PIM vs. ERP: What makes them different?
The never-ending race to outdo their overall productivity has compelled enterprises to raise the bar for inter-departmental collaboration, communication, and data exchange forever. Software systems such as Enterprise Resource Planning (ERP) and Product Information Management (PIM) continue to make organizations collect and distribute information about various activities, their status, while navigating data through different departments.
What You’ll Learn From This Insight:
Making an Informed Choice
However, many businesses find themselves confused about PIM’s and ERP’s purposes, benefits, and the extent to which they need one. Misjudging this criticality can put severe roadblocks to achieving high growth and productivity. Here we clarify the ambiguities that lead to miscalculations in choosing between PIM and ERP systems.
1) What Does PIM Mean Vs. What Does ERP Mean?
What does PIM Mean
PIM stands for a business practice that helps organizations manage their product-related information for the purpose of marketing and sales so that accurate, appropriate, consistent, and complete product information is consolidated, including (but not restricted to) product specifications, product lifecycle information, technical specifications, digital assets, rich media, product metadata, and information collected from every internal or external source or department related to the organization; this information is then disseminated to every customer touchpoint. PIM Platform facilitates businesses to get more and more consistent, compliant, efficient through a seamless flow of reliable product information right from manufacturing to supply-chain to market and finally into the customers’ hands.
What does ERP Mean
ERP is a software used by organizations to manage everyday business processes such as human resources, accounting, compliance, distribution, project management, supply chain operations, risk management, customer relationship management, etc. An ERP system uses a common set of data definitions that operate on a single database, functioning on an integrated software platform. Largely speaking, by tying together various business processes, an ERP system allows a seamless flow of data. It assembles transactional data from varied sources in an enterprise to offer the highest data integrity and a single source of truth, thereby eliminating data duplication. ERPs are widely deployed for handling various processes by organizations of any size or industry.
2) The Emergence of PIM Software vs. ERP Software?
PIM’s emergence can be dated to the 1990s when some companies began developing devoted systems to aid organizations to sell by creating print catalogs. Soon after, the internet took over retailing by storm. And the industry landscape was never the same. Online selling made printed catalogs look traditional and primitive, as buyers started to explore increasingly on the internet.
PIM gained further momentum from 2000 onwards when selling on the internet became ubiquitous; it became not just a necessity but an opportunity. Quickly, multi-channel selling appeared on the horizon, and PIM Software was considered among the best practices for retailers, manufacturers, wholesalers, and distributors. Dependence on PIM Platform has had such an effect that today, managing product information is unimaginable for businesses to compete in a multi-channel, omnichannel world.
The emergence of ERP systems can be traced back to the 1960s, where they were required to control and manage the inventory in the manufacturing industry. Shortly after, Material Requirements Planning (MRP) systems came into being, which were meant for production planning, scheduling, and inventory control. MRP was followed by Manufacturing Resource Planning or MRP-II, which included manufacturing processes such as master production schedule, item master data, bill of materials, inventory control, purchasing management, etc. And by 1990, these systems included other modules in its ambit, such as accounting, finance, and HR. That was when ERP systems came into being and started getting used. Around that time, Gartner coined the term ERP in 1990, setting the stage for ERP systems as we know them today.
3) Features of PIM Platform vs. ERP Platform
Chief features of PIM Platform are:
- Data Management: PIM Solution promises superior product information by consolidating data as a single source of truth to maintain high data quality, accuracy, consistency, and completeness. This reliable product information forms the basis of all enterprise commerce endeavors.
- Data Integration: In the case of PIM, too, integration between different product information sources remains critical. Whether the sources are internal (such as applications, systems, or hard drives) or external (such as suppliers, mobile apps, online storefronts), integration must stay intact.
- Customizability: A modern Product Information Management (PIM ) System makes sure it’s customizable according to your existing processes and can adapt to your future requirements, whether it’s to do with adjusting to your new catalogs or quickly expanding into a new market. The customization helps in import/export and management of data, as well as UI personalization.
- Automation: A PIM Platform offers organizations features designed to automate labor-intensive, repetitive tasks and streamline processes. It helps in carrying out bulk activities, track task completion ahead of publishing, and validates work. Automation helps your resources concentrate on their core activities and finding creative solutions.
