Dassault Systèmes, a 3D design software and digital mockup solutions provider, has been at the forefront of innovation in the product design software space. Recently, Dassault's executive VP and chief strategy officer, Monica Menghini visited India. In an interview with CIO India, Menghini threw light on Dassault Systèmes' big transformation into a 3DEXPERIENCE company.
Dassault Systèmes calls itself as the 3DEXPERIENCE company. Can you demystify this term and its relevance for modern companies?
Dassault Systèmes’ positioning as 3DEXPERIENCE Company is because of the company’s legacy of born as a company providing software for 3D design. Experience is the future of the company and the software industry as well. Dassault Systèmes is the world’s only company that can provide 3DEXPERIENCE universe which means an online environment that is using 3D to visualize and simplify the complex world of business.
“3DEXPERIENCE platform’s user experience was enhanced to be so friendly that the people from the company’s different disciplines access and use the platform efficiently.
EVP and Chief Strategy Officer, Dassault Systèmes
Experience is the economical offering which can be different for products. Uber is one of the biggest innovation platforms because they reinvented mobility experience for users than launching another product. In my software industry, I define experience as we want to provide a customer with software, services, and content. An experience is bigger than the product by definition. Experience in economic term means when you buy a product or device you get the services inside or bundled. And revenue stream from services is sometimes bigger than the cost of the device.
Has your company’s software and services enhanced the business for your customers?
That depends on the criteria in the software industry, which usually is the performance KPIs of speed, for example as the software increases the capability for the client from the lifecycle of designing to speedy production.
3DEXPERIENCE platform is not just about speed but how many people can have to access the platform. The software industry was very complex and it was designed by and for the geeks. The engineers’ population is only 10 percent of the employable force in a typical enterprise. For software industry to expand there needs to much more emphasis on user experience. 3DEXPERIENCE platform’s user experience was enhanced to be so friendly that company’s different disciplines’ people could access and use the platform efficiently.
The first rule of designing software of the 21st century starts with desirability which is not the rule applicable in the generic software industry. It is about how much pleasure does the user derive while working and it is a matter of emotional sensation. Then comes factors around usability, scalability, and others of the platform. We are pioneering for an approach for the democratization of complex big data platform like that of Dassault Systemes.
You have been with Dassault Systèmes in different roles since 2009. How has the company changed its DNA and your role changed? What’s your report card?
Those before me and now at Dassault will echo the sentiment of the company has seen a massive transformation. I have been the impulse to the change. Joining Dassault from a different background of an expert in business engineering and not software engineer meant my approach was more business oriented at the company.
Monica’s mantras for product companies’ CEOs
· Keep the business management as simple as possible.
· Discover power of marketing as management process.
· Ensure IoE for customer across the product lifecycle.
· Services stream is often bigger than product cost.
· Auto modeling of software powered by AI is real.
Dassault Systèmes today is not simply positioned different but it’s a whole structure of the corporation. A new industry division - global business unit - was put in place. The geographies were implemented with company’s real subsidiaries across the globe. The product portfolio was radically changed. Not only did we created the mothership product 3DEXPERIENCE but its architecture and every product were redesigned and coded differently. It is not corporate image transformation but a deep transformation at the core.
Has the massive organizational change increased your market spectrum beyond dominance in aerospace and defense, manufacturing and engineering to other verticals?
My recommendation of creating industrialization was a business unit approach and not a matter of verticalizing software used for aero defense to be used in high-tech industry as an example. The full strategy for industries for the global business unit was built starting from BI around market analysis, defining and deciding our play across 12 different sectors. It was a blue ocean opportunity for Dassault to play in one sector than another. I established the rule to compete in 12 industries and 69 segments (each vertical has 4 to 6 segments). Once I defined the market landscape, we developed ‘the killer’ solutions for each Industry and each segment. Dassault is defining what R&D needs to implement and hence the entire system was put upside down.
Dassault’s CEO Bernard Charles decided to move out of IBM dominance in 2008/2009. The reality for 35 years was the fact that though Dassault has sold software to everyone it was IBM. As the Big Blue gave their shopping list and we acted as mega R & D lab. Bernand was taking the decision becoming independent. And I luckily came into the system at the same time.
