What is Product Information Management (PIM) and why do I need it?
Product Information Management (PIM) is the approach to combining people, process, and technology to manage product content effectively to help grow sales, improve customer experience, and reduce operating costs. PIM is sometimes also referred to as Master Data Management (MDM) of Product Data, Product MDM, Product Content Management (PCM), Product Data Management (PDM), Item Management (IM), or Catalog Management.
Product information is relevant to customers, channel partners, business units, e-commerce, marketing, sales, customer service, digital and translation agencies, and other functional areas. Ventana Research defines Product Information Management as technology that provides the ability to consistently manage product and related information being used by business processes and consumers. Ventana also notes that as today’s organizations add suppliers and increase the number and diversity of products and services they offer customers and partners, and as customers increasingly interact with organizations across multiple touch points or channels, organizations need to address limitations in the ways they acquire, create, manage, and distribute product information, including related attributes and content that describes the product.
“By 2022, one-third of organizations will require new technology to redesign product experiences to meet expectations of buyers and customers.”
While PIM is the more commonly used term in the industry, Gartner refers to it as MDM of Product Data.
According to an AT Kearney study a few years ago, poorly maintained and synchronized product information cause companies to lose about 3.5% of their sales each year, spend 25 minutes per SKU per year manually cleansing out-of-sync product information, and spend between $40 to $400 per erroneous invoice to reconcile more than half of the invoices they generate each year. New product introductions take an average of 4 weeks mainly due to inefficient and error-prone approaches to managing and exchanging product information. Delays in new product introduction means lost sales opportunities – a best in class PIM capability should enable a product release to market within a week.
In recent times, the rise of the digital storefront and consumer preferences for rich product content and the ability to shop across channels has elevated the importance of PIM as a critical business capability. As customers increasingly shop across digital channels, companies are launching new products through new channels. According to the Aberdeen Group, companies are also aligning their brand and sharing product and other operational data across channels to deliver a seamless customer experience across channels (i.e. an omni-channel experience) and prevent lost sales opportunities. An integrated approach to product and other data sharing is required for this strategic shift, and effective product data management is a key enabler of an omni-channel commerce capability.
Another reason why some industries are streamlining their product information management capabilities lately is compliance with government regulation. For instance, the FDA UDI (Unique Device Identification) regulation in the US mandates medical device companies to submit applicable product information to the FDA, and the European Union (EU) Food Regulation 1169/2011 mandates that companies provide consumers access to product information, such as nutritional value, ingredients and instructions, prior to purchasing pre-packed food products via distance and online sales.
A Product Information Management software solution (or Product Content Management or MDM of Product Data software solution) is a data management solution that helps:
- Aggregate and establish a single source of truth for product data and related digital assets that typically exist in disparate systems
- Enrich and govern product data on an ongoing basis to keep it clean, consistent, and relevant
- Share product data with other enterprise systems, customers, market places, and channel partners (and regulatory authorities in some cases)
- Provide catalog management capabilities including supplier data on-boarding, localization, managed translation, digital asset management, data pool and market place synchronization, and automated print/web publishing
Here is a depiction of a PIM software system (courtesy Akeneo).
Here is another depiction of a PIM system (courtesy Riversand).
Unlike e-Commerce systems that are widely recognized and adopted, awareness about what a PIM software solution is and how a best-of-breed PIM system can help large and small businesses is low. However it is growing steadily as more small and medium sized companies are deploying it for digital commerce, and as more affordable PIM solutions are becoming available in the market place.