When the Swedish Defense Materiel Administration (SDMA), in an IT project called Norma, invests just under $50 million in new standardized PLM and ERP platforms, Siemens Digital Industries is one of the winners. The German PLM developer’s Teamcenter suite will become the platform for product development.

On the ERP and business systems side, Dutch ERP developer Unit4 is bringing home a major order for its Business World and Prevero systems, while Visma’s Commerce is also among the four system winners.

Of the estimated $50 million investment around these four new systems, about $30 million will be spent on licensing and related implementation costs. With regard to Teamcenter, the SDMA’s total investment is budgeted to around $15 million, while another $15 million is being ventured on Unit4’s and Visma’s solutions.

What were the main reasons behind the choice of Teamcenter for PLM, and Unit4’s solutions?

“When it comes to selecting PLM systems, Teamcenter received good reviews after the demonstrations that were conducted. As far as Unit4’s Business World is concerned, that platform already existed within the authority and as it covered our needs it was decided to implement the product as a whole and not as before for specific tasks,” SDMA’s dynamic CIO, Rebecca Ihrfors, said to engineering.com.

For Siemens, this was a major win both in terms of technology and from a commercial standpoint in a domain—aerospace & defense—where they are traditionally very strong. As for Unit4, the SDMA investment can be regarded as a milestone.

The Swedish Defense Materiel Administration (FMV, “Försvarets Materielverk” in Swedish) is a governmental agency acting under the Ministry of Defense. The organization makes sure that the Swedish Armed Forces have the equipment and logistic services they need to execute their mission: a stronger defense.

This task covers a massive number of complex products, systems and processes. The organization delivers everything from top modern jet fighters (JAS Gripen), helicopters and tanks to canons, air defense and radar systems to the Swedish Armed Forces.

The ordering of the new standardization platforms has an interesting background, and is the result of a new structural plan that came after comprehensive strategy work that started in 2015 and which in 2016 was set for implementation, a project led by Ihrfors, the then-new CIO.

From Proprietary Solutions to Standard Systems

SDMA's main customer on the IT side, the Swedish Armed Forces, has been most well-known through the large investment in the PRIO solution, a proprietary, customized set up based primarily on SAP's system family. This project has been hotly debated, and expensive; partly because it was complex to get in place with the right functionality and partly because the complexity was behind a number of delays and budget overruns. In terms of cost, the PRIO project has been in the half-billion-dollar range.

In addition to this, SDMA has built up a reasonably well-functioning solution—a proprietary system designed for product life cycle management and procurement.

“We saw quite early on that the proprietary systems have provided good support, yes, but with the development we have now in terms of the digital society and new disruptive technologies, they will not suffice,” asserts Rebecca Ihrfors.

The focus that was established in 2016 was to invest in fewer standard platforms.

Comprising over 1,000 users, there’s no doubt this was an attractive installation. Unsurprisingly, representatives of most major players are present: Dassault Systèmes with its 3DEXPERIENCE platform, PTC's Windchill and Aras PLM with its Innovator solution. However, Siemens came out as the winner. The company is perhaps the strongest PLM player in the defense field, and during 2018 took home a number of large orders from the U.S. Navy, U.S. Air Force and supplier companies in aerospace & defense such as Boeing, Northrop Grumman and others.

Siemens had an advantage as Teamcenter is often used as a data backbone in aerospace & defense. Furthermore, it’s clear that the platform capabilities and integration all the way from requirements management to manufacturing is probably the strongest on the market. The software apps on Dassault Systèmes’ 3DEXPERIENCE platform still aren’t seamlessly tied together, while PTC’s Windchill still has a ways to go in terms of seamless connections between product development and manufacturing; the Rockwell partnership on the factory automation side is still fairly new. When it comes to Aras, my qualified guess is that defense organizations are generally not too keen on the open source development side of the Innovator platform.

Four Systems to Replace Almost Twenty

With the new Norma project, four new systems will replace as many as 20 different systems currently in use at the agency. Instead, SDMA is in the process of establishing a cohesive business system platform where things like PLM, data analysis and support for procurement will become sub-elements. In short, a product innovation platform solution.

“By using established platforms, information exchanges between suppliers, SDMA and the Swedish Armed Forces will be facilitated. Those who have the same system as us—for example, Teamcenter—can have additional benefits as they generally do not need to transform data before sending it to the Swedish Defense Materiel Administration,” says Ihrfors, adding that, “Exactly how the interface between the defense industry and us will be designed is decided when we have established the more exact set up for go-live. It also provides us with safer and more robust platforms, which in turn provides stability, high confidence and accuracy for our suppliers and the Armed Forces.”

Automated flow is a key, claims Ihrfors, and she makes a strong point. In terms of PLM and ERP, an advantage with state-of-the-art systems is precisely the kind of integration and automated flow between systems generally characterized by product innovation platform capabilities. This is of great importance when, like SDMA, you are a client acting against a variety of stakeholders with different IT environments. The fewer manual elements required in the data transactions, the less the risk of incorrect data getting into the handling. The more that can be automated in the flows, the better the qualitative output.

Integration, openness and seamlessness are exactly the characteristics of Siemens’ technology path, claimed Siemens PLM’s CEO, Tony Hemmelgarn, adding that the solutions within its PLM platform framework are ahead of most competition in this perspective.

