Interview I asked Adastra MDM/PIM consultant Daniel Fisla to elaborate on 10 topics about PIM based on his experience as a consultant in the industry. Mr. Fisla provides a valuable perspective coming from many years of interaction with companies and implementation of enterprise solutions including PIM. Definition of Product Information Management (PIM) Product information management or PIM refers to processes and technologies focused on centrally managing product information, with a focus on the data required to market and sell the products. PIM provides the combination of processes and technology to manage product data in one central hub and then synchronize it across the organization and supply chain. The goal of PIM is to streamline the data acquisition process from supplier and internal organizations, centrally manage and enrich that data, and then communicate consistent, accurate and up-to-date information to all required distribution channels such as web sites, print catalogues, ERP systems, and electronic data feeds to trading partners in order to generate sales and market products.

1. When did PIM technology start booming and where is it going over the next 5 years?
Every manufacturer and distributor already has some form of PIM in place; however, many businesses struggle to evolve beyond the initial steps. For these organizations, more advanced information management best practices for product information are already available, and have the potential to provide significant results. As far as the next 5 years are concerned, I believe there’s work to be done with respect to PIM tool usability, better enterprise integration, business process modeling, and modular architectures. The vendors to watch are the market visionaries: the smaller players who are closer to their customers, who pay attention to usability and deployment challenges, and who are flexible enough to adapt their products to customer needs.

2. Which group(s) within a company should be driving the adoption of this technology? 
Given the enterprise approach behind Master Data Management (MDM), it is important that MDM initiatives be driven by both business and internal IT teams. Meeting the needs of these different groups requires a clear and direct approach to MDM/PIM. Solutions must satisfy the broad enterprise requirements and, at the same time, deliver obvious benefits for both business and IT tiers. In this sense, MDM/PIM initiatives are no different from other strategic initiatives; their success depends on the overall organization structure and culture, and how well these are aligned to overall business goals.

3. What areas and topics does PIM support within an enterprise?
The role of PIM is twofold: it allows organizations to deal with the rising volume and complexity of product information related to day-to-day operations, and supports or supplements services for their ERP systems. Additional issues that must be addressed are: data quality, data integration, integration with BI, and corporate data governance.

4. What bad habits (or dated best practices) have you found to still be in place in organizations you have worked with?
Most common is a lack of detailed and up-to-date documentation with respect to business processes, expert knowledge sealed off in silos, and subject matter experts relying on a rigid process and organization structures that make it difficult to adjust to both internal and external changes.  Organizations need to invest in more flexible data management platforms that are designed with change in mind so that less time is spent on constant re-engineering. This is especially true for PIM and integration with ERP systems.

5. Have you experienced resistance/hesitation to PIM solutions? If so, what?
I think the biggest challenge is both in connecting the dots and in painting customers a clear picture of how PIM solutions will solve their challenges.  Most companies have built internal solutions on their own with varying degrees of success.  In almost all cases, most custom-built solutions lack the challenging aspects of PIM such as business process definition and modeling, business performance management, process automation, data quality and validation, parametric search, and other functionality necessary to elevate PIM to the top tier of an organization.

6. Everyone talks about ROI. What can companies expect to see over time?
ROI is very important part of PIM project justification; however, exact calculation of ROI is challenging: if it’s easy to calculate, then you are probably doing something wrong. Often, the biggest gains are in the most challenging parts of the return on investment calculations. Benefits such as improved worker productivity and data quality metrics are usually easier to determine; benefits from better enterprise integration and governance processes are lot harder to quantify.

7. What are the main ingredients of a good PIM provider?
A good PIM provider organization must have broad experience across different segments of the PIM market. Since out-of-the box solutions are not available, a good PIM provider is expected to leverage experience from similar projects across PIM industries. Even the best practice approaches and architecture models need to be customized on deployment. A good provider has the ability to execute and will provide the client with a number of options and will educate the client about potential benefits and/or trade-offs.

