The System Relevance Of Industry Software
The existence of the industry software and engineering services sector is not threatened by the Covid 19 pandemic. Just as the world needs a vaccine, protective clothing and respiratory equipment against the virus, the industry needs IT more than ever to digitalize its entire processes even more. Companies that are already relatively well advanced in their digital transformation are currently in the best position. This is shown by the responses to a survey of suppliers at the end of April, beginning of May 2020.
In the months since the outbreak of the pandemic, which industries, which activities, which employees are systemically relevant has been a recurring theme. The still underpaid and insufficiently protected nursing and hospital staff are of course among them, as are parcel delivery staff, cashiers and police officers. But what would have happened in the partial shutdown of the economy if there was no digital networking?
Home office has found enormous popularity. Even companies that, before Corona, rejected all requests from employees for partial work from home were suddenly able to switch over and found hardly any work that could not be done just as well without going to the office. The offices were empty everywhere. Whether and to what extent they will fill up again in the future is as uncertain as almost everything these days.
An initial collapse of the network infrastructure due to the enormous additional load was quickly remedied. The tools were available and tested. Suddenly, managers from locations around the world were able to participate virtually in conferences and meetings. For the majority of office work, the changeover was more or less problem-free. Even if the right equipment from table and chair to video-capable notebook could not be conjured up at home in every case.
In industry, employees are faced with special challenges in this respect, and this is particularly true for the technical areas. This is not only about access to the company server and the exchange of texts and files. Here, work must be ensured, for example, with engineering software such as CAD or an order processing system such as ERP. And the data that goes through the lines is very extensive and also very critical and therefore particularly in need of security.
It is even more difficult for those areas of production that are particularly critical with regard to the possibility of infection. Here, extensive technological prerequisites must be created in order to be able to control as many work steps as possible from a distance.
In recent years, digital transformation has been one of the most important topics at industry trade fairs and congresses. Now those who started early can be happy. The importance of digitalizing processes and the availability of a continuous digital thread throughout the entire life cycle of products and services is shown by the examples of a number of providers (in alphabetical order) who share their initial experiences with the situation following the outbreak of the novel corona virus.
ABB's financial results for the first quarter of 2020 show a 7% decline on a comparable basis and a 30% decline in net income. There is no question that the dramatic global economic cut of the pandemic will have a significant impact on ABB. The full extent of the impact cannot yet be assessed because the capital goods manufacturer generally conducts longer-term business. Short-term cuts such as those currently being made can therefore only be seen in their effects to some extent.
But both customers and ABB itself are taking a very offensive approach to the current challenges. For example, ABB's Robotics and Manufacturing Automation division is providing many software solutions free of charge from March 27 until the end of the year. And customers are using ABB's solutions and products very creatively.
Nagami Design, for example, is a furniture design company in Spain that recycles plastics and uses 3D printing to create new plastic furniture. After Spain was hit extremely hard by the pandemic and showed a dramatic lack of face protection, Nagami switched to the production of face shields. The open source model Pruda for such masks was used for a special model for 3D printing with an ABB robot. Instead of a gripper, the robot has a kind of 3D printing syringe, which is now used to produce the face masks. The robot prints seven times faster than a normal desktop 3D printer. A mask is ready every 5 minutes, 500 per day. (Picture © Nagami Design)
Another example: Robot Studio, one of ABB's tools now available free of charge, allows virtual programming of, for example, the industrial robot SCARA on its digital twin. Instead of having to go to the factory for commissioning and training the robot, the specialists at the customer's site can now perform these tasks virtually from home. The robots are then ready for use on site without any further programming.
Planned sales of Aucotec for March and April are at the same level as last year, but as all projects are long-running, changes cannot be detected so quickly. In addition to stopping production and short-time working, as in the automotive industry, other customers are also expanding capacity, especially in the pharmaceutical industry. Some projects are being postponed, but so far there have been no cancellations. For Aucotec it pays off that customers are spread across almost all industries.
From the point of view of the provider of the Engineering Base platform (picture © Aucotec), digitalization has currently gained significantly in importance once again. The pandemic is a real driver for digitalization. To work globally distributed and consistent on a common project and to enable all responsible persons to have an overview of the project progress at any time, especially in times of a prescribed home office, is more important than ever.
Aucotec has expanded its support team to provide advice and assistance to customers. It helps quickly and unbureaucratically, for example, with the change of access from the company's license server to home offices. Seminars and training courses have been converted to remote training, currently at a significant discount. At Aucotec itself, paperless office, Microsoft team use, and home office secure infrastructure were already part of the program before Corona. There were therefore no conversion problems.
