Update on the SAP-Siemens Partnership: Roadmap to the Digital Thread Across the Product Lifecycle

On 14 July 2020, the engineering powerhouse Siemens  and the enterprise powerhouse SAP  announced their strategic partnership with the view to marry up their PLM and ERP portfolio offering—working towards an integrated Digital Thread. The partnership between the two giants promised an unprecedented solution alignment between vendors to increase data visibility and transparency across product and asset lifecycle management. On their first marriage anniversary, on 14 July 2021, SAP and Siemens renewed their vows by issuing their joint development roadmap to deliver upon that promise.

In this article, I review the SAP-Siemens joint capability roadmap, and discuss expected value to customers and what this might imply to PLM and ERP competitors when building Digital Thread solutions.  

From marketing alignment to portfolio value enhancement, one assumes that SAP and Siemens are often engaged with similar industries and customers, so their partnership aims to better work together and generate new revenue streams. Some say that “their partnership was 10 years in the making,” hence it is not a surprise that it took one year for them to define and initiate delivery on their ambitious joint development roadmap towards an integrated “Digital Thread across the product lifecycle.”

“By teaming up, we are putting our customers on a faster path to bringing together the best of our leading PLM and ERP platforms. Our goal is to help customers to break down siloes so product design teams, manufacturers, and service managers have the information they need to quickly create and manage customer-centric product and service offerings.” — SAP Company News (14 July 2021)

In July 2020, I was speculating about the rationale and opportunities behind the Siemens-SAP marriage, and what we could expect from the partnership—would it be a marriage of reason or convenience?

• Marriage of reason: filling a market gap or consolidating their respective product portfolios?
• Marriage of convenience: responding to business risks or market threats?

What might have initially been perceived as a marriage of convenience, is clearly turning into a marriage of reason. A year ago, early interrogations were raised about joint positioning, and the ability of the SAP and Siemens tandem to disrupt the market when it comes to proactively developing a seamless interface between SAP S/4HANA and Teamcenter. As giants go, they certainly moved slowly due to heavy inertia. It probably took them time to define a credible roadmap and assess implications to existing customers. In addition, they would have to consider overlapping elements of their PLM-ERP offering; one certainly being in the PLM space with SAP PLM.

This marriage is a great opportunity to leverage common sales strategies across their respective customer base. By getting closer together, SAP and Siemens might openly be sharing and expanding their market reach (while jointly accessing a wider share of the customer wallet). This would certainly allow them to outpace the competition by recommending each other’s offerings in context of customer engagements.

On a strategic front, SAP and Siemens took the opportunity to architect a capability to integrate to their respective SAP and Teamcenter solutions; with a view to reduce implementation complexity, possibly reduce total cost of ownership (pending more information on the actual licensing model for such an interface).

In April 2021, Siemens issued an update to highlight an extension of the SAP partnership to cover intelligent services and Asset Lifecycle Management. The new scope was described as follows:

• “Next phase of strategic partnership between Siemens and SAP delivers new predictive service and collaborative asset management plus integrated enterprise portfolio and project management solutions.”
• “New cloud solutions close the loop between IT and OT systems through a model-based digital thread enabling real-time business information, feedback and performance data over the entire product or asset lifecycle.”

• “With an initial focus on discrete manufacturing, Siemens will begin to offer SAP Asset Intelligence Network, the SAP Asset Strategy and Performance Management application, and the SAP Enterprise Portfolio and Project Management package.”
• “SAP will offer Siemens’ Teamcenter software service lifecycle management (SLM) portfolio to enable an ecosystem with integrated service engineering and asset operations.”

The common vision to create a Digital Thread offering was reiterated by SAP and Siemens executives:

“Through this partnership we can offer unparalleled benefits to our customers by delivering a digital thread across production and supply chains—from product design, production and operations to maintenance. This will enable companies to improve overall business performance and return on assets. Taking advantage of cloud solutions such as the SAP Asset Intelligence Network to strengthen collaboration and information exchange, together Siemens and SAP can help our customers accelerate Industry 4.0.” — Thomas Saueressig, member of the Executive Board of SAP SE for SAP Product Engineering (14 April 2021)

Per one of the SAPPHIRE NOW conference sessions in June 2021, in a discussion between Raymond Kok, Senior Vice President at Siemens, Edwin Severijn, SVP & Managing Director for EMEA, Siemens Digital Industries Software, it was mentioned that the partnership would initially focus on discrete manufacturing, excluding process manufacturing industry customers, with the following functional scope: supplier collaboration, systems engineering, visualization, enterprise and portfolio management, product configuration continuity and end-to-end processes such as service lifecycle management. Interestingly, it was also mentioned that manufacturing capabilities were out of scope; hence, focusing on upstream product development and downstream asset and service lifecycle.

This month, on 14 July 2021, Siemens released another update to announce the high-level scope and timing of the joint roadmap, towards the integration of SAP S/4HANA and Siemens’ Teamcenter. It will be in three phases “through the end of 2022, with additional phases planned beyond this time to address new digital threads,” quoting the Siemens post:

1. “Phase I (October 2021): product engineering fundamentals, establishing a framework of core business scenarios on a shared domain model that will underpin end-to-end business processes. This enables enhanced traceability, federation and linkages across the Siemens and SAP system boundaries.” 
2. “Phase II (Spring 2022): optimized integration between product engineering, extended supply chain and manufacturing operations, and delivers the foundation for advanced capabilities such as variant rules and schema, project and portfolio management and integration to manufacturing.”
3. “Phase III (Fall 2022): bi-directional [data] traceability and closed loop collaboration between manufacturing engineering and production engineering covering use cases such as cross-system impact analysis, change initiation, and process execution.”

Overall, the roadmap looks very comprehensive, composed of detailed data flows, covering engineering and manufacturing BOM, document management, integrated change management with automated triggers, plant information, and more. It would probably benefit from a graphical representation to highlight integration storyboards and high-level use cases. Also, it would be interesting to hear from Siemens about enhancements or modifications which might be required on the Teamcenter side to complement the SAP development roadmap.

Finally, some of the features on the SAP side seem to relate to SAP ERP and/or SAP PLM. It would be good to hear from SAP about their portfolio strategy concerning SAP PLM, if and how it will evolve, and how SAP PLM would be positioned to customers concurrently to Teamcenter or other PLM platforms. This would provide a better understanding of the art –of –the possible when it comes to implementing (and configuring) master data management strategies across the PLM-ERP thread.

What are your thoughts?

• Siemens Company News (14 July 2021): The Roadmap to the Digital Thread Across The Product Lifecycle.
• SAPPHIRE NOW, Session SCM214 (8 June 2021). How Siemens increased visibility and transparency with a Digital Thread.
• Siemens Company News (14 April 2021): Siemens and SAP expand Partnership to Digitally Transform Manufacturing.
• Grealou L (2020). Siemens-SAP Partnership Unites PLM with ERP. Marriage of Convenience? Engineering.com.