Author: André Guldi

When deciding whether to upgrade your Product Lifecycle Management (PLM) system or implement one for the first time, the benefits are clear: more efficient processes, faster time-to-market, and improved collaboration. However, once you discuss features and use cases, another critical question arises: what does it actually cost, and which option is more cost-effective in the long run?

Choosing between Cloud PLM and traditional On-Premises PLM is often a balancing act between initial investment and ongoing operational costs. This article examines the costs of Cloud PLM vs. On-Premises PLM.

The traditional approach: On-Premises PLM

On-Premises PLM refers to purchasing and running the software on your own IT infrastructure. While it requires a high upfront investment, it gives you complete control over your system.

Upfront costs:

1. Software licenses: Typically, the highest cost. You buy perpetual licenses granting unlimited use. Prices vary depending on vendor, functionality, and number of users.
2. Hardware infrastructure: Powerful servers, storage, network components, and backup systems are necessary and must scale for future growth.
3. Facility costs: Server rooms with proper cooling, power supply, and security systems are essential.
4. Implementation and customization: Installation, configuration, data migration, and process customization often require external consultants and internal resources.
5. Training: Comprehensive training for administrators and end-users is essential to maximize system efficiency.

Ongoing Costs:

1. Maintenance and support contracts: Annual fees for updates, patches, and technical support typically amount to 15–25% of the original license cost.
2. IT staff: Dedicated IT personnel are needed for maintenance, troubleshooting, security, backups, and performance optimization.
3. Hardware maintenance and replacement: Servers and storage must be regularly maintained and replaced.
4. Energy costs: Running servers and cooling systems generates ongoing electricity costs.
5. Security measures: Antivirus, firewalls, and regular penetration testing are required for data protection.
6. Upgrades: Major version upgrades can be as complex as re-implementation, often involving adjustments, intensive testing, and retraining.

The flexible option: Cloud PLM

Cloud PLM (often offered as Software-as-a-Service, SaaS) provides the software and infrastructure via a third-party provider, usually requiring lower upfront costs.

Upfront costs:

1. Setup fees (optional): Some providers charge a one-time fee for account setup or initial configuration.
2. Implementation and customization: Configuration, data migration, and process-specific adjustments are necessary but often less extensive than On-Premises due to prebuilt infrastructure and standardized workflows.
3. Integrations: Connecting to existing On-Premises systems may require integration projects with associated costs.
4. Training: Training is still needed, but intuitive interfaces and online resources can reduce effort.

Ongoing costs:

1. Subscription fees: The primary cost. Monthly or yearly fees per user usually include software, infrastructure, updates, and basic support.
2. Scalability: Adding or removing users or storage is flexible and reflected in subscription fees.
3. Premium support/add-ons: Extra charges may apply for advanced support, additional features, or storage.
4. Customizations/integrations: Ongoing adjustments or new integrations may incur service fees.
5. Internet access: Reliable, high-speed internet is essential and should be factored in, even if already available.

Direct Cost Comparison

Evaluating total costs over 5–10 years is crucial for an informed decision.

Conclusion

The optimal solution depends on your company’s specific needs:

• Small and medium-sized businesses (SMBs): Cloud PLM is often more cost-effective, offering low upfront costs, predictable monthly fees, and reduced IT workload. Tools like CONTACT Software’s Cloud PLM system provide scalable, flexible solutions and even free trials to experience cloud-based PLM firsthand.
• Large enterprises or companies with complex requirements: On-Premises PLM may remain preferable, offering maximum control over data and systems if sufficient IT resources are available. High upfront costs can be justified over long-term usage.

How we support SaaS customers in Customer Success Management

Introducing Product Lifecycle Management (PLM) software is a significant step. The Cloud PLM system serves as a central hub for the development, management, and optimization of products throughout their entire lifecycle – from initial concept through production, service, and recycling. To ensure it yields results quickly, you need to set the right course from the outset. This is where our Customer Success Management comes in.

In this article, you will learn how Customer Success Management ensures a smooth and secure start with the CIM Database Cloud PLM system.

Onboarding in twelve weeks

To make your start with the Cloud PLM system as efficient as possible, we utilize our Fast Forward Approach. In a 12-week onboarding program, your key users will gradually learn all the essential functions of the system. Beyond the basic functions, we also provide you with industry best practices. This way, your team combines theoretical knowledge with practical expertise, enabling them to integrate the software into their daily workflow quickly.

The three pillars of the Fast Forward Approach

• Structured Onboarding: PLM projects require a clear structure. From the initial steps to the extensive functionalities of CIM Database Cloud: We ensure that all employees confidently use the new system and enthusiastically embrace the possibilities of holistic product data management.
• Active Support: During implementation, we stand closely by your side, answering questions and providing assistance to resolve potential obstacles in advance. Our support doesn’t end with the onboarding. We help you secure the long-term success of your Cloud PLM system.
• Sustainable Success: Our primary goal is to enable you to work independently and efficiently with the Cloud PLM system after onboarding. We empower your teams to leverage the full potential of the software and create long-term value for your company.