8. The economy is a touchy subject today. What advice do you have for companies with regards to considering a PIM solution in these times? The economic climate we are faced with puts additional market pressures on organizations and will likely have a long-term impact on the industry as a whole. Nevertheless, every crisis produces multiple opportunities to innovate and push the envelope both with respect to technology and business. In particular, this is the time to invest in PIM solutions so that organizations are better prepared to grow their business in the long run and through the next economic boom cycle.  It is a common misconception that MDM/PIM projects have to originate as large and expensive endeavours. With proper scoping, and an iterative approach methodology, we often help our clients to get started right away and deliver actual benefits at each iteration of the overall MDM/PIM initiative. With respect to MDM/PIM tools and architectures, a wide range of solutions exist for both medium and large enterprises. As consultants, we often conduct real-life POCs and make recommendations in order to help clients pick the right tool/platform for the right job.

9. Many companies are content with their ERP system in handling product information. How does ERP and PIM fit? Is PIM a luxury, or a necessity today with ERP systems
Historically speaking, as ERP systems have grown both in functionality and complexity, the master data management specialization evolved out of the gaps in managing product information within the ERP systems. ERP systems are designed to facilitate large volumes of business transactions such as general ledger, accounts payable, accounts receivable, and order fulfilment transactions, with a focus on narrow data and process definition. Inversely, PIM systems are designed to handle a large number of data types, product definitions, taxonomies, and business work flows, with a focus on flexibility and configurable approach to product and process definition. As a result, PIM systems complement ERP systems and even ERP vendors are beginning to offer PIM solutions as external components of existing ERP solutions.

10. Is PIM a revenue generator or a cost/time saver or both?
PIM definitely saves both cost and time. Obviously, replacing legacy systems eliminates much of the re-work required due to poor data quality and management of product information. At the same time, when looking at organizations that implement good data governance, data quality, and implement efficient business process, there is a positive correlation been the sales personnel, the revenues, and an efficient implementation of PIM as a whole.

Conclusion

Although the concept of PIM is not new, the increasing focus around product data is driving this technology to surface and grow rapidly.  Providers are increasing R&D budgets to meet the growing demand and complexities of companies that are ultimately trying to satisfy the demand from customers for high quality, accurate, and up-to-date information.  PIM saves both cost and time and in turn provides additional revenue generating opportunities through marketing and sales channels. For this sake, this project must be fronted by both the business teams and the IT team. Best practices around PIM are showing companies today how to leverage their data as a corporate asset. Are you working for your data or is your data working for you?

Interesting studies done by the Aberdeen Group.

New Age Multi-Channel Retailing: Prospects for Digital Retail Revolution and Avenues for Better Integration .

- Best-in-Class companies 2.5x as likely as Laggards to have the ability to execute a unified marketing plan for all channels of operations.

- Best-in-Class companies are 28% more likely than their peers to possess the capability to track cross-channel performance analytics.

- Best-in-Class companies are 72% more likely than their peers to be using online user analysis for driving store and overall multi-channel performance.

Aberdeen surveyed over 120 retail enterprises between December 2008 and January 2009 to determine the current state of multi-channel retailing, and the future implementation of the digital and mobile channels. Aberdeen data reveals that 58% of retailers surveyed have had a multi-channel initiative in place for at least one year. Best-in-Class companies are 1.5-times as likely as Industry Average and Laggard companies to have implemented these initiatives in that time.

Optimizing Sales Performance Management through Data Integration and Analytics. 

- Seventy-one percent (71%) of Best-in-Class companies experience year-over-year improvement in sales productivity, compared to 12% of Laggards.

- Best-in-Class companies are 2.8 times less likely to experience yearly sales force turnover compared to Laggards.

- Best-in-Class companies are 2.4 times more likely than Laggards to improve annual revenue.

*More information on these studies can be found at www.aberdeen.com.
 

Online shoppers want high-quality product images, detailed information and useful extra features

Online shoppers attach great importance to product presentation and accurate product information when browsing for both technical and consumer products. While one or more product images are enough to make or break the sale of fashion items, additional detailed information is essential when it comes to domestic appliances. This was the conclusion reached by a representative online study conducted by dmc digital media center, partner of Heiler Software. The "In Focus" series of surveys by dmc seeks to analyze the needs of online retailers and to let online sellers know exactly what their customers want when using their websites. In January 2009, dmc conducted a survey to uncover which product information and supplementary details are considered relevant by online shoppers and which features of an online shop are likely to encourage them to make a purchase. Two product groups were selected, namely fashion items and domestic appliances.