Chief features of ERP Platform are:
- Cross-departmental Collaboration: ERP ensures that business units and processes throughout the organization are interconnected for smooth execution. For instance, when a new product is ordered, a credit check is auto-initiated, and a query is made for the product’s availability, followed by updating the distribution schedule. Lastly, after shipping, an invoice is sent.
- Real-time Readiness: Well-integrated departments facilitate real-time collaboration, saving time immensely in initiating customers’ orders. Once an order is placed, things move quickly within departments, for which real-time readiness is critical.
- Single Database: One single database ensures common data-definitions for the entire enterprise, where every department across the organization relies on it. However, certain ERP systems segregate the database to enhance their performance.
- Tracking and Visibility: ERP software provides enterprise-wide visibility. For example, in a supply-chain scenario, tracking products from the manufacturer to the retailer is made possible by ensuring a free flow of information between systems. ERP systems come with various tools to track diverse sets of data for keeping an eye on essential activities.
4) Benefits of PIM System vs. ERP System?
Chief benefits of PIM System are:
- Decreased Time-to-Market: By eliminating manual and repetitive tasks across the enterprise ecosystem, PIM helps get products to the market swiftly for immediate returns.
- Omnichannel Commerce: By distributing consistent product information on every possible channel, enterprises can ensure buying continuity on all customer touchpoints.
- Reduced Costs: Increased automation, bridging of silos, integration between systems lowers enterprise resource use, and carrying out complicated IT tasks tremendously cuts costs.
- Improved Conversion: Enhanced customer experience (CX), personalized selling, any time product availability encourages customer loyalty, often resulting in increased average order value and customer lifetime value.
- Reaching New Markets Faster: By making high-quality data available in multiple languages, PIM enables enterprises to quickly launch products across various geographical locations.
Chief benefits of ERP System are:
- Productivity Gains: When business processes are automated and streamlined, organizations can do much more with lesser resources.
- Faster Reporting: Speeding up financial, inventory, and business-related reporting helps organizations in quick resolutions and making performance improvements in real-time.
- Deeper Insights: Having complete visibility across the value chain helps businesses gather vital insights to find answers to mission-critical needs and prepare for the future.
- Decreased Risks: With synchronized operations, better control is established over various business departments to ensure higher compliance, smarter predictions, and the prevention of unforeseeable challenges.
- Simplified Functioning: With integrated ERP applications having a shared database, IT operations become highly simplified, making it smoother for key stakeholders across departments.
- Reduced Time and Cost: ERP-led automation helps enterprises save a great deal of time and cost by automating tasks, reduce the number of resources, increase consistency and accuracy to speed up time-to-market.
5) PIM and ERP: Main Differences
|PIM||PIM acts as a central hub for all product information obtained from various sources like CRMs, ERPs, WMS, Data suppliers, internal systems, and external agencies. Its job is to collect, consolidate ,enrich,disseminate data. It’s connected to various output channels (mobile apps, websites, native apps, marketplaces, smart devices, etc.).||PIM handles data like product specifications, technical specifications, product lifecycle information, product metadata information, digital assets (including images, videos, animation, etc.) collected from almost every possible internal or external source.||The scope comprises of centralizing and synchronizing product information to make it easy for departments like marketing & sales, suppliers, customer care, procurement, eCommerce managers, R&D, and finally, the CIOs, who forever look to improve efficiency and boost CX to grow overall revenue.||PIM’s need arises when enterprises want to improve: data quality, omnichannel presence, time-to-market, efficiency, product experiences, and ROI. PIM helps them by launching products across global markets quickly, offering better data governance at the enterprise-level, and steering them towards high revenue growth.|
|ERP||At the core of an ERP system is a shared database that supports and binds multiple functions so that workers of different business units can rely on the same data. This shared data is used across departments involved in HR, Bills of Materials, Purchase orders, Project Management, Invoicing, Stock Management, Quotes, Asset Management, Employee Training, etc., for their specific uses.||Information in ERP refers to a single, commonly defined schema (or data structure) stored in a common database, having a standard definition. The data could be about product manufacturing, inventory, warehouse and distribution network, human resources (employees and recruitment processes), company accounting, customer database and business performance analytics.||ERPs scope is much broader and extensive. It involves looking for organization-wide limitations to improve connectivity between departments, increase productivity, trim-down time, eliminate manual processes, keep an eye on operational effectiveness, carry out analysis and reporting, so enterprises can stay on an eternal journey of improvement.||Need for ERPs arise: when organizations end up taking too much time and resources to get business units to communicate with each other; when they’re losing sight of what’s wrong or not working for their enterprise; when they don’t have access to critical business metrics; when they depend on manual intervention overly; when they invest too much time in managing their legacy application that they miss out on modern technological developments.|
6) Can PIM and ERP Work in Collaboration?
