As data volumes explode, business models change, digital commerce grows significantly and new sales channels emerge, having trusted product data is more crucial than ever before. At the same time, remaining competitive while delivering exceptional customer experiences across any touchpoint requires an agile, scalable, and flexible solution for trusted and relevant product data.
Organizations across industries have recognized product data as a strategic asset at the executive level. The increasing investment in master data management means many organizations are now challenged to choose the right strategy for creating a single, trusted view of master data. In the area of product master data management, this choice is leading to confusion. Specifically, the difference between product master data management (Product MDM) and product information management (PIM) technologies, at least superficially, appears subtle.
A product information management (PIM) solution is a business application that centralizes the management of product data and digital assets and streamlines collaborative data enrichment. It helps standardize and automate the increasingly complex demands of product information management and syndicates trusted, enriched and high-quality product information to customer touchpoints, sales, and marketing channels.
PIM improves cross-functional collaboration, streamlines critical workflows, and surfaces customer/sales opportunities that otherwise would have been hidden by disconnected, poor-quality product data.
The main objectives of a PIM solution are to:
Typically, the need for a PIM solution is driven by the sales or marketing organization. This demand arises as these divisions find they cannot adequately scale in their publication of increasingly complex content across the ever-increasing number of sales and marketing channels they must support. PIM users are normally performing a function directly related to a sales or marketing process. It will typically support a large number of internal and external (agency) users across a broad range of sales and marketing roles. With its strong focus on collaborative workflows, PIM allows multiple stakeholders to author a comprehensive set of product attributes needed by the business.
Product master data management (MDM) is the glue that binds an organization’s systems and information together. Mastering product data with MDM provides a single source of truth—based on trusted, accurate, complete product data—for any data-driven digital transformation across the business, including marketing and sales operations, omnichannel retailing, supply chain optimization, compliance initiatives, and more.
The primary purpose of MDM is to create relationships—between products, customers, vendors, employees, households, locations, and the like—and fuel analytical and operational business applications. Product data is managed within an MDM system, just like other business-critical data, with the intention of understanding the complete number and types of relationships.
With MDM, you can locate, access, and utilize trusted data exactly when and where it’s needed. To be able to support the end-to-end requirements of trusted product data, it should include the data quality, data integration, business process management, and data security capabilities that will enable you to:
MDM has a broader scope than a specific department or types of users. The recognition of a need for MDM could come from multipleplaces within an organization. Employees who recognize this need are typically trying to consolidate data across different functional or regional divisions in an organization.
Often the need is initially identified by IT, as they are frequently the ones who receive increasing requests to collect, cleanse, and cross-reference product data. Business users express the need for MDM using different terminology, all revolving around poor product data quality and low trust in any figures associated with product data (e.g.,sales, inventory, forecast, profitability). MDM spans multiple business objectives, departments, and lines of businesses across the organization. It helps organizations improve business operations by removing data inconsistencies that can seriously impact the business.
An MDM solution can help you:
The path to value should be based on your organization’s most pressing business challenges: What business challenge do you want to address by improving your management of product data? The below comparison table “PIM vs. Product MDM” highlights the typical business value delivered by each solution:
Sometimes, organizations decide to leverage both PIM and MDM. They may start with one solution and then add the other. They realize that to support their use cases and future master data strategy, they will need a combination of both capabilities. In this case, MDM and PIM enable a product master data ecosystem that delivers the capabilities and business values listed earlier in this article.
PIM serves as the business application for collaboration on product authoring, syndicating data to external systems and sales channels. But, it can also feed the MDM with accurate product content, so it maintains the Product Golden Record. Additionally, as an example, MDM can also complete the part of material data mastering.
MDM serves as the foundation to hierarchy, and enables reporting, analytics, and internal system processes. MDM will help your organization understand how many products the company sells, while PIM can serve as a collaborative product content management platform with more details about the products, variants, and assortments.
There is one key concept to remember when working with MDM and PIM solutions in tandem: Data should only be included in an MDM solution if there is a need to share the data broadly across multiple systems (e.g., internal, analytical, external, supply chain). With this concept in mind, you can accept that some of the product data will have its source and “golden record” outside of MDM. Specifically, the PIM system becomes the golden record for a large portion of the sales and marketing data that fuels most external channels.
For more information, check out these analyst reports:
