Whitepaper PIM Business Case

build your PiM business Case 5 Things to Consider

Build your pim Business case | White paper

heiler – turning data into Busness | Build your pim Business case | White paper | page 2

content.

authors:

michael Fieg

michael Weiss

Benjamin rund

introduction 3

understand the Big picture 4

think strategically, but act operationally 5

Build the Business case 7

Focus on an implementation style and methodology for pim 9

measure performance and results of pim 11


introduction.

according to the pim roi study conducted in 2011, 60% of companies

who have not yet adopted pim miss the positive business case or cannot

identify it. 40% of companies surveyed admit that they have no prior

knowledge nor have they had the opportunity to identify these benefits.

this white paper will address these challenges specifically. We will provide

tips that companies can use to define their own individual business cases

using pim, as well as develop measurable success.

Define the business case with PIM and make success measurable.


understand the Big picture.

the internationally renowned “futurist” gerd loenhard states: “data is

the new black gold.” What does he mean by that? in his opinion, col-

lecting data, putting that data into context, and enriching the data so it

becomes usable information represents a company’s greatest asset. data

thus usurps oil’s number one spot in the raw material line-up. today, data

is the fuel that will make businesses run tomorrow.

What kind of data is he talking about? Which kind of data is the most

important? according to analysts, master data is the data that businesses

need to be most concerned with, which consists of: product data, cus-

tomer data, personnel data, organizational data, financial data, supplier

data, and geographical data.

leading analysts specify “multi-domain master data management” as

one of the most important trends today. But just what is a multi-domain

mdm?

in the magic Quadrant report of mdm for product data solutions 2011,

gartner writes: “ … multi-domain mdm technology is a purpose-built

solution targeted at addressing the multi-domain technology require-

ments of an mdm program. it includes the following characteristics:

> it can be implemented in a single instance as an easy way to man-age relationships between data sets.

> the data model is uniform or is interoperable and able to manage cross-domain intersections.

> the workflow and user interface elements are uniform or interoper-able.

> it supports at least one use case, implementation style, or organiza-tion/governance model, for specific industry scenarios...”

product data sell

location data

product data Buy

party data (customer)

media assets

hr data

supplier data

Financial data

MDM & PIM:The role of product data in context with master data.


data has a strategic value. connecting and networking all of your data

provides improved analyses and faster processes. recent corporate prac-

tice has proven one thing: this is the right goal to strive for and is worth

the effort. however, if a project scope is too broad it can result in various

master data being held in different systems. the consolidation of this

data often takes a great deal of time and expense. chapter 2 recom-

mends a practical approach.

mdm projects are usually carried out by an interdisciplinary team con-

sisting of members from different departments in a company. of course,

there is a project manager who has management’s support. the project

group is responsible for determining some advantages for the team,

which translates into benefits for the entire company. this means that

the appropriate business case has to be defined for mdm projects. this

serves two purposes: First, doing this helps to define clear business ben-

efits within the current year. secondly, this helps to refine, define, and

develop the overall goal of the stages that will follow.

therefore, experienced mdm consultants and analysts recommend start-

ing with mdm domains that allow for rapid growth. Which kind of data

is crucial to corporate success? offering the right product to the right

customer at the right time is the key to success.

think strategically, but act operationally.

Conclusion:Data has a strategic value. Connecting and network-ing all of your data pro-vides improved analyses and faster processes.


many pim projects are directly connected to ecommerce projects or even

to multichannel business models. the benefits of using high quality prod-

uct data can be measured immediately: increased sales and lower return

rates. this is what the pim roi study demonstrates, among other things.

gartner mdm analyst andrew White confirms the significance of prod-

uct and customer data in this context. the demand for multi-domain

projects has increased from 3% to 7%, but this still is not a huge jump.

“product data is slightly ahead of customer data as the two single largest

(polarized) domains.”

(Source: Gartner “MDM” Tagged Inquiries: By Data Domain, Individually tagged Any Core Topic, with “MDM” in Impact field, Alex Drobik, Feb 14 2012, Gartner Research Inc.)