I discussed the topic with Hemmelgarn during Siemens’ recent press and analyst event in New York.

“We have built the market's widest and deepest portfolio of software for electronic and mechanical design, system simulation, manufacturing, operation and life cycle analysis. Teamcenter enables unique workflows that utilize the whole range of our technology,” Hemmelgarn said.

He also gave examples of useful integrations and mentioned Mentor’s Capital software, which has been embedded in NX (CAD) to enable experts to collaboratively create new products across the boundaries of technical disciplines. “We’re talking about a comprehensive software suite that enables the engineering of electrical systems for large platforms such as aircrafts, cars and sophisticated machines,” he added.

There are more examples, but all boils down to Siemens’ efforts to integrate and enable rapid innovation and validation of products and operations.  

Sharper Base Platform for Industrial Orders

Collectively, all these capabilities and integrations are useful in the context of what the Swedish Defense Materiel Administration is producing. The products are complex, and the product development work involved is based on "order profiles," which are the requirements specifications from SDMA.

These are communicated to the client, the Swedish defense, and the company or industry that will develop, build and deliver the solution. Of course, this also includes operating and maintenance data and a number of other administrative pieces about procurement costs, spare parts handling, and more.

Bottom line, it’s a variety of diversified tasks that, in order to be rational, must be equipped with effective tools to flow data back and forth between stakeholders in the projects. Today, open yet secure platforms are required for this type of solution, which on the PLM page is a signal for Siemens’ Teamcenter.

Rebecca Ihrfors said that this solution meets the main objectives of SDMA, which is to reduce the time it takes to produce and deliver information and to increase the quality and traceability of that information. She added that the agency also sees the PLM project as an opportunity to consolidate its already established working methods in requirements management, product data management and configuration management, among others.

"FMV is In the Lead"

The agreement between FMV and Siemens is based on a solution where the parties share both risks and opportunities, and on mutual trust that aims to build on and maintain the solutions together for several years to come.

“SDMA is at the forefront of the public sector when it comes to digitizing its processes, and the collaboration we now enter into together is very exciting. An increased degree of digitalization is just the right way to go to ensure the efficiency and quality increase that FMV seeks,” commented Mats Friberg, CEO of Siemens Industry Software Nordics.

Friberg further points out that Teamcenter is, “a modern, adaptable system that connects people and processes across functional silos. It provides control over product data and processes such as 3D design, electronics, embedded software, documentation and bill of materials (BOM)."

A Project Group of Seven People Responsible for the Introduction

What’s currently happening in the Swedish Defense Materiel Administration to get the systems in place? To begin with, a separate department has been created with seven employees to manage the project work, among other things, with the help of 30 coworkers borrowed from other parts of the organization.

CIO, Rebecca Ihrfors describes how the benefits of the project are about safer and more robust platforms.

“The softer gain is that we can grow in terms of new working methods and digitalization. It's a tough job, but this is the effect of the strategies and the documents that I as CIO and the authority management have produced. Now it’s time for delivery, and it is for real.”

Business World is Unit4's Flagship

When it comes to the ERP side, Unit4’s Business World suite and Prevero, it should be noted that authorities, municipalities, county councils, educational organizations, real estate contracting, project organizations and larger organizations with back office functions such as service centers,  are all verticals that make up the company's strongest side.

"Correct," said Unit4's Nordic head of business, Katarina Gunnarsson. “It is these verticals that we can and that we focus on. We have the business knowledge here and we have the software capabilities, and we also have a strong expressed desire to want to be even better at this.”

Complete Cloud-Based or On-Premise Suite

Unit4 has clearly played the offensive when it comes to expanding its software portfolio where the flagship is the ERP suite Business World.

Previously, this solution was called Agresso. Regardless of the label, Unit4 has been very successful in the market; especially in public operations, the education area, property management and on the service side.

In terms of size, they are among the five largest players in the Nordic countries, where they have the bulk of their market share. However, they also have an U.S. operation.

The company has a total of about 4,100 employees and annually generates revenues of SEK 5 billion – equivalent to just under $500 million.

Business World can be described as a complete cloud-based ERP suite. But the suite can also be obtained on-premise (locally installed) or as a hybrid. It contains modules for finance, HR/salary, planning and budgeting, purchasing management, project management, Enterprise Asset Management EAM) for plant maintenance, and field service.

In this context, Unit4 has built up what is called a "People Platform," which in turn connects to Microsoft's cloud services platform Azure.

More About the Prevero Solution

Prevaro provides  key functionality for Unit4's platforms, which handling such things as budgets and planning. Katarina Gunnarsson notes that the Prevero solution has developed particularly favorably in Unit4's hands after its purchase a few years ago.

For example, German analyst BARC and their Score analysis rewarded Unit4’s Prevero with the position as one of the leaders in Business Intelligence (BI) and integrated planning. Three years in a row, Unit4 has been included in the analyst's BARCScore together with companies such as IBM, SAP, Jedox and BOARD.

“For us, these awards confirm that we are on the right track with our product strategy. We have full focus on customer requirements, close cooperation and commitment which have played an important role in achieving this result, and we will do our utmost to continue on this path. But software development is a dynamic, constantly ongoing process,” Katarina Gunnarsson sums up.