Knowledge System architecture

Can ERP replace a PIM System?

Why Do We Need PIM When We Already Have ERP Storing Our Product Data? This is a question often posed by entrepreneurs, especially those who have been using an ERP (Enterprise Resource Planning) system to manage their operations for years. Undoubtedly, ERP and PIM (Product Information Management) systems share certain functionalities that might seem similar. And indeed, ERP used to suffice—it was an integral part of business operations, meeting the evolving needs of companies as they grew. But does this mean PIM is unnecessary

While ERP focuses on transactional processes and operates on rapidly changing data in areas such as production, logistics, sales, or inventory management, the growing importance of product information management for modern businesses cannot be ignored. In the era of digitalization and omnichannel experiences, managing product data across various platforms has become indispensable. This is where PIM comes into play.

Do we really need to store everything we know about a product in ERP? This question arises when ERP systems struggle to meet the demands. ERP was not designed to manage product data—adapting it for this purpose involves costs, significant time investment, and technical limitations. Such a solution is not future-proof. While ERP and PIM systems might seem similar at first glance, they are unique and differ in many ways.

Comparison of both systems

Motivation and goals of implementation

The need for an ERP system arises when organizations spend too much time and resources on communication between business units, lose control over what is wrong or not functioning in their enterprise, lack access to key business indicators, rely too often on manual intervention, and invest too much time in managing their outdated applications, preventing them from leveraging modern technological advancements.

The need for a PIM system arises when businesses aim to improve data quality, omnichannel presence, time-to-market, efficiency, product experiences, and return on investment (ROI). A PIM system helps companies quickly bring products to global markets by providing superior enterprise-wide data management and driving them toward achieving high revenue growth.

Type of stored data

Data handled by the ERP system includes:

Complete information on product manufacturing
Details of product inventory
Details of product distribution
Comprehensive data on human resources within the organization
Business data of the entire enterprise - accounting, customer database, CRM, employees
Data related to business performance
Business Big Data

Data handled by the PIM system includes:

Identification - name, SKU, EAN
Logistics - weight, packaging dimensions, units
Technical product specifications
Digital product assets - images, videos, 3D files, PDFs
Product categorizations
Data standards - ETIM, eClass
Information about product variants
Related products such as accessories, components
SEO details and metadata related to product information
Customer reviews and product ratings
Transport details - shipping, warranty
Marketing and promotional aspects of products

Product data administration

Traditional ERP systems require significant effort when creating entries for new products. In the simplest cases, data import via Excel files is possible. Manual field updates in the ERP system to add new products are time-consuming and inefficient.

Bulk addition of new products is a daily task for a PIM system user. This is done via the user GUI, configurable CSV/XLS file imports, or periodic imports through APIs from external data sources.

ERP systems cannot update product data in bulk. Instead, it is usually necessary to manually change fields record by record, even if the same change is being applied across an entire product line.

PIM systems have built-in functionalities for performing bulk edits. This can resemble working with a data sheet (quasi-tables) or issuing a command to search and set a new value in bulk. Additionally, bulk changes are not limited to simple data types but also include changes in object references, images, and translations.

Distribution of product data outside the company

ERP systems do not have as extensive product data distribution capabilities as PIM systems, and communication is usually limited to internal applications and IT systems.

A PIM system, by definition, enables the distribution of product information across any possible channel. This allows companies to ensure seamless purchasing experiences at all customer touchpoints. Communication can include both internal IT systems and business partners.

Complexity and costs of implementation

ERP systems are significantly more complex than PIM platforms and offer a broader range of functionalities. They are expensive, and their configuration and mastery can take years. Customization is very costly.

PIM platforms are generally less expensive than ERP systems and thus quicker to configure. The cost of customization, especially for open-source solutions, is acceptable for most businesses.

