PIM vs. MDM – Do you know the difference? And why it is important to you?

November 8, 2019

Many companies’ sales and marketing strategies have changed dramatically over a number of years and are now moving with lightning speed towards the fast, digital world. In a study of expected turnover, eMarketer has estimated that e-commerce worldwide will have risen to USD 4.058 trillion by 2020.

Once, product information management PIM systems were considered a luxury reserved for Fortune 500 companies. Today, owners and managers of small companies are well aware of PIM systems as well. When it comes down to it, a spreadsheet is not always the most reliable or productive place to process and maintain the ever-growing amount of product information.

If you have been looking at PIM possibilities, you have most likely come across the acronym MDM (Master Data Management). What is the difference between the two terms, and which system is right for you?

PIM vs. MDM – Here are the differences

A PIM system manages product information. An MDM system manages all of the company’s data. A PIM system is a marketing tool that makes it easy for you to prepare and maintain product information for publication via many different channels. An MDM system handles both product information and other types of information, e.g., data on customers, employees, etc.

Before we delve more deeply into whether you need the one system or the other, it is important to clarify what each of them can do. In order to do that, we have to go back to the late 1990s, when the internet was really starting to take hold.

Companies with a lot of products and product data found it difficult to present their products online. At the same time, it was a challenge for them to publish product information effectively across other, very diverse channels, as is necessary to ensure consistent yet tailored communication overall.

That is where PIM systems entered the picture. With this powerful marketing tool, it was possible to create and maintain product information and to share it across different platforms, including print and online media.

However, as with everything new, there were also disadvantages that have since been remedied. Initially, one of the biggest problems was the risk that employees in various departments of the company would come to produce overlapping information, thus causing confusion.

For example, the company’s customers could see one set of information about a product, while the finance department saw another. It is easy to imagine that it was rather frustrating for both customers and businesses. Upon further analysis, it became clear that the weak link was integration of stand-alone applications.

PIM systems with MDM functionality

As a result, MDM systems were created and offered a new approach. The MDM system references a single data source, regardless of who gets access to the information. However, MDM systems differ in not just processing product information, but rather information from all areas of the business, including data on employees, customers, suppliers, etc.

Today, PIM and MDM system functionality can overlap. In some cases, companies may have a PIM goal to begin with, but end up adopting an MDM strategy. That being said, over the past decade PIM systems have become far more efficient; many actually have MDM functionality to some extent. Today, PIM systems also take a company’s internal circumstances into account, so that only one version of a set of product data exists, and overlapping data is avoided.

Which system is right for your business?

In today’s business world, you have to juggle numerous sales and marketing channels, advertising platforms, social media – the list is endless. Ultimately, a PIM or MDM system can support you in your work and enable you to achieve your goals.

When deciding on choosing a PIM or MDM system, there are a number of things to consider, and as mentioned, it is not always an either/or question. First and foremost, you need to be aware of what you want to achieve, so to be completely clear about what your specific goals are.

Is your goal to promote your products and to publish all kinds of relevant product information (text, files, images, video, audio) in such diverse channels as product datasheets, price lists, newsletters, InDesign catalogs, in your webshop or on other e-trading platforms such as Amazon? In that case, a PIM system is likely to be the best starting point, as PIM systems are specifically designed to handle product information and thus ensure the optimal user experience across the board.

You can also use the PIM system to optimize product data in smartphone apps, POS material, customer and supplier portals, etc. When you implement a modern PIM system, you can improve efficiency and internal collaboration, e.g., between Product Development and Marketing and between Marketing and Sales.

Shut down those decentralized data silos

From an IT perspective, a PIM solution will also enable shutting down many of the decentralized systems – data silos – that are widely used.  Depending on the goals, PIM systems are often the ideal solution for small and medium-sized businesses. Today they are playing a significant role in streamlining entire businesses.

By comparison, MDM systems are a good solution for companies that want to organize all kinds of data, including those not associated with products. MDM solutions improve data management and make it easy to build up new concepts and even new businesses based on operational expertise. MDM strategies are especially beneficial to companies in terms of problem solving. You can do a lot with an MDM system, but it also costs a lot more.

Thus, before investing in a complete MDM solution, a recommended first step would be to find out whether the MDM functionality built into some PIM systems (including Perfion’s) is adequate to cover your needs.

Check whether a PIM system can meet your needs

Download our guide:

‘5 Crucial Questions You Need to Answer Before Choosing a PIM System’

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