Definitely! ERP and PIM systems can work in perfect harmony. ERP systems comprise numerous information points about multiple resources within an enterprise, such as logistics, products, customers, availability of stock, location of warehouses, and prices. They are built to track stocks of products, their movement within the organization until they are sold. An ERP has an altogether different way of seeing products, i.e., in a commoditized fashion, blandly viewing marketing and sales. However, marketing, on the other hand, looks continuously for vivid product descriptions and imagery to make products appealing.
It is this very gap that PIM fills. A PIM system takes in product information from an ERP system (and several other systems) and enriches it to fit marketing and sales. A PIM finds and includes the following information about products:
- Product descriptions
- Technical manuals
- Weight, color, and dimensions
- Instructional information/videos
- Product images and videos
- Version information
It connects this information to multiple output channels to spread consistent, accurate, and appealing versions of product information across channels. It also gives enterprises the ability to market products in numerous languages at several geographical locations at once.
In other words, unlike ERP, which sees data from a relational perspective, PIM looks at product information from a marketing lens so that descriptive, rich product information is presented to the customer in engaging marketing campaigns and communications. That’s the reason ERPs and PIMs complement each other flawlessly.
For example, a shoe manufacturer produces various hues and styles of shoes by procuring parts from many suppliers. Now, an ERP is a great choice to supply clean, uniform data about them to every department from procurement to stocks, payment, and warehousing. It helps in creating effective enterprise workflows, business processes and supports reporting and analysis. Let’s say a shoelace is consistently recognized by its size, part name, material, serial number, lot number, supplier part number, cost, etc. That is to say, that the information is enough to identify it in the company ecosystem uniquely. However, when it comes to selling every pair of shoes, the marketers would need to create narratives and copies around product colors, variations, and designs. PIM Platform provides better flexibility to bring such product relationships to life. It can automatically organize multiple products and categories and play around with engaging product descriptions, images, videos, and products.
7) ERP Tasks that PIM eases for you
- Introducing a new product line: Data of a new product line is usually imported into the ERP system. However, there are times when the new product may have a ‘new’ product marker, a type of information that’s previously not been relevant for the existing ERP system but which can be a great selling point. However, creating a new input field is impossible without the ERP consultant’s intervention, which can cause significant delays.
In contrast, a Product Information Management System is not restricted by any pre-defined input fields, which means the control rest in the hand of the product managers and marketers. Therefore, introducing a new product and entering its unique specifications is never a challenge; saving time and effort tremendously.
- Modifying/updating product information: Taking forward the above example, there may be times when product information needs to be updated or modified, for instance, on account of new legal compliance, certification, or government regulation. With an ERP system updating, every product in an entire product line can be time-consuming, resource-intensive, and even error-prone. In case the organization has a PIM, it would merely be about updating the information in the product field once, and that information would cascade to all subsequent levels and sublevels automatically. That way, the organization becomes compliant in no time, information is automatically updated, and the scope of error is eliminated.
- Prepping newly acquired products for Sales: Your newly acquired products need to be readied for the market, even though their sales potential is not fully known. Now, carving out space in the existing ERP by pushing aside your core, well-selling products may not be the right thing to do. However, if the organization has a PIM Solution, the new products can be entered immediately. The products can bypass the ERP (without disturbing its data) and reach the marketers who can test the waters by using the product data engagingly to sell.
- When rich product data is needed for marketing: Since the data kept in an ERP system is transactional, it can be pushed to output channels such as websites, mobile apps, etc. But, marketing efforts often require rich media content about the products, including images, videos, animations, and other multimedia files to make the product look as useful or attractive as possible. Since ERPs are not built to carry such information, it is sourced from every system or hard drive manually. If a PIM Platform is used instead, every piece of information about the products is already consolidated inside it. Therefore, marketers can straightaway ‘publish’ this information on multiple channels and various languages to realize their goals.
