What is the difference between PIM and ERP?

A frequent question we get asked at Pimvendors is: what exactly is the difference between a PIM and an ERP? In this article, we will delve a bit deeper into the similarities and differences between the two systems in the hopes of clearing up any questions you might have.

What is PIM?

As you know, ‘PIM’ stands for: ‘Product Information Management system’. Some of you might be thinking: ‘Wait, I have a product information section in my ERP. Why would I need to switch to a PIM?’ Well, when looking at it from a fundamental level; a system is nothing more than a structured collection of files.

Look at a PIM as more of a (master) data maintenance system for your customer-facing product information, in contrast to a more generalized collection of raw product data. Also, a PIM is much more networking centered than an ERP and has certain functionalities and compatibilities which come in handy for this purpose.

For instance: PIM allows you to subscribe to incoming data sources. It publishes them to listening systems and maintains your data quality management (DQM) with more ease and oversight than possible with ERP. What this comes down to, is that you as producer, wholesaler or online retailer are able to centrally collect, process, and maintain product data. Also, it allows providing your partners and distributors with this information through various output channels and (online) media.

Furthermore, a PIM is specifically built to start subscribing to content from other sources and publish them to listening systems. This could be print, website(s), your native mobile commerce app, or a marketplace.

Even though this could also be done with an ERP, it would require considerably more effort, as the level of configurable automatization is lower than that of a PIM.  There would be no guarantee it would keep working after an ERP upgrade, or change in interfacing systems.

What is ERP?

Enterprise resource planning (ERP) is a type of software system that helps organizations automate and manage core business processes for optimal performance (Microsoft Dynamics).

Enterprise Resource Planning (ERP) systems are more transactionally oriented. They are meant to structure and optimize your sales-related business products. Your ERP would be at the heart of your organizational processes, e.g. in control of your stock inventory and ledger.

If you have an ERP, a well-suited PIM is meant to be an expansion of its capabilities. The synergy of both systems will significantly increase your process- efficiency and sales. An ERP handles your raw product info as the first step in a data processing journey. A PIM takes that information and refines it to create marketing content geared towards sales success.

However, If you have a PIM as your leading system, the flow of data goes the other way around. A long-tail strategy will profit from this kind of setup. The ERP will receive the sales from the eCommerce environment and is then able to absorb them into the bookkeeping.

Taxonomies

The unique advantage that comes with a PIM is the possibility to introduce product taxonomies. As discussed in a different article (Taxonomy), the addition of product hierarchy and taxonomy in your product data allows for more efficient use of your website. It also helps you boost your eCommerce sales.

Taxonomy lets you define product attributes, product grouping, automatic image-resizing, and the incorporation of synonyms. An ERP is unable to dynamically group products based on differentiating attributes. What would be 7 different items in ERP, would just be one grouped item in a PIM.

There are many benefits of a PIM vis-à-vis ERP, but here are some of the most important ones:

• A PIM is designed to be able to import and collect your product data from different sources;
• A PIM allows you to normalize your data processing and monitoring, with the primary goal of increasing data quality;
• A PIM enables you to export your product information through various channels, or their publications.

How do I find the best PIM?

We recommend that you would start thinking from your own eCommerce output. Where do you need your content most? Are you publishing on a website? An app? Digital marketplace? Furthermore, when selecting your PIM, it’s important to find one suited to other eCommerce systems, such as CMS and a configurable search engine.