Conclusion: the main goal is to have all data in the company synchro-

nized and networked – but the real influencing factor that provides

rapid success in the context of master data management is product data.

ultimately you will have to decide the domains for your business case

that you feel will help you achieve the greatest success. the following

chapter will show how to quantify the benefits in eight steps, indepen-

dent of the data domains.

80% of customers using PIM report that the qual-ity of their product data has had a positive impact on their profit margins.(Source: www.pim-roi.com Study 2011)


how do i formulate my business case in the context of my mdm proj-

ect? the following example is entirely independent whether product,

customer, or supplier data is the primary focus. this illustration and

definition of the eight steps is a summary based on gartner research.

Build the Business case.

Identifying and meeting with the stakeholders

Discuss the targeted improvements

Selecting the relevant brands

Describing implementation usage

Selecting the relevant brands

Transferring the inten-ded improvements into

fi nancial events

Calculating the complete costs

Capturing and evaluating current

performance

Head of New Media, IT and fi nancial responsible

Sales Close Index, New Customer Index, Wallet Share Index,New Products Index

Comparison, costs / benefi ts

Webshop analysis, sales data, etc.

PIM license, performance, company and infrastructure, maintenance, data management, indirect training, failures, rent, risk protection...

Data quality, range of products, custo-mer contact, long tail, cross-selling

Visitors*, cart*, sales close index improvement

10% data completeness = 1% sales close index

1

5

28

46

37

Source: Illustration of Heiler Software based on Gartner Research

step 1 Identify the business strategy and the stakeholders. these stakeholders typically include the business process owners from the specialist department as well as it and finance executives.

step 2 Select the proper business metrics. these metrics will be used to support the strategy you are going to be tracking. it should be noted that there are no overlaps or gaps in the ranges that are being considered.


step 3 Determine your performance. do this by using your predeter-mined metrics and also compare against industry benchmarks.

step 4 Select a solution. the potential applications and their implica-tions must be described from the perspective of the business process, as measured by the chosen metrics.

step 5 Negotiate the targeted improvements. these improvements are to be measured by the chosen performance metrics. in this case, the reasons for any improvement must be shown in detail and the confirmation of the management should be sought.

step 6 convert these improvements into financial targets.

step 7 Calculate the entire cost of the investment that will be incurred throughout the entire life cycle. gartner developed the total cost of ownership methodology in 1987. the main idea is that not only the direct costs of an investment need to be considered, but also additional indirect costs such as training, failures, rent, and risk protection.

step 8 Calculate the ROI. there are various applicable methods.

Conclusion: this is all very general. But how can these tips be put into

concrete business practices? Who will help along the way? heiler soft-

ware has collaborated with international consultants and pim experts

to create a conceptual design as part of the global roi study. these last

couple of chapters are devoted to giving you very specific methods and

metrics for a successful pim project. a reputable consultant can provide

more than just general guidelines; he can provide concrete tools and

best practices.


have you decided on a solution after comprehensively analyzing all of

the relevant factors? hopefully the answer is yes. But how can this soft-

ware solution actually improve your business? can the provider or his

implementation partner really help your project be successful? how do

you implement the chosen solution so that it is profitable?

heiler senior pim consultant michael Weiss states: “the successful pim

project relies on a specialized consulting methodology. it should cover

three key areas: business processes, technical implementation, and pro-

fessional project management.”

consulting method/business processes

a process-based consultant methodology provides a process map that

demonstrates all possible business processes. the key here is to perform

an end-to-end analysis of the process and system boundaries of specific

pim requirements.

the five main pim processes that business consultants examine are:

> input management, data integration

> data management, data authoring, data mastering

> asset management

> internationalization

> output management, data syndication, channel distribution

one sub process that is relevant in every specific pim scenario in the area

of data management is, for example, setting up an item or product. Just

like all the other process steps, this requires a specific procedure in order

to ensure that all of the required information is at hand. the result of

this is that specific requirements will be derived and proposals will be

created for the recommended approaches to the solution.

Focus on an implementation style and methodology for pim.

„The successful PIM project relies on a specialized consulting method-ology.”