This is how the Cloud PLM implementation process looks

In weekly onboarding sessions, we guide you intensively through the main modules of CIM Database Cloud. The focus is not only on the mere operation (how) but also on strategic understanding (why), to unlock the full potential of the software for your business processes and secure your long-term success.

Key users solidify their knowledge through a dedicated self-study phase. This ensures that they confidently master all relevant basic functions by the end of the onboarding. In this way your team is optimally prepared for daily work with the Cloud PLM system.

What our customers say about their onboarding process:

“Thanks to the excellent collaboration with the Customer Success Manager, we were able to quickly and efficiently map our processes within the CONTACT SaaS PLM system, CIM Database Cloud, and successfully bring it into production. The close contact greatly facilitated our understanding of the CONTACT SaaS PLM system’s methodology and helped us find the right settings for our needs.”
Lena Döhl, Head of Mechanical Design, SAS Softec GmbH

“At bulthaup, we see the use of CDB Cloud as a foundation for realizing our vision of the digital twin. The guided onboarding by a Customer Success Manager from CONTACT gives us the opportunity to quickly use a fully operational and productive system. The clearly structured onboarding process, led by the Customer Success Manager, allows our employees to work productively with minimal training time. A major advantage is also the direct exchange with the CSM when it comes to issues or questions regarding the methodology.”

Alexander Weyda, HEAD of IT, bulthaup GmbH & Co. KG, Authorized Signatory and Member of Executive Management

Conclusion

The introduction of a Cloud PLM system is more than just a technical innovation. It is a strategic transformation that significantly shapes your organizational culture. To ensure this transformation succeeds, our Customer Success Management team accompanies you from start to finish with our proven Fast Forward Approach. In just 12 weeks of onboarding, we guide you securely and purposefully through the implementation of CIM Database Cloud.

Discover all the features that CIM Database Cloud offers you now.

Ensuring flexibility in Product Lifecycle Management

Product Lifecycle Management (PLM) has evolved rapidly in recent years. The availability of cloud solutions based on Software-as-a-Service (SaaS) now allows companies of all sizes to implement PLM and scale as needed quickly. This enables even small and medium-sized businesses to realize the benefits of PLM, such as improved collaboration, more efficient processes, and faster innovation. 

However, the move to the Cloud also presents a challenge: customizing. The question is: How do companies ensure that their PLM system meets their specific business requirements? 

This blog post shows you how to make your PLM platform more flexible using the customization options of the SaaS Functions Framework.

What is the SaaS Functions Framework?

The SaaS Functions Framework is a collection of architectures, best practices, and guidelines that simplifies and optimizes the creation and operation of SaaS applications. It offers the ability to customize the standard functions of cloud-based PLM systems, such as CIM Database Cloud, using special tools and interfaces, without changing the core code of the application. 

How is the SaaS Functions Framework used in CIM Database Cloud?

The SaaS Functions Framework allows our customers to execute custom code within CIM Database Cloud without having to worry about deploying or maintaining their servers. This is ensured by a serverless infrastructure, which allows customer-specific logic to be implemented directly in the Cloud. 

The responsibility for creating, maintaining, and the code of these functions lies with the customer company. The features they develop run independently of updates that CONTACT Software makes to the cloud PLM system. To simplify development, a Software Development Kit is available, allowing for quick and efficient implementation of individual business logic. 

Why is customizing important in Cloud PLM?

In the past, companies were bound to rigid, monolithic architectures in on-premises PLM systems. Consequently, customizations were often costly, time-consuming, and risky, especially when they required deep changes to the core code. Customizing tools like the SaaS Functions Framework offer a more flexible and agile alternative in Cloud PLM: 

• Customization without compromise: Your company can tailor the PLM solution to its specific needs  while retaining the advantages of a cloud-based platform (scalability, automatic updates, lower IT costs, etc.).
• Faster time-to-value: By reusing predefined functions and with easy integration, you can develop and deploy new features faster.
• Promote innovation: Empower your teams to experiment with new technologies and processes without compromising system stability.
• Future-proofing: The SaaS Functions Framework allows for the continuous enhancement of your PLM solution and its adaptation to evolving business requirements. 

Application examples of the SaaS Functions Framework in CIM Database Cloud

The SaaS Functions Framework… 

• …ensures easy ERP integration. This is achieved using webhooks, an industry standard for automatic, event-driven, real-time communication between web applications.  
• …promotes the implementation of custom business logic, such as input validations and dependency checks. For example, you can ensure that an item can only be released once the associated specification document is available and the item numbers consistently correspond to the number ranges of the item category.
• …supports the development of custom automations. For example, document titles can be automatically generated from the associated item names. You can also obtain item numbers from the ERP system or define mandatory fields depending on the item category.
• …enables individually designed reporting.
• …allows the editing of files, such as stamping metadata into documents after release (approver, release date) and the creation of neutral formats. 

Conclusion

Unlocking the full potential of Cloud PLM systems requires seamless integration into individual business processes. The CONTACT CIM Database Cloud Functions Framework serves as the ideal bridge here. Companies can tailor and expand their Cloud PLM platform as needed to meet changing requirements, without sacrificing the benefits of the Cloud. 

CONTACT SaaS Functions Frameworks offer you the possibility to execute custom code directly in the Cloud.