PIM is also finding a home in the health-care industry. Premier Inc., a San Diego–based health-care group-purchasing organization, is using the technology to organize and present detailed information on an array of different medical products. "We buy about $21 billion a year in medical, surgical, and pharmaceutical products, as well as capital equipment," says Joe Pleasant, Premier's chief information officer. "We provide services to about 1,700 hospitals."
As a group purchaser, Premier negotiates prices with suppliers and provides product and pricing information to its customers. "We needed a way to store information on all of our products, and efficiently present that information to our customers," says Pleasant. The firm was using an in-house-developed data repository, which offered limited analytic intelligence; adding or changing product attributes required a lot of programming work. That's a big reason why Premier turned to Perfect Product Suite, a PIM system developed by FullTilt.
Perfect Product Suite is now the central repository for product data on 1.5 million medical products carried by Premier. The company plans to bring that number up to about 4 million SKUs in the next few years. "The system allows us to store information on 100-plus different attributes," says Pleasant.
The software has also enabled Pleasant's staff to improve the quality of product information. "We're able to serve it to other applications a lot more efficiently and to give our customers new views and insights into product information," he says.
The Road to ROI
Helping to propel PIM sales is the potential for significant and rapid ROI. A survey conducted earlier this year by the Yankee Group found that 63 percent of businesses that implemented PIM technology experienced increased sales resulting from an improved relationship with retailers. Meanwhile, 59 percent reported reduced logistical costs through better replenishment planning. Another 60 percent said that time spent by clerks or warehouse personnel correcting discrepancies or errors was significantly reduced.
To date, Proliance has invested $100,000 in the Comergent system it deployed at the start of 2005. Flynn expects that the software will eventually make a significant contribution to the company's bottom line. Corporate Express's Coleman, on the other hand, says he didn't need to formally calculate an ROI, simply because PIM technology has become indispensable to the company's daily operations. "We're dealing [now] with roughly twice the number of items we started with, and we're doing it with the same number of folks that we had when we began," says Coleman.
Since a PIM system is only as good as the data it contains, potential adopters must consider how the software will mesh with existing internal and external data repositories. "Data accuracy is really your top priority," says Flynn.
Reliable data can be fed into a PIM system in several ways. The prime information source is usually the company's own ERP system. Yet data can also come in from electronic data interchange and XML files sent by suppliers, financial markets, testing laboratories, and other business partners. Sometimes, information is even typed directly into the system. "You need to sit down with your software vendor and ensure that it understands what all your inputs and outputs and processes are about," advises Coleman.
Businesses adopting PIM technology must also make sure the people to whom they're sending the information have the capability to use it. While just about anyone can browse through a Web-based catalog, many customers aren't prepared to integrate product data into E-requisitioning systems and other advanced procurement technologies. "We had all these great things to send, but our customers didn't always have their own systems ready," says Flynn.
That's why business planning is important. The Yankee Group survey found that more than half of the companies that have implemented PIM software or plan to do so over the next 12 months — 52 percent — have also developed a business case for the technology. "Considering PIM's importance and complexity, it's not surprising that most companies aren't undertaking this investment blindly," says analyst Huang.
Flynn says careful planning has enabled Proliance to deploy a PIM system that is working well and generally living up to the company's initial expectations. "Anything that gives business data better coherency and visibility, and builds confidence, is good," says Flynn. "PIM wins on all of those counts."
John Edwards is a regular contributor to CFO.
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