Product Information Management (MDM Summer Series Part 5)
In this “summer series” of posts dedicated to Master Data Management for Product Data, we go across what we identified as the five most frequent use cases of MDM for product data. In this post, we focus on the Product Information Management use case.
Product Information Management (PIM) is the most popular use case of MDM for Product Data. For companies that distribute off-the-shelf products, this has become a must, especially where those products are distributed across multiple channels. This is probably why this use case drives so much attention from solution vendors, even if it applicable only in some industries.
As it is focused on customer facing processes, business drivers are relatively straightforward to define: trusted and easily accessible product data boosts product attractiveness, and as a result, it drives new customer demand, increases transformation rate, drives up sales, cross sales or follow-up sales, etc. This is a business case I already discussed in a previous blog.
The business case for PIM is pretty well documented by consulting companies and industry analysts. Ventana Research shares very interesting benchmark data. They found that the benefits include the elimination of errors while referencing product data and sharing it with the customers, cross-sell and up-sell potential, and improved customer experience. Although PIM is not new, the research show that organizations believe that they still have a long way to go on their maturity curve: it shows that only a quarter of organizations trust their PIM processes completely, while 94% use spreadsheets heavily or moderately in their processes, despite the fact that one-fifth find major errors in them frequently and another quarter find them occasionally.
In addition to improving the product induction process and boosting product attractiveness, PIM is drives also the expansion of the product catalog, now that many companies are in the process of extending their product portfolio into a long tail for example by creating online marketplaces where third party vendors can participate. This mandates a very smooth and low cost approach when referencing new products, or changing their characteristics like price or availability in real time; the goal is also to ensure than product data is accurate as early as possible in the information supply chain, delegating the responsibility of the data quality at the source of input, sometimes at the vendor level.
Continued on Part 6. See also what are the key capabilities needed from MDM solutions to address this use case.