware manufacturing. Cloud-based digitalization software and services provides continuous innovation in the eMobility segment, according to Suhas Rajkumar, the founder and head of Simple Energy.
Another example of how SMBs can use digitalization to realize success is REGENT, a Rhode Island-based manufacturer of all-electric sea gliders. The company is using Siemens Xcelerator-as-a-Service to develop a revolutionary zero-emission sea glider—the first of its kind all-electric wing-in-ground (WIG) vehicle for safe, low-cost and zero-emission transport—to transport people and goods between coastal cities. Siemens Teamcenter X cloud-native solution enabled the REGENT team to focus entirely on the design, engineering, manufacturing and product innovation. Using Siemens Xcelerator-as-a-Service for software subscription reduced company overhead and provided the critical cashflow needed as a startup organization, while still providing the company with the robust and modern digital tools it needed to support the company’s design complexity and aggressive innovation cycles to ensure certification and full-scale commercial production.
Conclusion
The promise of digital transformation provides countless benefits for SMBs and start-up companies. From faster product design through smart, connected PLM and cloud-based software and services, to efficient software-enabled manufacturing, and real-time operational management and product performance monitoring, access to robust digitalization tools are within reach. Through the democratization of digital software, cloud-based PLM and the comprehensive digital twin are no longer restricted to large enterprise customers. Most importantly, for SMB and startup leaders, the need to innovate with speed and agility is critical in today’s volatile global economy. To gain a competitive advantage, business leaders must invest in new digitalization solutions which are now accessible and affordable via SaaS offerings.
For SMBs and startups that are pursuing digital transformation with SaaS and cloud-based solutions, visit the Siemens Xcelerator-as-a-Service page to learn more about hybrid cloud, cloud PLM, Siemens Xcelerator Cloud and Siemens’ partnership with AWS. For comprehensive SaaS PLM software in the cloud preconfigured with engineering and business templates, SMBs can get started immediately with a trial copy of Teamcenter X.
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