In summary, by implementing a PIM system, you gain access to the following functionalities that an ERP system lacks or whose implementation would be very costly:

Object-oriented approach to data modeling, offering high flexibility in accurately reflecting the specifics of product descriptions.
Advanced management of technical attributes, which can number in the thousands, organized into groups to improve the readability of presented content.
Support for industrial data standards, such as ETIM and eCl@ss.
Management of digital assets, including graphic files, multimedia, 3D files, PDFs, metadata management, and file categorization.
Full multilingual support for data and interfaces, with integration capabilities for translation memory tools (e.g., XLIFF format).
Diverse mechanisms for validating the accuracy of entered data, including control reports and metrics for product data quality.
Product grouping and variant management, with value inheritance down the hierarchy, reducing the effort needed to maintain data accuracy and consistency.
Automation of repetitive tasks.

Architecture of PIM and ERP system integration

When deciding to add a PIM system to an enterprise’s technology stack, it is essential to consider the appropriate approach to product data. Since the PIM system intersects with the ERP system in many areas, finding a balanced approach is crucial for both daily operations and consumer communication. Regarding the critical process of creating the initial product record, two main approaches can be distinguished:

The ERP system plays the dominant role
The PIM system takes the leading role

Of course, in both cases, the term “dominant role” refers solely to the approach to product data, not the importance of the system within the entire enterprise.

Approach with the ERP as the dominant system

In this approach, the initial product record is created in the ERP system. The information is then shared with the PIM system, where it is further enriched and used for publication in omnichannel environments. This scenario is typically implemented by manufacturing-oriented companies.

Schemat podejścia, kiedy dominujący jest system ERP

Advantages

The architecture has clearly defined data flows from the ERP system to the PIM system. The entire product lifecycle is controlled by the ERP system. Typical ERP-related data, such as logistics, bill of materials (BOM), and trade data, is initiated and maintained in the ERP system. In the PIM system, all enriched data constitutes 100% additional information to the core data created in the ERP system.

Disadvantages

The ERP-dominant approach can introduce certain challenges. For example, when technical attributes are required in the ERP system, there is a risk that they may differ from the attributes presented in publication channels. To keep this data up-to-date, users must switch between the user interfaces of both systems. If PIM system data is needed for ERP processes, such as language-specific data for shipping notes, the ERP data model must be extended.

Approach where the PIM System plays the leading role

In this second approach, the initial product record is created in the PIM system. The information is transferred to the ERP system, after which the product identifier is returned to the PIM system. This approach is typical for onboarding products from multiple suppliers and is most commonly used by companies operating in a distribution model. It is also an ideal scenario for implementing a long-tail strategy (niche products, high margins).

Schemat podejścia, kiedy wiodący jest system PIM

Advantages

When suppliers are responsible for actively processing data, it reduces the costs of data maintenance processes. Without direct representation in the ERP system, it is possible to import large amounts of data from suppliers, further lowering ERP-related costs. Stage-based processing of data from multiple suppliers also becomes feasible, as does active category management based on an extended product database. Moreover, placing PIM at the forefront of the process enables access to an extended pool of products for custom purchasing purposes.

Disadvantages

Of course, there are also disadvantages to placing PIM as the leading system. First, data flow and processing become more complex. This means more complicated processes and interfaces to implement and manage (e.g., mapping imported attributes, unambiguous product identification, etc.). Second, users responsible for data maintenance often have to cover data authorization processes in different systems. This scenario also requires data transformation related to ERP. This can occur either by separating PIM data from ERP-related data before importing into PIM or by enhancing the PIM data model with the ERP product data model (e.g., logistical data, purchase prices). The product lifecycle is now divided between the responsibilities of PIM and ERP, leading to more complex data management (responsibility for the assortment is split between two systems).

Which scenario to choose?

Since there can be only one starting point for creating new product records, it will be necessary to choose one of the two options to serve as the architecture for PIM during the implementation of the PIM system. Partially helpful in making this decision is answering the following questions:

Is there already a central location where all new product records are created?
Is there a PLM (Product Lifecycle Management) process, and is it connected to the main ERP system?
Does the ERP system provide unique identifiers for all products that are used in other parts of the product data management process?

If the answer to all these questions is affirmative, the ERP-dominant approach will be the best solution. However, as with any situation, dependencies and company-specific requirements may make the other approach more suitable. Efforts should always be made to minimize changes to the current environment and business processes. After all, the last thing you want to do is introduce numerous changes to business processes to adapt to the new PIM system.

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