PIM vs MDM: what’s the difference?

PIM vs MDM is a frequent dilemma for data officers in terms of their respective uses and applications for organisations. Let’s look at their features and differences between the two to help you make a more informed choice. 

PIM (Product Information Management) is an area of activity covering the entirety of processes, governance & solutions to manage product data across its lifespan. A PIM platform is a technology-enabled solution to the challenge of ensuring that all product data entering, moving through and leaving the business do so to the highest possible standards of quality, consistency and reliability.

Master Data Management (MDM) is the business area which focuses largely on internal company data. It covers multiple domains such as data on suppliers, customers, products and location. MDM generally takes the form of a central data storage hub serving as a ‘controller’, to ensure a single, consistent version of every single piece of data within the company.

Product Information Management (PIM) focuses on data in the product domain. Its primary purpose is externally oriented: making sure that product information is communicated to the customer consistently across all channels. Like MDM, it consists of an information hub which ingests and onboards product data from various sources, principally manufacturers, suppliers and vendors. A PIM solution standardises, verifies and enriches product data before exporting it in a form which is compatible and compliant with multiple channels, the ultimate aim being to provide extensive and attractive product data to target customers. 

On the face of it, PIM vs MDM indicates two distinct solutions to data management. A PIM system can be regarded as a subset of an MDM system, but recent trends indicate that the expanding functionalities of the platforms mean it may be unnecessary to use both of them. In the following sections, we’ll take a closer look at the two tools and give you some pointers about what factors to bear in mind when choosing one or the other (or both) for your business. 

 

The role of a MDM solution

A Master Data Management system (MDM solution) operates from a central storage point and provides enterprises with a single, authoritative view of all the information it possesses. This ‘master’ takes various forms, including (but not only) the following types of data; product, customer, supplier, location, asset, logistics, inventory and employee.

By leveraging the power and capabilities of this data hub, a company can seamlessly integrate information from various applications and systems . Both PIM and MDM require a governance framework to implement procedures and standards to ensure that every single piece of data is accounted for and correct. Data from multiple domains are the ‘property’ of individuals within the organisation who are responsible for accuracy, uniqueness and overall quality. Thus, the multidomain dimension of an MDM solution uses its attributes to enhance data accuracy and consistency and allows for complete cross-domain visibility. Whoever is using a data set for whatever purpose can be certain that it is up-to-date, reliable, trustworthy and accurate and that there is no other version of that data on the system. 

The role of a PIM solution

As mentioned above, a product Information management system frequently functions as a subset of a master data management system. It acts as a hub for all product information and has four principal functions; 

  1. It ingests product data from business partners, such as suppliers, data pools and other databases. 
  2. It gathers this product information and standardises, organises, enriches and processes it to leave it ready for use across an ever-expanding variety of sales channels. 
  3. It exports that product data to the various sales channels and catalogs for use by customers in their purchasing decisions.
  4. It guarantees a consistent product experience for the consumer, regardless of what channels they use to access their product information. 


As such, a PIM system is the key to producing trusted and relevant product content for unified commerce, micro-segments and product insights to drive customer loyalty. For the many organisations moving towards digital transformation, a PIM solution ensures full alignment for operational excellence, business intelligence and engaging effectively with customers throughout the purchase lifecycle. Additionally, it enhances both the upstream and downstream sides of business partnerships for retailers and distributors. 

Forrester Analyst Michele Goetz (1) refers to PIM as “MDM on Business Terms”, in that its primary function is customer-focused. Of course, the attributes of a PIM solution enhance productivity and efficiency of but ultimately, the test of its usefulness lies in the conversion rate determined by the quality and consistency of the product information reaching the customer during their decision-making process.

For larger organisations, product information management often forms one part of an MDM strategy. When it comes to choosing your PIM vs MDM team, many smaller and specialised retailers and distributors choose to deploy a standalone PIM platform simply because it is a faster and generally simpler option for pushing out product descriptions and other information across multiple channel types. 

If your organisation is large, and uses large amounts of data across various business areas, an MDM solution also enables you to create a single, centralised version of the truth for your product information and associated content. An MDM platform allows you to use and optimise content throughout the value chain and provide the necessary data transparency and governance to maintain integrity, drive operational efficiency, and create a data-driven competitive advantage.

In summary, the main difference between an MDM solution and a PIM solution is that the MDM solution gives structure to your digital strategy, while a PIM solution focuses on funnelling that information which leads directly to consumer markets (B2B, C2C and B2C). If you are a distributor or retailer, a PIM solution integrates perfectly with an existing MDM data architecture. But if we compare PIM vs MDM, a PIM solution is basically one part of MDM and if your company is as yet, small to medium, a standalone PIM solution alone could well suffice for your needs when considering costs and implementation. If you are a larger organisation and you do not yet have a Master Data Management system, planning and implementing a strategy must become a matter for urgent attention in this business environment.

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(1) https://blogs.forrester.com/michele_goetz/14-06-06-pim_mdm_on_business_terms