Unlock the Potential of PIM and MDM – Measure Their ROI Today!

Enterprises worldwide are adopting solutions like Product Information Management (PIM) and Master Data Management (MDM) to manage, consolidate, and distribute product and operational data accurately and effortlessly.

However, such solutions only get used by limited stakeholders, and store unimportant information.

PIM and MDM solutions deal with mission-critical data and involve considerable planning, customizing, integrating, and training efforts.

At the end of the day, efforts must pay off with significant ROIs. But the cost-to-benefit analysis for such solutions cannot be decoded with linear equations.

Businesses need to quantify the value of high-quality data, smooth data-driven processes and measure direct (and indirect) impacts in monetary terms.

Quantitative and Qualitative Measurement

To measure the ROI of a?PIM solution , businesses first need to understand its two sides, quantitative and qualitative.

The quantitative side?covers the rate of returns, productivity metrics, sales numbers, and conversion rates. On the other hand, the qualitative side includes customer experiences, data quality, data enrichment, and operational efficiency.

Whereas with an MDM solution, overall aspects such as time and cost in implementation and maintenance, automation capability of data management processes, the total cost of ownership (TCO), governance and change management, and hidden costs to shorten go-to-market time are included.

While there are no predefined formulae, businesses can gain considerable insight by taking calculated steps to compare the ‘before and after’ business stature against a PIM or MDM implementation. Here’s how:

Choose the Right Duration/Time-Period

PIM or MDM implementations do not mature overnight. Securing the right technology does not get the job done. The implementation process itself requires alignment across all internal stakeholders. Hence, the critical aspect of measuring the ROI would be to select the correct time frame.

Businesses must give a certain amount of time, such as one quarter, six months, or maybe a year, to choose a return horizon that allows full benefits of the PIM or MDM solution to percolate across all layers of the organization.

Moreover, an adequate number of sources and downstream customers need to be secured onto the PIM or?MDM system ?to fully realize its potential.

In the end, your use case, your target audience, your solution scale, your implementation strategy – all will decide the optimum time frame to reap benefits.

Calculate the Cost of Components?

While there are no defined, singular metrics for calculating the returns from PIM or MDM, one can closely estimate the gross profit by breaking down the cost components such as license cost, implementation and integration, training staff, partner expenses, and other resources.

Considering direct and indirect costs, potential delays, testing and re-iterations, and unprecedented risks can help set ideal expectations from PIM and MDM. This can also help carve an implementation schedule and focus the problem areas that they need to address. Questions like ‘What divisions, domains, locations, etc., will the solution affect?’ can further help prepare for inevitable challenges, such as competitors leveraging better and speedy data processes.

Set the Measurement Criteria

It is crucial to set the measurement criteria that help demonstrate the rapid, measurable success of the solution across the organization.

Once the timeframe and cost components are defined, a baseline needs to be created in order to measure the returns on the PIM or MDM investment.

Here, determinants such as improved data quality and accuracy, operational performance, user responses and actions, and impact on engagement rate, lead score, etc. can help businesses make quick decisions on whether their?PIM investment ?is helping to increase sales and profit margins or positively streamlining their product data management processes for cost-optimization.

Check Impact on Business Metrics

Formulating a business value model is necessary to foresee how PIM/MDM can help increase revenue, lower business costs or expenses, acquire new customers, increase market share, and/or optimize business processes. With a list of KPIs post in-depth business need analysis, determining sales and growth success and measuring cost-savings becomes much more manageable.

For example, many businesses understand they have product data quality issues that lead to missed sales opportunities, yet they do not always comprehend why or how it keeps happening. With well-planned KPIs in place, organizations can better evaluate how to lower the need for additional resources, reduce production time, and boost operational efficiency to save costs and improve sales growth.

Benchmark Your New Results

Comparing pre-and post-implementation results can help answer critical questions: Is the data quality optimized with the current implementation? Are there any structural weaknesses that need to be addressed or eliminated? What are the unmet needs?

By analyzing the results against the implementation steps, further requirements from the PIM or MDM solution can be documented to navigate the maturity model better and achieve the organization's defined goals. From solution capability, strategy, governance to change management and business process integration, benchmarking new results can help evaluate necessary revenue increase, cost reduction, and operational efficiency gains.??

With this, a significant tangible area of ROI for a PIM or MDM solution can expand sales and reach customers better. Be it product data enrichment or gaining a single data source for all information, businesses can seamlessly target customers with specific products, accommodate repeat business, and branch out to new distribution channels that automatically help set the path for value returns.??

Understanding the Nuances of ROI Mapping in PIM and MDM Systems

Unlike most IT initiatives, PIM and MDM solutions require a strong business focus, understanding, and enterprise-wide permeability to enhance product data quality and operational processes.

This is essential to derive business cases and apply them to determine the accurate returns from a successful PIM or MDM implementation.

Measuring the ROI of PIM and MDM helps identify the areas that will benefit from the solutions and provides a tight framework for prioritizing the project into solid phases and identifying areas of maximum returns.

However, given the scalable nature of both these solutions, the cost of PIM and MDM can be highly variable, making it crucial for businesses to conduct a timely assessment of setup costs, operational costs, and ongoing maintenance costs to measure ROI metrics better. Simply put, companies need to be fully aware of the direct and indirect costing factors of their PIM and MDM solutions.

To conclude, estimating the ROI on a PIM or MDM solution is not just about figures. The success of these initiatives indeed rests on the organization’s ability to set the scope for the PIM or MDM ambition through financial, strategic, process, and operational metrics.

Then, once the business knows what they’re aiming for, they can begin looking into the potential returns on each of their individual objectives.