- Finding product information in ERP: There may be a small component, an accessory (let’s say of a particular color and dimension) used in a product that may not be receiving positive feedback. Looking for such a component may be extremely difficult within an ERP system, as it may not exist in it as a feature. That’s because it may have been sourced from an excel file from one of the hard drives. In that case, scouring for such a component can be a nightmare. If there’s a PIM system in its place, searching into the consolidated repository of product data will surface that component immediately. After that, it can be sent back to the supplier for replacement or repairs. Finally, the information can be relayed on all output channels swiftly.
8) Advantages of PIM and ERP integration?
Since both PIM and ERP have their unique potential, each of their presence only strengthens the other. A PIM-ERP integration takes care of both the major back-end critical functions and the selling related to the front-end eCommerce. Some of the obvious benefits of the integration are:
- Superior inventory management
ERPs gives organizations a top view of all the inventory; they’re all about managing products by stock levels and orders. On the contrary, PIM puts together product taxonomies, categorizes them by attributes, and creates relationships between them for optimum marketing and content dissemination. Broadly speaking, while ERP updates inventory information, PIM Platform ensures enriched, accurate product information is displayed on multiple channels.
- Quickly sending data to partners
Partners such as distributors or retailers don’t just need lucidly spelled out critical data about products, but also marketing data as they equally partake in the process of selling products. As a norm, all partners require organizations to fill item set-up sheets for them. Since an item set-up sheet is a channel-wise specification sheet for product data, it requires data from both ERP and PIM like GTINs (global trade item number), UPC (Universal Product Code), specifications, attributes, and other product content needed by partners for successful selling.
- Effective marketing/pricing precision
ERP manages product prices of all kinds including, wholesale price, minimum advertised price (MAP), role-based price, and category-wise price. Selling on different channels may need different pricing labeles on products for various recipients. Moreover, it can change from day-to-day (depending on offers, promotions, and schemes). ERPs can efficiently offer critical pricing details to every department, but they may not give special attention to marketing/sales. But, when product information is fed from an ERP to PIM, a sale-specific database is created.
- Faster variant set-up and enrichment
Since every variant has a unique SKU, the ERPs must have them as separate entities. However, an ERP does not enrich and categorize variants from a selling or customer experience perspective. But, when the set-up happens in an ERP, and additional attributes such as images, animations, marketing content are added through a PIM Software from a variant-specific angle and then entered into digital catalogs and pages, it offers customers a gratifying experience. Therefore, PIM-ERP integration paves the way for commerce success.
- Enhanced overall merchandizing
As ERPs supervise all the sales, accounting, and order information, it’s got a bird’s eye of the data. It can analyze products, predict sales, recognize which product needs to be liquidated, and alter selling strategies as PIM does not receive any insights (once products are sold) regarding the sales numbers. However, ERPs can forecast sales based on reliable intelligence and metrics, hand it over to the marketing, who can then formulate a marketing strategy. Therefore, together, ERP and PIM System combination can be leveraged to devise a solid, informed merchandising plan.
9) Two Use Cases Where Pimcore PIM Successfully Integrated with ERP Systems
Leading designer, manufacturer, and marketer of automotive accessories in North America
The organization was facing enormous challenges in managing their product information as it was spread across multiple ERP systems and disparate data sources. A considerable degree of manual effort was going into product creation, enrichment, and publishing to various output channels. The existing system also wasn’t meeting the ACES/PIES norms (that are needed to regulate information for proper fitment and product selection). To fix these challenges, Pimcore implemented a PIM solution by building a single platform for managing all product data and assets. The new system automatically received organized/unorganized product data from various sources and generated data for output channels and suppliers in ACES/PIES standards. Pimcore’s solution published product data/assets to front-end websites and offered them the scalability they lacked.
Over 100-year-old renowned Consumer Packaged Goods leader in North America
The brand’s objective was to streamline their internal operations and coordination among various teams by controlling content consumption in a consolidated platform and manage their 30 websites and product data. There was a dire need to integrate with their Oracle ERP (to procure basic product data) and support integration with all 21 external systems. Pimcore implemented a multi-site CMS and PIM system to manage all their website content and product information in a single platform by centralizing CMS, PIM, and DAM for 30 websites. It enabled more than 21 external integrations (including with Oracle ERP) through robust RESTful API integration with external ERPs. The new solution ensured faster time-to-market, reduced total cost of ownership, greater flexibility to internal teams, enhanced approval workflow for content publishing, and centralized content management.