Next Generation of Product Information Management Empowers Digital Business
Organizations in all industries face various difficulties in managing product information. The most serious is providing complete, engaging information to consumers and customers on the internet. Newly developed products, mergers and acquisitions, changes to pricing and promotions in online commerce spur business growth, but these factors also increase the amount and complexity of product-related data and content. In addition the digital economy offers a new generation of services that are sold by subscription and packaged in various options and price points.
Organizations in all industries face various difficulties in managing product information. The most serious is providing complete, engaging information to consumers and customers on the internet. Newly developed products, mergers and acquisitions, changes to pricing and promotions in online commerce spur business growth, but these factors also increase the amount and complexity of product-related data and content. In addition the digital economy offers a new generation of services that are sold by subscription and packaged in various options and price points. As well, global diversification of suppliers, customers and business partners forces organizations to manage data quality and consistency in multiple locations, currencies and languages.
Many organizations have successfully implemented applications to manage manufacturing, the supply chain and other processes involved in building and shipping products, but ineffective information management hampers these processes and slows the pace at which organizations can introduce products. The rapid pace of bringing products into new channels and distributors, as well as seasonal dynamics, makes it harder to synchronize and update products in timely fashion throughout supply chains and to customer outlets.
Some organizations have attempted to address these challenges by building custom systems to integrate and distribute product information. Our previous research on product information management (PIM) found more than one-third (37%) of organizations using custom code and almost half (45%) using manual processes; both these approaches limit the adaptability and efficiency of product information management. Another complicating factor is the use of spreadsheets for PIM: One in three (34%) said they use them heavily, and almost half (46%) use them moderately. We think it is no coincidence that almost half (46%) of these organizations reported finding major errors in their product information. Thus it is not surprising that more than half (57%) said they plan to change the way they manage product information in 12 to 18 months. I have written about the current state of PIM software in a perspective on our upcoming Value Index, in which we are busy assessing the technology for 2016 and preparing guidance on vendor selection. To understand our unique methodology, please review our latest PIM Value Index.
Forward-looking organizations are deploying PIM processes and technologies to establish product information that is complete, relevant, dynamic and constantly available. They are using PIM systems to manage product relationships throughout the enterprise and improve business performance by automating cross-functional processes such as sourcing, new product introductions and electronic commerce. Using PIM technology, a company can put in place and then manage processes that make each line of business accountable for its product or item data and enforce common business practices and rules for conducting business and analyzing information. Conversely, we have found that other systems including ERP, PLM and e-commerce cannot support the full range of needs in PIM. Having a set of common definitions of product information across the organization promotes efficiency of business processes, which in turn can improve the customer experience.
Product information includes attributes and definitions specific to customers, suppliers and the enterprise. Like product-related master data management (MDM), PIM provides a way to automatically produce a complete, reliable view of all products without forcing every department and business unit to use the same application or format. For IT groups, it provides a way to ensure accuracy and consistency of data across the organization and to give all departments confidence in the reliability of the data they create, receive from and pass to other business units. But unlike product MDM, as I have written, product information management is about managing the “information supply chain,” which includes capture, assimilation, synchronization and publication. In capture and assimilation, PIM seeks to assemble complete, standardized product information from many sources (such as global data synchronization, manufacturers or content feeds). Through publication, PIM seeks to optimize information structures and content based on the downstream usage requirements of, for example, websites, catalog systems and e-commerce services.
Growing competition in online channels puts pressure on organizations to synchronize updates to product information across all channels and make it available directly for commerce and websites so that all sources agree and no information is released inadvertently (which, for example, might give competitors advance notice of product introductions, new pricing or other strategic changes). In addition, organizations that must track thousands or even millions of products or stock-keeping units (SKUs) need to reduce the burden of managing all this product information. Some are implementing new cloud-based interchanges; others are using industry standards like GDSN and GS1, and data transformation services to replace systems and routines based on older, more proprietary standards and manual code. Others are implementing MDM to improve integration of cross-functional and external information. In these ways, organizations can increase their flexibility to make changes as needed throughout the information supply chain.
To be able to provide consistent, accurate and actionable product information for consumers, customers and partners as well as throughout the supply chain, organizations must optimize the processes they use to develop and disseminate product information. Today’s businesses must manage a continually expanding variety of content and data as well as the expectations of audiences demanding comprehensive product information with a few clicks. Addressing these challenges requires unified processes and automated systems. However, our previous benchmark research on PIM found that many organizations are not up to these tasks. Fewer than one-fifth of them are innovative in their use of product information, while the large majority have plenty of room for improvement. Many organizations assign the core responsibility for PIM to the marketing function, which has its own set of challenges to deal with, as I have pointed out.