Effective product images are essential to quality in e-commerce
First impressions are vital. Effective product images are therefore essential to the success of an online shop. In the fashion arena, approximately two-thirds of customers said that product images and adequate product descriptions were the most important factors influencing the decision to buy. One in three shoppers said they would like to see more product images or specific information about the quality of fashion items. For one in two, an option to zoom in on a product image is a key factor, as is a specific delivery date. In addition, many expressed a desire to be able to view an item of clothing in a range of colors. Surprisingly, however, barely three percent of those surveyed said they would like the option of viewing a video presentation, while only eight percent rated clear brand distinction as an important factor. Also remarkable is the fact that, when it comes to the purchase of domestic appliances, shoppers attached importance not only to product presentation but also to the availability of substantial technical details (70 percent) and warranty information. In addition, delivery time is the crucial factor for almost 65 percent of potential buyers.

Extra information equals extra spending
While online fashion shoppers want to be made aware of special offers on similar items (70 percent), the range of services provided by the retailer was assigned top priority by those interested in purchasing technical products online. When buying fashion online, consumers are also interested in knowing how much they can potentially save. Payment in installments, 24-hour service, express deliveries, interest-free credit options and many other services were considered essential by two-thirds of interviewees. When buying washing machines and similar items, independent test reports or reviews by other buyers are considered key criteria by almost 70 percent of shoppers. In contrast to fashion shoppers, 14 percent of those interested in these items also expressed a desire to be able to exchange information in the context of a discussion forum.

Wish lists, "compare" options and size advice get the thumbs up
The study also reveals that extra features of online shops make them more attractive and interesting to shoppers and therefore play an important role in winning and holding onto customers. This is why many shops currently offer a wish list feature. This allows online shoppers to store a list of their favorite items. If one of these is currently sold out, they will be notified by e-mail as soon as it is back in stock. Small wonder, then, that this feature was the most important factor for many of those interviewed. However, size advice is also considered extremely useful by over 50 percent of shoppers, with one in three expressing an interest in a personalized fashion advice feature. Two-thirds of participants also said they would appreciate the option of comparing similar items to guide them in their decision. When buying expensive electrical appliances in particular, customers are price-aware and are keen to avail of special offers – 70 percent of those interviewed in the study wanted the option of comparing various offers. Half of all interviewees were of the opinion that an option to print and download product information is essential when shopping for domestic appliances.

To allow shoppers to compare items online, all relevant features need to be maintained centrally. Retailers can exploit up-selling and cross-selling opportunities to a greater degree by providing links to product groups, replacement parts and accessories. Information such as "Customers who bought this product also bought..." helps to optimize e-business and to up sales figures. Says Frank Schmidt, Director at Heiler Software: "Successful up- or cross-selling of accessories or alternative products is dependent on flawless product data".


Background information
The "In Focus" ad-hoc study presents the results of an online survey conducted by eResult, which was commissioned by dmc digital media center. Between January19, 2009 and January 21, 2009, a randomly selected group of members of the "Bonopolis.de" online access panel took part in the survey (1,170 interviewees in total). Participants were asked four questions in total. "In Focus" studies appear several times a year, homing in on current topics, trends and opinions relating to e-commerce and e-business.

This is a new service offered by Heiler Software that I think it is really cool!  Heiler will assess and provide a report to see how you measure up. These are the lines from the website;

Are you working for your data or is your data working for you? Heiler Software, top ten leader in Master Data Management and product communication offers the Product Data Benchmark Tour 2009. Join now and get a 1 day free assessment of where you are compared to your industry peers in terms of your data management maturity.

If you woud like more information on this, you can click the 'Join now' link or contact me directly.