Becoming independent company isn’t just selling software but the overall rejig of product roadmap, offering package and numerous factors in the commercial of R&D gets completely changed. The flow of value creation today starts from industry analysis, portfolio management, brainstorming with industry folks, creating famous brands, define a business process for R&D. That’s the chemistry of product development at Dassault.
Is Dassault Systèmes still an R&D lab for big OEMs or it’s a stand-alone software giant now?
We are a completely independent software company but we can partner with other software companies or provide complementary solutions. The GTM strategy includes to develop the software or we buy a company with capabilities and then integrate into platform. The third option being to partner with a software vendor for a specific vertical, we provide the platform and they provide the additional capabilities by a GTM driven by me or them through a reseller agreement.
What the company’s GTM today to effectively address the wide world of industries across the globe? Are small companies on the radar too?
Dassault Systèmes has a three-pronged route through a direct sales force and two indirect routes through the reseller ecosystem. We cover from big clients to SMB to very small companies through these three channels of sales or systems of sales. We have the same model across every single region or country though there could be two sales channels in some countries. Majority of our worldwide route is business transformation channel for the big clients, value solution channel for mid-market companies and professional channel for the very small company including start-ups.
Our Systems Integrator channels are managed at worldwide level as well as at local level depending on the market requirements and skillsets expertise. There are mega partnerships with global players like SIs and ISVs. And then in the local market, we partner with the best channels specialized in the certain segment in that certain industry in a certain country.
How important is the CIO community for your software pitch? Has the buying centers at the customer end shifted to C-suite and LoBs?
The engagement model of our salesforce is usually based on the value stream of the software for an industry. There are buyers who are conceptualizing the next product of the future, and then there is a mega discipline of design, engineering, manufacturing, sales, marketing, after sales on different levels. The value goes through the value stream. From an innovation perspective, it is difficult to position between design and engineering as CIO will buy software for the engineers or usually the plant manager is responsible to buy software in the manufacturing industry.
We identified the responsible stakeholders to best-suit the customer’s value stream to our software. Once we get the price point to run the enterprise capability, we directly approach company’s CEO and not CIO. Sometimes CMO gets involved more too. By nature interacting with teams of product, engineer, marketing finance, design become difficult and we usually contact - if there exists - chief innovation manager or the person in charge of innovation lab.
The CIO role as an influencer of procurement depends on industries as in traditional verticals CIO is a software procurement person as he validates the money spent on that software. We speak to the business stakeholders and technical executives of the company to create the right platform for that customer and the industry.
Your key mantras for product companies’ CEOs.
The first mantra that I used at Dassault was to make the engineers understand that they were doing too complex for their desire. Leonardo Da Vinci’s classic statement,’Simplicity is the ultimate sophistication’ is good for business. The more complex your business management, the more chances that you screw up.
Secondly, the modern CEOs have discovered the importance of marketing as a management process. Today the majority of decisions taken are related to marketing management process from conceptualization of things to be the first to arrive on the market. Marketing is not about how good my company looks but how good my customer looks after my intervention.
What are your technology bets of the future? Do you feel IoT an overhype jargon?
IoT is very old stuff. The very first time I heard this word was when an executive in P&G detergent warehouse attached RFID to an appliance. That’s why I wanted to reposition from IoT to IoE (internet of experience) of providing the very first capability of modeling as a smart object and the capability of systems engineering to our customers. And the last stack of IoT providing real-time analytics of the objects to my customers. At the end, the connected object is delivering the information which is real value for customers.
Software-as-a-service is a big focus for us.Therefore the cloudisation of Dassault’s installed customer base becomes important as we want all the company’s disconnected legacy connected with customers. The commercial initiative created by me will speed up in 2018.
The impetus on R&D continues as we further leverage massive usage of AI embedded in our software through collaborative bots that analyze real-time throughout the process. The frontier would be generative design, generative engineering, and generative manufacturing, where software actually simply needs to know the exact behavior and the software create the objects, parts, and process. The auto-modeling coming from Artificial Intelligence is a reality without much validation of humans.
Another trend is the application throughout the line of the humanization of software. The software industry has been invented by geeks for the geeks historically but today it is democratized as much as possible in the hyper-connected world.