Managing product information can be difficult when industries, companies and even individuals within them use different names and attributes for the same things. Disparities often exist across departments with different orientations, including marketing, sales, commerce, the supply chain and finance. Additionally, organizations regularly add suppliers to their business networks and increase the number and variety of products they offer. Furthermore, many customers expect to be able to access product information on their mobile devices, and e-commerce introduces complexities in unifying information to invoke a purchase or recommendation. Also, product content now includes images and video linked to social ratings and comments. For all these reasons selling products and services, from business to business or to customers, requires a solid base of product information management, which I outlined in thoughts on supercharging sales and commerce.
These advances not only bring additional data into the organizations’ information systems, they often introduce new inconsistencies in how products and attributes are combined. Yet competitive pressures require that the information presented is not only up-to-date and accurate but engaging in its presentation. Organizations also need systems that enable operational processes to run uninterrupted and make timely data available for analysis and guidance in decision-making. PIM affects all lines of business and thus should be a shared responsibility across the front office and others responsible for the creation and maintenance of products and services. This means that PIM must interface to or support collaboration and workflow systems to ensure that the tasks and oversight engage all responsible individuals in the organization.
In light of these issues, it is not surprising that in our previous research the most important evaluation criterion for PIM software is adaptability, which almost half (49%) of organizations said is very important. Only one-fifth of organizations in that research said they are very satisfied with their current efforts in managing product information. To address these concerns, mature organizations embrace product processes that use PIM software to manage content and data about products, items or materials across the enterprise and for supplier networks and business-to-business (B2B) exchanges. PIM applications and tools are designed to produce and enable access to complete and reliable product records. If properly deployed, PIM systems can synchronize all the attributes and definitions used in the identification, description, marketing, sales, commerce and fulfillment of products across all channels that customers, suppliers, trading partners and employees use.
PIM can provide competitive business advantages by helping organizations address these information management issues:
- Inconsistent product definitions in product content and data, which many organizations find difficult to improve
- Limited feedback from customers on product information and its relevance to their purchase and use
- Insufficient control of the flow of product information due to use of multiple applications, file systems, spreadsheets and systems dedicated to only portions of the data
- Lack of integrated information to perform operational processes, execute workflows and provide automated data services
- Scattered information sources for analytics and business intelligence (BI) for financial and operational analysis, in which data is incomplete, inconsistent and out of date.
In our previous research little more than one-quarter (28 percent) of organizations reported that they manage PIM as part of master data management, an approach that can help improve the consistency and quality of an organization’s data. PIM and MDM projects typically include use of tools for data discovery, profiling and quality to deepen understanding of the data, including relationships and associations between data items. Most organizations have not integrated PIM into their overall business processes to optimize use of the information, but two in five or more of those that have implemented a dedicated approach to PIM reported gaining benefits such as eliminating errors and mistakes (47%), improving cross-sell and up-sell opportunities (44%) and improving the customer experience (41%).
Against this background, Ventana Research will undertake new benchmark research to determine awareness and adoption of a new generation of product information management software that enables business and customer-focused processes that meet today’s challenges. The new research will explore organizations’ experiences with deployment of PIM systems and issues they have faced in efforts to align business and IT resources and spending with organizational information management objectives. It will examine how many organizations are operating PIM in cloud computing environments or are considering it. The research also will examine the importance of presenting such digital assets effectively on mobile devices. Those efforts often require integration of supplier and customer information, increased use of online channels and synchronization of updates to product information that may be spread across global markets.
The new research will investigate the market performance and maturity of organizations’ implementations of PIM and their use of or intentions for new technologies in mobility, cloud computing, collaboration, big data and interaction across social media. Our previous research found analytics, big data and mobility to be the top three technology trends for PIM improvement, and we will determine if these remain the priorities. The new research will examine how and to what extent organizations have addressed the people, process, information and technology aspects of improving data quality, integration and consistency, enabling B2B and supplier integration through online channels and service orientation, providing a single view of products, materials and attributes for business intelligence and analytics, and establishing a central resource for better control and security of product information.
Please take the survey now and let us know what your organization needs from product information management. We look forward to sharing the results of this research on an issue of primary importance for all businesses.
CEO and Chief Research Officer
Filed under: Big Data, Business Analytics, Business Performance Management (BPM), Cloud Computing, Customer Performance Management (CPM), Financial Performance Management (FPM), Information Management (IM), Information Optimization, Operational Performance Management (OPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Uncategorized Tagged: PIM, Product Information Management, Sales, Marketing, Commerce
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