 

Modern Product Information Management used to sell high-margin niche products

The economic crisis has placed significant downward pressure on both sales and margins of the wholesale and mail order business. In parallel, customers are expecting their suppliers to provide an increasingly large and broad cross section or assortment of items in their online business.  These realities has generated significant investment in the "Long Tail" theory, which promises higher sales and margins from the sale of niche products with low volumes.  Although maintaining this kind of assortment initially appears complex and costly, it opens up high profit margins. Many companies are already achieving two thirds of their profit in Long Tail. Product Information Management (PIM) solutions provide an ideal solution.

Management of large data volumes is becoming increasingly crucial in wholesale and mail order – particularly in relation to developments in e-commerce. What are the key challenges? Selling through multiple channels is gaining in importance – for companies specializing in both B2C and B2B. Targeted selling through different channels, such as online stores, print catalogs and point of sale, opens up new sales target groups and increases brand awareness in the market. In future, the majority of international companies will be investing in multi-channel sales. 

Assortment policy as a success factor

Alongside these marketing-based issues, the actual products offered for sale represent a key focus for suppliers' positioning. Item assortment policies in distribution is undergoing major changes.

In the past, category management meant always having limited space in the warehouse. Only a certain number of pages were available in printed catalogs. There were also restrictions in logistics – warehousing in particular restricted opportunities so much that most dealers attempted to find the ideal catalog assortment with the largest possible number of top sellers.

As a technical wholesaler, Fastenal supplies more than 100,000 customers worldwide with an assortment of 600,000 industrial components. They include Fasteners, Tools and various Maintenance Repaid and Operations (MRO) parts. "We deal in MRO, but our customers primarily expect detailed product descriptions and technical details", explains Bruce Loken, Product Data Management Director at Fastenal. "As a result, we are increasingly developing into an information broker. This means that we deal in product information", says Mr. Loken. The Fatenal Group is meeting this challenge with a Product Information Management (PIM) system from Heiler Software. The company, based in Detroit and Stuttgart (Germany), has been involved in product data management for a decade.

"In the past, many companies had to severely restrict their item assortments", explains Greg Wong, CEO of Heiler Software. For example, most only dealt with certain brands, or carried out segmentation of product groups and target groups. In a printed catalog, there are few alternatives, but online stores do not have this limitation. DGI Supply, the tool wholesaler in the DoAll Group, is also looking to make use of this advantage. "We maintain an item assortment of more than 100,000 items. However, our e-business customers expect tools to be available in several million versions", says Chief Operating Officer Bill Henricks.

Long Tail – Profit from numerous niche products 

In a stationary distribution business, the range has to be closely linked to demand due to the limited sales area available. Therefore, the main focus is on mass market demand, while everything that is not profitable enough is excluded. This means that a relatively large number of products are not sold – this is what is meant by the "Long Tail". The diagram based on the work of Chris Anderson shows a long demand curve tailing off towards the X-axis.

On the left are the fast moving items, which have frequent demand – the curve is high and narrow. On the right, the long, increasingly thin "Long Tail" covers the many items with less frequent demand. If we look at the margins, this distribution has an interesting significance. Niche products often achieve considerably higher margins than top sellers. Therefore, this means that dealers have to neglect the many high-margin products due solely to limited storage space, limited numbers of pages in printed catalogs or limited IT systems.

The Internet provides significant cost advantages. A digital department store is made up of servers that can easily be expanded at any time. Adding a new product involves little more than a few additional entries in a database. And where necessary, some space in an efficiently operated logistics warehouse. But in the case of purely digital products, there are no physical rstrictions.

Optional Sales

(The American academic Erik Brynjolfsson researched the Long Tail phenomenon using the example of the book market. A typical bookshop constantly stocks between 50,000 and around 100,000 titles, for which there is an appropriate demand in the marketplace. However, these books are also available from Amazon, but their range includes a further 2.9 million titles. Brynjolfsson and his team analyzed sales and came to the conclusion that Amazon achieves up to 40 percent of its revenue from those books that cannot normally be found in a traditional bookshop.)