Dassault Systèmes, Stuttgart
The consequences of the pandemic are being felt both in society and in the economy. We must break new ground, and Dassault Systèmes is doing so too. At Dassault Systèmes, the new situation has already led to numerous changes, which are by no means all negative. For example, management has introduced weekly virtual meetings in which the various divisions report on their current developments in short videos. All of a sudden, all areas become much more visible to everyone else than ever before.
Production companies that cannot send all their employees to their home office are facing the current situation with different concepts: This can range from a changeover from five days in two-shift operation to six days with three shifts to short-time work and temporary production stops. In general, however, the pandemic is noticeably increasing openness to digitalization and networking projects. There is a real kick for the cloud. Those who had already put out sensors in this direction in recent years are now significantly expanding their initiatives. By providing computer licenses for the 3DEXPERIENCE platform in the cloud, many companies have been able to let their employees work seamlessly and agilely from their home office.
The takeover of the US software house Medidata with its numerous life science solutions in the summer of 2019 is currently leading to a major shift in activities. In the search for a vaccine alone, Dassault Systèmes is directly involved via Medidata in more than half of all clinical tests worldwide.
Simulation and system modelling, for example through Simulia, are also receiving an enormous boost. In the construction of the Leishenshan Hospital in Wuhan, China, the aim was to simulate the distribution scheme of air conditioning systems in order to safely discharge contaminated air (Picture © Dassault Systèmes). Now there is a strategic partnership with the Asian Aden Group for planning, construction and operation of hospitals. The healthcare and life sciences sector is therefore becoming an important application focus for software solutions from Dassault Systèmes.
ECS Engineering Consulting & Solutions, Neumarkt
At system integrator ECS, with its focus on PLM, there is more rather than less to do since the outbreak of the pandemic. However, projects involving long-term PLM concepts are currently running at full speed. Some companies are also tackling the migration from one large system to another or the consolidation of the IT landscape. Just as the closure of restaurants and hotels offers an opportunity for renovation, some industrial companies are taking advantage of the temporary calm to carry out time-consuming reorganization.
The most important innovations for ECS itself are the switch to home office and video conferencing. This makes it clear what immense possibilities digital networking offers. But the limits are also becoming apparent: When initiating IT projects, you must sit at the table with the decision-makers. To physically experience the dialogue partner is something completely different than just seeing him on the screen and hearing him over a microphone.
Where previously many meetings were held unnecessarily in some companies, video conferencing is helpful and enormously cost-saving. All the more impressive is the enforced lack of personal contact where trusting cooperation is at stake.
ICP Solution, Hamburg
Many users of the PLM system Agile e6, which is supported by ICP Solution, are also severely affected by the pandemic. Short-time work and a halt to production are the main features of the situation. The extensive economic standstill has led to many discussions at ICP with customers about cost reductions and the postponement of consulting projects. However, the solution provider has also received orders with a different focus, particularly because of the current situation.
For example, long-standing customers approach ICP and order external maintenance to keep the system running even when their own specialists are absent, something that was previously done in-house.
ICP will only feel economic losses after a delay. Only less than 30% of annual turnover is accounted for by services, where almost every second project is now interrupted or postponed. The greater part of revenues comes from software and software maintenance and was almost unaffected by the pandemic.
Since IBM is mainly in the B2B business and there to a large extent with the bigger companies, the provider has mainly longer running projects, on which the sudden shutdown of the economy does not affect so quickly. In the long term, however, the pandemic could also have a significant impact on IBM.
First of all, the conversion of many customers to home office, video meetings and remote operation brought additional and also new business in various areas. The main reason could be that suddenly all gaps in the security concepts of the companies became apparent. Suddenly, business-critical and competition-decisive information is on its way over the network, which was previously believed to be secure from external access. Suddenly they are easy prey if no appropriate precautions have been taken.
The hour of cloud solutions is therefore also the hour of data and system security. In this respect, IBM is relatively certain that the current situation will lead to even greater demand for cloud solutions in the medium to long term. Much of what was considered secondary in the normal times before the pandemic suddenly ranks very high and forces companies to make quick decisions.
keytech Süd, Sulz am Neckar
Compared to the time before the outbreak of the pandemic, the project employees of the PLM provider keytech Süd in the Black Forest have considerably more work, especially in consulting. There were no cancellations of projects, only individual postponements. But all in all keytech Süd has to work through a huge mountain of tasks rather than putting its feet up.
