Is SaaS the Future of Digitalization

As product complexity increases, so does the way in which companies design and manufacture them.

Siemens Digital Industries Software has submitted this post.

Written by: Tosh Tambe, VP of Business Transformation and SaaS Strategy, Siemens Digital Industries Software

(Image courtesy of Siemens Digital Industries Software.)

(Image courtesy of Siemens Digital Industries Software.)

Complexity is increasing every day because customers expect more smart, connected and integrated products. As product complexity increases, so does the way in which companies design and manufacture them.

Product and production complexity is real, and is becoming an integral piece of how companies operate and collaborate between their departments as well as with customers, suppliers, partners and more.

Because of greater market volatility and the accelerating pace of change and innovation, businesses must often respond quickly to changes in their market conditions and work in real-time conditions. They need to track market data, use the information to sense changes early and take actions to respond quickly. These actions require real-time tracking and might include ramping up or down on activities, shifting resources and making bets.

The next step forward into the future and meeting these challenges is digital transformation and leveraging or utilizing the connectedness of cloud technologies to turn this complexity into a competitive advantage. No more is this realized than with small-to-medium sized businesses that must adapt quickly and have flexible solutions to meet the ever-growing needs of their customers. Large enterprises will benefit from cloud-based solutions to break down silos within the company and become more agile to reduce time-to-market and increase effectiveness.

Distribution and the As-a-Service Model

The pandemic has accelerated the realization of more remote and distributed supply chains, employees and users. Having tools cloud-ready and connected for access and flexibility of use across these distributed sets of users within a company and across a supply chain is imperative.

A SaaS solution provides accessibility, scalability and flexibility to make standardized technology available for these distributed users. The as-a-service model is the natural next step from a business world standpoint, as it provides digital threads as a service.

Connecting domain technologies more seamlessly together to enable these workflows, these digital threads are all about a high-fidelity digital representation of the workflows and processes. SaaS technology tools and cloud capabilities enable and build connectedness, providing fluidity across domains where real value in the insights is used to optimize the product and/or process.

Subscribing to that service is really subscribing to two things: more connected technologies and the community, because that connectedness naturally creates the connective tissue between the users to form a community.

(Image courtesy of Siemens Digital Industries Software.)

(Image courtesy of Siemens Digital Industries Software.)

On-Premises vs. Cloud

The benefits of a cloud-based architecture versus an on-premises one are monumental. It is easy to state the benefits, but much harder for a company to actually go through the investment of changing the way they design and engineer their products. In an increasingly digital future, investing in cloud computing software will not just be a better option, it will be the best way to compete.

Typically, on-premises architecture features an application-centric world, rather than a data-centric world. Even with a PLM system on a server or an on-premises data center, the reality is that every individual user has application-centric access to the technology. This means, in the best-case scenario, the user has an installed application on their desktop and they fetch data from wherever the data lies, work on that data and then push that data back.

Oftentimes, however, users have an application-centric view with data islands. This unintended isolation causes massive data management headaches because it is locked into locally installed applications where it is brought in and sent out.

On the cloud architecture, users operate in a datacentric environment. The single source of truth is in centrally maintained data. Each user comes in through a browser window and operates with a set of tools approaching the data from a certain perspective.

With cloud, the connectedness is more inherent and natural than on premises, which is more about working in files. Unstructured databases, like those used in cloud computing software, are the end goal. Yet, it doesn’t stop there.

Manufacturing companies can have the data structure and files on a cloud-based system with access management, creating a controlled single source of truth type of data access without fundamentally changing the data architecture. They can have several different domains with different schemas all interacting and working together.

Overall, having the file structured data on the cloud with the right access management simplifies the problem of data management substantially.

(Image courtesy of Siemens Digital Industries Software.)

(Image courtesy of Siemens Digital Industries Software.)

Openness and Cloud in the Ecosystem

What about sharing data back-and-forth within the supply chain? On-premises data centers might look something like the cloud, but problems arise with access from outside stakeholders because the data is isolated and behind a firewall. A company must contend with how much access to give and how it impacts the design and engineering of the product.

Companies will even design around that problem by basically stripping out all the intellectual property (IP), so the supply chain works with a shell of a design. Still, the main problem is that data needs to move from one on-premises machine to another. The different users might not be in the same trust circles, creating layer-after-layer of burdens that affect the project and turn into costly redesigns.

Through access management on the cloud, the users come and go as needed, IP is managed much better, data is not moving around anywhere and activity can be tracked.

Fluidity Across Functional Departments

The pandemic accelerated the reality of remote workers, especially in terms of evolving work/life balance and the perks that companies offer to their employees to both work more efficiently and as a recruiting tool to attract the best talent.

There is also much more contract labor than ever before, including expert gig workers. The need to support both remote employees as well as a workforce that has an increasingly greater composition of contract-based labor is extremely important.

This means a variety of teams are doing the same function or similar functions around a project presenting a challenge of working on a standard form of data. The transitions of moving from one on-premises application to another on-premises application can be burdensome.

Even if the data access issue is resolved, it still requires manipulation of that data conversion. A product design team and a tooling engineering team working together might use similar design tools, but there will be some confusion. A team of industrial engineers and simulation analysts can complicate the whole process.

(Image courtesy of Siemens Digital Industries Software.)

(Image courtesy of Siemens Digital Industries Software.)

Building a Community of Workers

There are some communities which are natural within the process of your product lifecycle. With one single team, for example, you have a community naturally collaborating with each other using the same tools and connected technologies.

Take one step back and there are different teams, maybe different functional teams, within the same company. This too is another community, which may have challenges when it comes to collaboration.

Further back is collaboration within a supply chain. How does the entire ecosystem interact in a productive and efficient way?

The answer is enabling easier communication, collaboration and participation in these communities through more connected, collaborative technology, such as cloud.

No organization exists in isolation. They must interact as part of a wider ecosystem. They must interact with their suppliers, distributors, manufacturers and others. This is why an open ecosystem is crucial — it bridges the divides between communities and opens the ability for companies to seek expertise, recognition, help and collaboration opportunities on designs.

What this open ecosystem does is it creates a powerful industrial network effect that is only possible by embracing digital transformation. A SaaS platform and the technology of cloud-based delivery offers incredible, easy and flexible value and benefit in what would otherwise be an almost impossible method of collaboration.

(Image courtesy of Siemens Digital Industries Software.)

(Image courtesy of Siemens Digital Industries Software.)

Defining the Future

Industries are expanding their possibilities. For instance, the automotive industry isn’t just building cars; rather, they are evolving into mobility companies. They are thinking differently by creating an agile product roadmap and securing core technologies that enable autonomous driving.

Legacy automakers are switching to more robust, flexible, open and integrated solutions. Cloud-enabled technology is proving to cut development time by almost half because their teams can collaborate more efficiently and their suppliers are part of an open ecosystem sharing a single source of truth.

Imagine accessing a secure, software solution that fosters innovation. SaaS is how today’s leading companies are building the products of tomorrow.

Visit Siemens Xcelerator as a Service page to learn more about hybrid cloud, cloud PLM, Xcelerator Cloud and other cloud services.

About the Author:

Tosh Tambe is an experienced Business Leader with a demonstrated history of working in the information technology and services industry. Skilled in leading through technological and organizational transformation with a bias for action and innovation. Experience in building Product and Go-to-Market strategy, leading R&D, Sales/Business development, and Operations teams, and forging partnerships through CXO-level engagement. Tosh has a degree from The Wharton School of Business, University of Pennsylvania.