An old maxim of business is, "Do one thing and do it well." Yet successful corporations are almost always defined by multiple strategies for growth supported by many products and services, and there is a natural tendency for companies to subdivide these into logical units. As such, it's no surprise that companies have come to own a lot of product silos that tend to have their own computer systems to support them. These silos have made managing products at the enterprise level a longstanding challenge for business.
From an information management perspective, the process of developing, producing, distributing and supporting products is tremendously complicated when there's no one place you can go to see the entire product catalog for the whole enterprise. Some companies create resources on corporate intranets called "Product Hub," but these might only list a small part of the company's product line or geographical reach.
Creating a single product information hub can bring big advantages. For a business case, I'd start by quantifying the cost of not having one. Are new products arriving on store shelves several weeks before the matching collateral arrives? I personally know one case in which an electronics retailer increased revenue by $200 million per year by synchronizing the timing of product shipments to stores with the arrival of their supporting product brochures.
New product introduction is another area where a single product information hub can deliver savings. Many companies readily acknowledge inefficiencies in manual processes that often lead to too many PowerPoint presentations, too many spreadsheets and too many meetings that become necessary because there is no central repository for critical information. Far too often, there is no automated workflow for simple information movement and approval, which leads to lots of retyping as products move from one part of the lifecycle to another and from one system to another.
Better analytics are possible when you have a single view of the product. You'll no longer need to reconcile products in description fields or worry about identical products with different part numbers in different systems. As robust automated business intelligence and analytics become available, product profitability analysis and faster response to changes in demand are within reach, perhaps for the first time.
PIM (or product MDM, as it's often called) doesn't necessarily provide direct analysis, but it makes analysis possible by providing accurate, clean, timely and consistent views of product data across the enterprise.
For very large companies, another benefit of PIM arrives with better search. More companies are selling products through their websites, and e-commerce works best when customers can easily answer their own questions. If millions of products are not set up for search, the online shopping experience suffers greatly. PIM helps by providing a faceted classification to drive search navigation.
This benefit also applies during new product creation. Some large companies create thousands of new products every month that are duplicates of existing products. Imagine the process and headcount savings if that cost could be avoided through better search capabilities, based on a complete and accurate product repository with a fast, thorough search facility built in.
As companies tackle enterprise transformations that consolidate systems, the idea of every major application having its own data store of product information sounds more and more obsolete. Just as composite applications are created where the application will call out to an MDM hub for customer information, we'll see the same need for product information. The sales force automation, customer relationship management or enterprise resource planning system that has its own store of product information will seem charmingly obsolete in a few years.
Systems evolve as companies evolve. Specialized applications that do nothing but manage master data exist today. Modern service-oriented architecture-based integration capabilities are widely in use, and we're starting to see applications written from the ground up to be aware of MDM platforms.
If CRM and ERP platforms were better able to manage master data, perhaps we wouldn't need MDM solutions. But the more I work with front and back-office systems, the more I see the changes in mindset that drove me into the MDM field in the first place. MDM systems treat customer data and product data as transactions - a path to an order or an invoice. They don't understand the lifecycle of the customer and the product. CRM and ERP systems are very good at processing transactions, but not so good at managing master data, data quality, hierarchy management, enrichment with third-party content, data governance, matching, cleansing and duplicate resolution.
So even though my introduction to PIM was through the ERP world, I've come to appreciate the much richer world of PIM hubs and what they can do, and the power and subtlety of the product information management world. The benefits can be substantial if you go looking for them in your enterprise.