The managing director Frank Schlupp says that the pandemic is like a catalyst. There is a shift of customers towards digitalization. What was only hinted at in the last years is now rapidly becoming reality. PLM is to function more and more as a central data hub, and the mapping of the digital information twin in the form of a product lifecycle file is clearly picking up speed. The processes are analyzed and documented with BPMN 2.0 (Business Process Documentation). Then they can be automated and executed. A huge added value, says Frank Schlupp.
Working from home has increased customer demand for solutions that can be used to access the company server. Cloud platforms such as Microsoft Azure are becoming increasingly important. The PLM environment is completely available in this cloud service. Initial positive experiences are paving the way. And, of course, customers are seeking the support of their key system suppliers. Thus, for keytech Süd, business is expanding rather than collapsing in the PLM area.
Oose Innovative Informatics, Hamburg
oose is primarily a consulting and seminar service provider with a clear focus on methods of software and systems engineering. For this reason, the contact ban and the distance requirement almost amounted to a temporary halt of business activities. After all, until the pandemic, almost all training and consulting sessions took place with the personal presence of all participants.
Now everything has been changed over to online meetings and trainings and is working very well. You have to make adjustments to the process and, for example, provide for longer breaks. But some customers don't want that as a matter of principle, they insist on the kind of seminars they were used to. On the other hand, however, the Hamburg-based service provider has received new inquiries due to the increased use of digital tools, which now focus on learning how to use such tools.
While some, under the pressure of enormous cost-cutting on the part of the controlling department, are currently tending to wait and see and postpone projects, there are also new orders: Especially in the field of medicine there is a growing need to acquire knowledge in software and system development.
And there is something else that is pleasing: Within the company itself there was also reluctance to hold digital seminars and conferences. This has disappeared overnight with Corona.
After an initial shock in early April due to the corona restrictions, PROCAD, the provider of the PLM system PRO.FILE, is slowly returning to normality in business life. Although there is still a great deal of uncertainty as to when and how strongly the economy will pick up again, regardless of whether they are among the winners of the crisis, a number of companies have recognized that it is also an opportunity to restart with new resources.
There are customers where the PLM project is explicitly allowed to continue working at 100% despite production stop or short-time work. Some even accelerate their PLM project if they are active in the relevant industry, for example, or if they have received corresponding state or official investment funds or subsidies.
The digital transformation was massively accelerated by the Corona crisis. PROCAD has significantly more inquiries about the use of asynchronous communication tools such as MS Teams or Linkando (https://www.linkando.com/) and PROOM (https://www.pro-file.com/de/proom-dateiaustausch/). And the use of products via VPN, remote desktop and in the home office context in general has become standard.
According to PTC, some customers, particularly in Europe, are currently intensifying PLM upgrade projects to enable access to engineering data from outside the office. The Belgian automotive supplier VCST Industrial Products, for example, is accelerating its PLM plans, taking advantage of the current standstill.
Overall, from PTC's point of view, the pandemic makes the weaknesses of paper-based processes particularly clear. Numerous teams in industry are accelerating the transfer of their data to Windchill (PLM). PTC Cloud customers are supporting employees in switching to cloud use to facilitate the increasing work from the home office. And customers who have never been open to the cloud have now decided very quickly to make the switch.
The visualization of PLM data with Windchill, especially Creo View, is also currently experiencing a clear upward trend.
Siemens itself is one of the major providers of industry software, with some 25,000 software specialists. The negative effects of the pandemic are limited. Of 120,000 employees in Germany, less than 2 % (1,600) are on short-time work, Joe Kaeser was quoted by Bayrischer Rundfunk (BR). On the other hand, customer enquiries are increasing precisely because of the current situation.
Circuit board assembly at Amberg (photo © Siemens AG)
On April 19, Klaus Helmrich, member of the Board of Management and CEO of the Digital Industries Division, explained to BR how much the advantages of digital networking are now becoming apparent. "Employees who are responsible for production, who are on site for service, who are responsible for operations, have remote access to the individual machine statuses and must of course go on site in the event of a fault. But if the operation is running normally, we are able to control this operation with 40% from home and keep it alive".
Especially in times when it is important to have as few people as possible on site at the factory, such technologies are obviously interesting for many customers. Especially since not only machines can be controlled in production. If entire company processes are networked, developers can also work from home and exchange digital information with their colleagues, says Klaus Helmrich.
At Siemens, we're hearing that customer interest is huge, according to BR. Although car manufacturers and machine builders are currently still reluctant to place concrete orders.