Michael Weiss, Senior PIM-Consultant, Heiler Software

An example of the “data management” sub processes


For example: > What are the conditions for establishing articles and / or prod-ucts? Which upstream systems (plm, erp, external sources such as upstream suppliers) are involved in setting this up? at what point / milestone do these data become relevant to pim?

> Which procedure is recommended for collecting information? does it make sense to conduct workshops or individual interviews? Which roles and departments, and which external partners should be con-sidered; which stakeholders are relevant? What are the typical ques-tions that need to be asked, and which ones are necessary?

> What are the tools that can help with this? (Questionnaires and templates for documentation and evaluation)

> What other sub processes are going to be influenced by this?

> What are the industry-typical best practices?

> What concrete solution approaches can be mapped to the specific requirements profile? are customer-specific enhancements needed in addition to standard functions? Which applications should be modelled as an implementation design?

implementations method

in order to implement the new business processes, or ones that have

been modified to conform to requirements in a solution, an appropriate

implementation is required – one that builds seamlessly on the process

view. doing this ensures that the proper software and hardware are used.

it takes care of test scenarios and test management. it ensures that cus-

tomized adaptations function optimally. as a rule, technical consultants

usually take on these and similar tasks. they work with the customer

to find a way to pass the customer solution on to support in the best

manner possible for further assistance regarding the defined milestones.


project management methodology (pmi)

every project needs a professional project management. a good project

therefore requires a project office so that project goals and risks, the

schedule, and costs can be carefully and accurately monitored. this

allows for changes or delays in the project to be handled more effi-

ciently because they are transparent and communicated. the project

management institute http://www.pmi.org certifies employees according

to international standards. this helps pim customers achieve optimal

“expectation management,” helps them adhere to important milestones,

and of course, helps them measure the success of their solution.

Conclusion: When choosing your pim solution, don’t just rely on the

strength of the company and its scope of function. Focus rather on

selecting the proper methodology in order to ensure your project and

solution is successful. the last chapter will cover what the success factors

and criteria are for measuring this.

measure performance and results of pim.

When introducing software that is going to significantly modify processes

and impact the success of the business, it is critically important to be

able to demonstrate rapid, measurable success. this study (http://www.

pim-roi.com) is oriented toward the “heiler pim Business Value model.”

thus, measurable criteria can be divided into three groups:

> the business model: implementing a particular business model, or even an entirely new one.

> growth: increasing sales and profit margins.

> cost optimization: the results of streamlined and efficient processes.


Tip:

Ask your vendor or imple-mentation company for a business value model. They can provide a set of performance indicators to choose from. Pick those which match your busi-ness cases.

Kpis for measuring cost savings

Kpis for measuring sales and growth

step 1 number of returns

step 2 completeness of data

step 3 error rate

step 4 search times for items

step 5 production costs catalog

step 6 localization costs

step 7 individualization costs

step 8 data processing time

step 1 total sales

step 2 conversion rate

step 3 time-to-market

step 4 new customers

step 5 data integration times

step 6 product innovations

step 7 sales per chart

the entire global business consulting team at heiler software works

according to this methodology, and trains the international partner net-

work as well as the internal departments. retailers and manufacturers

can determine their success factors using a matrix of various key per-

formance indicators (Kpis) and benchmarks, and define them as criteria

for evaluating the success of the project.

companies that launch mdm projects know their business and possess

a clear vision. a product information management solution supports the

company in saving on costs and promoting sales.

the following example shows the top 15 factors that 300 large com-

panies rated as the most important in a heiler study for measuring the

success of a pim (mdm for product data). these are just an excerpt of

all the factors that the companies named.

stuttgart, germanyheiler software agmittlerer pfad 5d-70499 stuttgartgermanytel.: +49-711-13 98 4-0Fax: +49-711-86 66 301

detroit, usaheiler software corporationpenobscot Building645 griswold, suite 1888detroit, michigan 48226tel.: +1-313-483-7100

toronto, canadaheiler software corporation1 dundas st. West, suite 2510toronto, onm5g 1Z3, canadatel.: +1-416-260-4705

sydney, australiaheiler software australialevel 222 market stsydney nsW 2000tel.: +61-2-9008-9773

e-mail: [email protected]

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