Blog » How ERP and PIM Systems Work Together
Businesses turn to technology, leveraging ERP and PIM systems in pursuit of staying competitive and efficient in today’s fast-paced business landscape. While each system serves a distinct purpose, their synergy is often overlooked. In the following editorial, we will delve into the ERP and PIM systems definitions, explore the advantages of their integration, discuss the possibilities they unlock, and provide insights on maximizing this collaboration.
ERP Definition
Enterprise Resource Planning (ERP) is a comprehensive software solution designed to streamline business operations by integrating various functions like finance, human resources, manufacturing, and supply chain management. It acts as a central repository for essential data and facilitates decision-making by providing real-time insights into an organization’s processes.
Businesses implement an ERP software system to enhance operational efficiency and decision-making processes. One of the primary reasons is the access to real-time information, which aids in making well-informed decisions rather than relying on best guesses. ERP systems introduce best practices from various industries, promoting better efficiency across the organization. They also improve visibility, allowing businesses to track orders instantly and streamline month-end closings by automating transaction processing. Furthermore, ERP systems enhance client satisfaction by offering better inventory and shop floor visibility, control costs by providing an accurate picture of product costs and margins, and ensure better operational efficiency by planning production more effectively. They also maintain accurate records, balance supply versus demand, and reduce lead times by focusing on priorities. An ERP system centralizes and integrates business processes, leading to increased accuracy, efficiency, and profitability.
According to Sage Software Solutions: in the manufacturing industry, ERP systems are used to manage 43% of the data, yet only Eleven percent of companies are using ERP to manage their e-commerce activities. In light of the percentage disparity it would appear that ERP systems may have a GAP in their ability to effectively manage data related to eCommerce activities . Most ERP systems do not have the ability to define and track an unlimited number of product attributes or large number of varying product data points. Nor were they designed with a fast data serving API to seamlessly feed product data across multiple channels. This is where PIM systems compliment an ERP, by filling in the functionality GAP.
Definition of PIM
Product Information Management (PIM) is a system focusing on managing product data, ensuring accuracy, consistency, and completeness. PIM systems are crucial for businesses dealing with a vast array of products, as they help maintain and distribute product information across multiple channels, such as e-commerce platforms, catalogs, and marketing materials. Generally, according to the Fortune Business Insights forecast, the global PIM market is expected to grow from $3.01 bn in 2022 to $12.91 bn in 2029, with an average annual growth rate of 23.1%.
Speaking of trends of 2023, it’s worth noting the increasing integration of Augmented Reality (AR) technology. The use of PIM in conjunction with AR helps visualize products and understand their dimensions and potential applications. This, in turn, boosts buyer confidence in making the right choices. Implementing AR can significantly increase conversion rates, boost order volumes, and reduce return percentages.
According to Threekit, 83% of buyers consider product imagery as a crucial factor that directly influences their purchase decisions. Incorporating 3D images and augmented reality on a website can increase conversion rates by 40%.
Synergy between ERP and PIM
In some cases, extracting content from the ERP system to an online store without PIM can be straightforward, but at times, it may prove challenging. As the product catalog becomes more complex, PIM significantly saves time. A centralized database, in particular, helps:
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coordinate product files,
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update compliance information,
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maintain product relevance by seasons.
While having both ERP and PIM is not mandatory, retailers and manufacturers who opt for both can provide detailed and accurate product information to their customers more quickly and consistently. This is especially relevant when the catalog includes a substantial number of items that require regular changes and updates. Despite some functional overlap, ERP and PIM serve different critical business objectives. These two systems complement each other, ensuring consistency and transparency in all product-related communication with consumers. Thus, when integrated correctly, PIM and ERP systems simplify, automate, and optimize business processes. The integration of ERP and PIM systems creates a harmonious relationship that offers numerous advantages:
Fast data transfer. ERP systems are adept at handling transactional data, while PIM systems excel at managing product information. When integrated, they ensure seamless data flow between product-related data and other business operations. This enables faster decision-making and reduces data entry errors.
Efficient inventory management. Combining ERP and PIM allows for real-time visibility into inventory levels, demand forecasts, and product availability. This leads to more efficient inventory management, reducing the risk of overstocking or stockouts, ultimately saving costs and improving customer satisfaction.
Marketing and pricing accuracy. By integrating product data from PIM and ERP, marketing teams can access accurate and up-to-date information for creating marketing campaigns. Pricing information is also synchronized, ensuring consistency across all sales channels and reducing pricing errors.
Increasing ERP and PIM integration
Once have been establishing a connection between your ERP and PIM systems, the following opportunities to increase revenue are opening:
Bring products to market faster. The integrated systems enable quicker product launches by centralizing product data and automating processes. This expedites the time-to-market, allowing businesses to respond swiftly to market demands and trends.
Reduce the percentage of product returns. Improved data accuracy leads to better product descriptions and specifications, reducing customer dissatisfaction and returns. Customers are more likely to make informed decisions, resulting in fewer product return issues.
To fully unveil the potential of ERP and PIM integration, consider the following steps:
Hourly, daily, or nightly synchronization. Set up regular data synchronization between ERP and PIM systems to ensure that information remains up to date. The frequency can be adjusted based on your business needs.
Enable the PIM workflow feature. Leverage the workflow capabilities of your PIM system to streamline the process of creating and updating product data. This ensures data consistency and quality.
Connect via API with high-speed limits. Utilize Application Programming Interfaces (APIs) with high-speed limits to establish a robust connection between the two systems.
Conclusion
In today's data-driven business environment, the synergy between ERP and PIM systems is an invaluable asset. It offers advantages such as fast data transfer, efficient inventory management, and marketing and pricing accuracy. Moreover, it opens up possibilities to bring products to market faster and reduce the percentage of product returns.
By maximizing integration through regular synchronization, workflow utilization, and high-speed API connections, organizations can unlock the full potential of ERP and PIM collaboration. This partnership not only enhances operational efficiency but also contributes to revenue growth and improved customer satisfaction, making it a strategic imperative for modern businesses.
Modified on: 10/11/2023