PIM vs. ERP.
Which system for which purpose?

Definition of PIM system (Product Information Management)

A PIM system is a central platform for managing marketing-relevant product information, such as product descriptions, technical specifications, and digital assets. As a single source of truth, it integrates product data from various sources at a central location and thus enables extremely efficient and resource-saving data management.

The main functions include the consolidation, administration and maintenance of product data as well as its targeted distribution to various output channels.

We have already discussed the advantages of a PIM system extensively in this article:
PIM benefits at a glance.

Here is an overview of the most important benefits:

• Company-wide access to current and complete product data
• Reduced risk of errors and inconsistencies
• Efficient workflows for data maintenance and enrichment
• Shorter time to market
• Consistent product experiences across all channels

Definition of ERP system (Enterprise Resource Planning)

An ERP system is a business software solution that bundles, automates and controls all core processes of a company in a central system. These include finance, human resources, manufacturing, logistics, services and procurement.

ERP is often equated with a central nervous system, as it combines all processes and data that are necessary for daily business operations.

Almost 81 % of large companies (> 250 employees) in Germany used an ERP in 2021 and benefited from the following advantages, among others:

• Continuous overview of entire business processes
• Up-to-date and consistent data across the organization
• Saving time and money through automated processes
• Communicate and collaborate more efficiently
• Easier decision making with real time information

Comparison: PIM vs. ERP

At first glance, PIM and ERP systems seem to overlap in many functional areas and the associated benefits.

For example:

• Centralized information management
• Company-wide access to up to date data
• Automated processes
• Lower risk of errors
• Efficient cross-departmental collaboration

However, a closer look reveals significant differences in the focal areas and functionalities of both systems, which depend largely on which aspects of corporate management are in focus — be it the management of product information in a marketing context or the comprehensive management of operational processes.

The comparison shows that the decision does not amount to an “either/or”, as the strategic priorities of the two solutions differ significantly. Although product data is also collected and processed in the ERP system, the scope of this data is significantly smaller than in a PIM system. For example, ERP is not designed to link attributes, digital assets, or product variants. PIM, in turn, is unable to represent the complexity of the holistic ERP approach.

As different as ERP and PIM are, companies can benefit greatly from the integration of both systems.

What can the integration of ERP and PIM look like? - An example

A bicycle manufacturer uses an ERP system to map the entire life cycle of its bikes — from the procurement of individual parts to production to storage and sale. In the ERP system, every bike can be identified based on unique criteria such as the item number or name.

This information is sufficient for internal purposes but offers only limited added value to the consumer. Whether on the website, in the web shop or in the printed catalog — the customer needs detailed descriptions and images to get a comprehensive overview of the product range. This is where the PIM system comes into action.

The PIM system as a perfect addition to ERP:

• Basic master data, such as the name and article number, can be seamlessly transferred from the ERP to the PIM. There, the data is enriched with customer-relevant attributes such as technical specifications, color variants and images and automatically distributed to various channels.
• The PIM system functions as a collaborative tool that allows different departments to access product data at the same time. Various preparation processes can run in parallel, which significantly shortens the time to market for new products. Even if not all data is yet available, sales, for example, can use some of the information to announce the new product to customers at an early stage.
• Data synchronization between ERP and PIM can generally take place in both directions. This also makes it possible to initially create new products in PIM and only transfer them to the ERP when the data is complete and the product is ready for sale. In this way, no unnecessary resources are tied up in the ERP until sales start and all departments can efficiently participate in the market launch right from the start.

Conclusion

There are various options for designing the interaction between ERP and PIM. It is essential to determine which system is considered the leader and therefore has data sovereignty. This decision must be made individually depending on the use case. In principle, companies that integrate ERP and PIM are ideally equipped to more than meet both internal and external requirements for current product information.

Do you have any questions about integrating PIM and ERP in your company? Then contact us! Our VeloPIM team is happy to help.