PIM vs ERP
How can a PIM solution work alongside your ERP?
In the current retail and distribution landscape, there are more and more companies fighting fiercely for a share of an increasingly competitive eCommerce market. They will probably be employing an Enterprise resource planning (ERP) suite to manage the complexities of their operations. But are they using a PIM tool to maximise the effectiveness of their product offerings? What’s the difference between a PIM tool and an ERP system, and how do they work together? Below, we answer these questions and illustrate how a PIM system works alongside an ERP to ensure your product information is fit for the fight.
PIM and ERP in the business ecosystem
Both PIM and ERP are part of the same business network and they certainly share some common data. But their functions are significantly different. An ERP system organises a full range of business processes and, in one form or another, is a common part of any business’s technology stack. Typically, an ERP system uses a common set of processes and data models to cover, in breadth and depth, operational end-to-end processes. These can include all areas of business activity; finance, HR, distribution, service manufacturing, and supply chain, to name a few.
ERPs also automate and underpin a range of operational activities across various industries and sectors, including line of business, customer-facing tasks, administration and enterprise asset management.
When it comes to a PIM system, consider the following. We now live in a fully digitalised era where consumers access product information using different touch points and sources. Never before has product information had such a pivotal role to play in powering brands to influence these consumers. Product information is proliferating across multiple sales channels and we all access smartphones, tablets, point-of-sale, stores, and printed catalogues with baseline expectations of a seamless, consistent and high-value product experience. It’s all in the name. Product Information Management is a set of applications whose attributes offer;
Can ERP handle complex product data?
Because of its design, it can’t. Originally, the aim of an ERP was simply to order new products for the company. It got stock into a business and moved stock out to a retailer or vendor. In essence, it was designed to be a transaction-based tool.
ERPs still feature a relational database model, which has a predefined method of checking and managing product data. Conversely, a PIM is modelled on a non-relational database model and thus offers a much more fluid and intuitive method of accessing (re-)organising and enriching product data. Another purpose is marketing that data through multiple sales channels to reach the end consumer.
ERP and PIM process overview
How does PIM make sure ERP is fit for product data purposes?
The organisational activity of a distributor or retailer is geared towards managing complex product data. Processes and workflows like onboarding unstructured product data from various sources, managing multiple SKUs and distributing to a wide range of channels do not fall within the natural scope of an ERP’s capabilities. Therefore, if you use your ERP for these purposes, there’s a risk of forcing it into performing operations which it wasn’t designed to handle – the potential pitfalls are obvious when it comes to missing information, inconsistent or multiple copies of data sets and the consequent degradation of that product information which reaches the customer.
This is where a PIM proves its worth. While the ERP focuses on its operational strengths, the PIM is responsible for preparing all rich (and enriched) product data, such as:
- Detailed product descriptions
- Technical specifications
- Interactive manuals
This benefits businesses in terms of time, operational efficiency and sales potential. Businesses no longer need to spend time fruitlessly tracking sufficiently extensive product information in the ERP. That information is now within a platform that’s specifically geared towards managing it.
As a PIM centralises all disparate product data into a single location and is the ‘single source of truth for that data, it can effectively ‘sit’ on top of an ERP and channel all product-related information into a single source of truth.
Additionally, bear in mind that you may be dealing with product bundles or composites, relationships among different products and an enormous number of product attributes.
How does PIM complement an existing ERP?
Expansion into new channels
PIM platforms can connect to different ecommerce systems, retailers and resellers. This seamless integration is key for driving sales initiatives and scaling operations to expanding markets. For example, if a tech retailer decides to open a channel to Amazon, their ERP system alone will lack the functionalities to do this. However, by integrating an ERP system with a PIM, the retailer can now connect to that channel with the tools to distribute their products rapidly and generate a greater volume of online conversions.
Digital asset management
As consumer expectations and technological capabilities rise, the management of rich media for product information is becoming a key differentiator in how product information reaches the consumer. PIM platforms usually feature a content delivery network (CDN) which offers cloud media storage, access to relevant media at any time and in real time.
PIM can also link with digital asset management (DAM) tools to store and enrich all assets. For example, a clothing retailer can use a DAM tool to incorporate video into a given product page. Locating that digital asset within the PIM is fast and easy and creates an enhanced, interactive shopping experiences for consumers.
Product relationship management marks another significant distinction between PIM and ERP systems. ERPs generally sort products into how they’re bought or reported, using a single product hierarchy. If you’re selling product SKUs with several variants, the ERP will have difficulties recognising the relationships between the variant and the base product. Without a PIM, staff would need to spend a lot of time manually updating copy for each variant.
PIM, on the other hand, provides much greater flexibility when managing product relationships. Users can organise multiple product lines and categories rapidly and efficiently. In many cases, automated tools facilitate the editing of multiple attributes and can enrich that data instantly.
So, although a PIM system is not a replacement for an ERP, it is an essential extension for providing a higher volume of qualitative information about products. A PIM also creates more space and enables you to plan more efficiently and perform product launches faster. While an ERP system performs a competent range of tasks for managing the business processes supporting products, it simply doesn’t have the targeted functionalities required to create compelling product experiences. It is the technology driving a PIM solution which offers that breadth and depth. It takes you a long way toward ensuring you satisfy or exceed the seamless omnichannel demands of the modern consumer.