PIM or ERP: Which Do I Need for Master Data?

PIM or ERP: Which Do I Need for Master Data?

For many sales companies, ERP is an important part of the IT ecosystem, providing data to crucial business systems, such as CRM or OMS. According to Statista, in Norway alone, the ERP market is expected to amount to approximately 212.2 million U.S. Dollars by 2021. The extent to which ERP is used as a source system for product masterdata varies greatly, though.

What platform does your company use for masterdata?
What platform does your company use for masterdata?
Source: Ventana Research

What is Enterprise Resource Planning

Let’s begin with a definition. What does ERP do and what do companies use such a platform for? Have a look at this summary from Shopify:

An ERP system can take orders from customers, manage financial records, update inventory after each sale, and anticipate labor needs based on the level of orders received. In addition to managing processes, ERP systems also gather, store, and analyze data from internal functions, such as marketing, manufacturing, accounting, facilities, and research and development.

Overview of ERP platforms

The most popular ERP systems include SAP, Infor M3, Visma, Dynamics NAV, MS Dynamics AX, Jeeves, IBX, Driw, and IFS. There are also numerous smaller ERP vendors.

Ironically, the common denominator for all these systems is – they don’t have much in common. That is why a general plugin directly connecting to any ERP system cannot be created. All ERPs are unique in the way how data is imported and exported from ERP to PIM, even per customer. That said, integration types usually involve:

  • API
  • Files by FTP
  • Webservice (request or response)
  • SOAP
  • SAP RFC (remote function call)

PIM or ERP for masterdata?

ERPs gather raw data from multiple sources like suppliers, or third-party data sources. Such tools tend to have low efficiency and reliability in enriching products for digital commerce. They don’t allow introducing certain quality requirements forced on suppliers’ data, which results in a lot of ‘dirty’ data placed in ERPs. An ERP platform, which is often the basis for information fed to an online store, from the marketing perspective produces low-quality product content, for example in product names. The consequence of it is that product enrichment teams need to spend substantial amount of time cleaning up the data, for example adjusting to naming conventions, or fixing text cases instead of focus on more strategic part of eCommerce. Abbreviations and attributes as part of product names, and inconsistent text cases, such as capital letters, also make it harder to understand what product we are dealing with. This can really undermine the customer experience. Let ERP be ERP, but pay attention when creating meaningful product titles in PIM, and use these in customer-facing channels.

Let ERP be ERP, but pay attention when creating meaningful product titles in PIM, and use these in customer-facing channels. Click To Tweet

Leaving such imperfections can cause bad product experience, but also harm both your SEO and conversion rates on a product page. Implementing a PIM solution, therefore, will ensure consistent and high-quality product data in all the channels.

Much information can be re-used from the ERP system but information often has to be reviewed and adapted for commercial use.

Jorij Abraham
ERP vs CMS vs Commerce

ERP systems do not support functionalities that enable efficient work with product information, such as collaborative product enrichment. Nor are they able to facilitate external product data syndication. PIM platforms, on the other hand, help businesses drive online sales with the help of centralized and organized product information. When deciding whether to use ERP or PIM for master data, consider the pros and cons of each with regards to:

  • Control of data
  • Possibility for editing data
  • Adding new products
  • Importing data from suppliers
  • Ease of integrations

Are you interested in implementing product information management, but not sure how to integrate it within your existing IT architecture? Contact us to plan your PIM implementation so you can improve product data quality.