PIM as a basis for large assortments in e-commerce

The question now is why online store operators have not been greatly expanding their item assortments for years. Why do we find that typical B2C mail order companies have 300,000 items and not 3 million?
Unfortunately, it is often a problem of IT infrastructure. Servers, online store systems and search catalogs cannot deal with the management of mass data and millions of item links.  Before products can be presented in the online store, the supplier must obtain and prepare the relevant data.

"Item assortments are often restricted by the fact that the product data cannot be efficiently maintained. A Product Information Management (PIM) system enables organizations to set up and manage extremely large item assortments, without rising costs for expanding their assortment", says Greg Wong.
"The right e-commerce strategy can reach new customer groups and bring significantly higher margins", explains Mr. Wong. The Long Tail theory has become a reality. Mr. Wong  is sure that suppliers with the largest assortments will come to dominate the markets.

For the first time, PIM gives dealers an integrated process. Suppliers provide their item assortments electronically, and this data is then checked and stored centrally. It is then structured and prepared for presentation in online business. Wholesalers and mail order companies can arrive at the largest perfect assortments by involving their customers in the process.

Dealers are often unaware of the niche items that are in demand. They are sometimes obtained and delivered when requested by a customer but rarely become part of the base item assortment. Reviews, evaluations and inquiries from customers can contribute to an optimum expansion of item assortments. The PIM then allows new items to be immediately added to the online shop. Links to product groups, spare parts and accessories enable dealers to make better use of up-selling and cross-selling potential. Information such as "Customers who bought this product also bought..." help to optimize e-business in niche products and multiply the sales figures.

Customers can get everything they need from their supplier and thus become regular customers. They feel that the service and support they receive are tailored exactly to their needs and preferences. When they log in or enter particular search terms, every customer is provided with product recommendations tailored to their taste or requirements. In a dmc survey in September 2008, 44.8 percent of respondents stated that they view the quality of the product data as a motivating factor for success of an online shop. "Good e-commerce needs good product data - this simple formula sums up the critical success factor in e-commerce. Users expect their preferred online shop to provide high quality and extensive product data", concludes Mr. Wong.



Requirements and advantages for Long Tail sales success with Product Information Management:

Requirements:
    -Perfect product data management
    -Self service features for customers
    -Data maintenance optimized based on customer requirements 
    -Ratings, reviews and shopping cart links (Customers who bought this product also bought...
Advantages for dealers:
    -Regular customers can be offered a far greater item assortment
    -Customer retention is hugely strengthened
    -Optimum use of cross-selling and up-selling 
    -Higher sales and significantly higher margins in e-business

*The Long Tail concept
The Long Tail is a theory developed by Chris Anderson. In 2004, the American journalist and Editor in Chief of Wired Magazine presented the concept of how a supplier on the Internet can increase profits by offering a large number of niche products. The name comes from the demand graph's similarity to a long tail.

I just realized there is no entry here for my Retail contacts. In fact, my longest client here in Canada is a large retailer!  So here are a couple points for why retailers use PIM:

- Retailers need to get their products to customers faster today then ever. With constant product introductions, price changes, product changes and more, it's even more critical today that that information is constantly up-to-date and accurate.  Imagine that you can introduce a product to the market with a click of a button rather then waiting days or weeks for example.

- Speaking of doing things with a click of a button, exercising all levels of your marketing channels by easily publishing up-to-date, accurate, and consistent information is necessary to keeping retailers competitive today. From print catalogs to weekly/monthly flyers, website store front, e-catalogs, nationwide stores, inside sales/CSRs, etc. Also product communication in different languages (French and English), region specific, store specific, etc.

- Synchronizing data with national and international data networks and standards or directly with the multitude of manufacturers is growing in importance as companies are always looking for faster, easier, and cheaper ways to communicate information through the supply chain. 

This is an excerpt from a newsletter kickoff that a client produced to introduce their brand new PIM purchase to the rest of the company.  It's always fun when clients get excited about PIM like a new favourite toy! And so I must share...

(Their definitaion of PIM)
PIM stands for Product Information Management and comprises all elements required to manage and maximise the use of accurate and structured product data.  When  managed properly in a central repository, product data can than be efficiently used within the group for many different purposes like webshop publication (for example Tradcom), catalogue printing, flyers, datasheets, price lists, quotations and many other e-commerce solutions .

Why PIM? (Product Information Management)
“Yes”, I can hear you saying, “but why do we need such a sophisticated system for that while we have already our ERP systems”? Basically due to 2 main reasons: first of all to be able to meet our customer requirements of quickly supplying them with high quality product specifications (and images) in any format, printed or electronically. This information is not always available in the required formats in the ERP systems. Secondly, the PIM solution will help us to improve our internal efficiency, both in terms of maintenance, search as well as publication.

At this moment, product data is gathered separately in all clusters, mainly by the Master Data Management Departments, supported by the product managers and marketing departments. With more than 3 million items already being used in the 4 major clusters, it is a huge task to make sure all required information is up to date and completed with drawings, datasheets and images. By using a product information system, this can be organized far more efficient, therewith avoiding double work and increasing availability of information to our sales staff and marketing departments.

On the other hand, our customers are more and more demanding and expect from us that we do not only advise and supply them with products, but even support them in becoming more cost effective by providing them with high quality product information in different formats.
In order to be able to publish and sell our products via the internet, central product data and images of high quality is a prerequisite and business card for our company.

When being able to meet these requirements by using a PIM system, we will be both quicker and more efficient than our competition, being able to take market share even when the economy is slowing down.

______

I couldn't have put it any better!

One of my hobbies growing up, which turned into a fun little business through school, was working as a graphic artist. I worked on everything from print to web to corporate identity. The most tedious projects I worked on were print catalogs and flyers. Page after page of copying text and dropping images. They were boring but I was sure able to rack up the billable hours!  I never planned on being a graphic artist as a career, so I pursued other things. Years later, I’m sitting in listening to a demo given by my boss on a product information management solution for a client. He said;

"And with this, we were able to generate their 2000 page catalog in just 3 months on the first try down from 9 months. And we expect that to go down even more..."

Wait! How are they doing it if it’s not automated? To my surprise, this billion dollar company had graphic artists and project managers doing exactly what I used to do. And even more shocking, this isn’t uncommon. Does this look familiar?



                                                    And this is the new way:


Some benefits of being able to create a catalog at the push of a button from a centralized database:

Investment security due to utilization of standard software
No procurement of additional external systems, instead a useful extension of the existing options.

Improved time-to-market
Quick and cost-saving catalog creation and updating due to comprehensive automation options.

Serve new markets perfectly
The system supports in particular the preparation of international and target group-specific publications. As a result you increase your output without additional costs.

Time saving and cost saving due to error-free publications
Due to PDF previews for each sub-section of the print publication, everyone involved can make a visual correction at any time.

Increased efficiency for all publishing processes
Integrated process co-ordination between product data manager, graphic design, DTP processing and the prepress phase due to clear allocation and monitoring options for all work steps.

Now imagine the possibilites with the saved money and time and the ability to create catalogs at the click of a button.

To greater success!...

Canadian Bearings ( CB ), a leading bearing and power transmission distribution company has selected the Heiler Product Manager solution suite to manage its product information. CB is a top 50 industrial distributors in North America with sales of 160 million Dollars.

The existing internal applications at CB currently access and maintain product information from various vendors through data acquisition and data quality processes that have been developed in-house. Now Heiler Product Information Management (PIM) suite improve upon existing processes and ensure the company’s ability to meet future product information demands.

“To the degree that we have expanded our product range, we need a technology to allow us to accommodate this expansion as well as our need for richer and more accurate product information. We believe that Heiler Software will also help to improve our efficiency as we streamline current processes with Heiler’s Workflow System”, says Mike Logan, Application Systems Services Manager at Canadian Bearings.

Heiler Product Manager offers vendor tracking, classification and hierarchies, part numbering, image, and catalogue profile definition. “The PIM solution will cover the publishing of the master catalogue as a part of the data release process for other in-house enterprise systems such as e-commerce”, says Greg Wong, CEO at Heiler Software Corporation.

The implementation of the Heiler Product Manager will support the definition and administration of a master product catalogue, synchronization with existing internal and external applications, and workflows supporting existing business processes.