More and more companies are adopting Product Information Management (PIM) solutions to help speed up their digitalization efforts, solve their data management problems and grow their business. The PIM market’s projected compound annual growth rate (CAGR) is at 25.1% by 20271 — a testament to the solution’s prowess to deliver real business results.
However, acquiring a PIM solution requires a significant investment. This means that for any organization, calculating the ROI of a PIM is a critical step to understand both the short term and long-term benefits of adopting a PIM.
Calculating the ROI of any investment involves a rather simple equation:
While the cost of investment is rather simple to acquire, the benefit of investment can require a lot more effort to quantify.
Efficiency gains and impact on the bottom line
The value of a PIM solution to a business can be measured in terms of efficiency gains or how it has improved the organization’s current data management and processes, as well as whether consumers have responded positively to other PIM-related benefits such as improved product information. Let’s take a quick glance at these two factors:
Here are four key variables any organization needs to identify to obtain efficiency gains from a PIM solution:
1. Number of fields managed
2. Number of fields that must be localized
3. Number of yearly SKU values to maintain
4. Operational costs (which include the hourly cost of employees that maintain/update fields)
Impact on the bottom line
Identifying upticks on the bottom line is a good way to find out if consumers have reacted well to changes in an organization. For example, for a retailer, good indicators of benefits from a PIM solution, include:
- Higher e-commerce conversions
- Increased revenue from additional channels
- Decreased returns and cart abandonment
Other variables are also key to determine the benefit of a PIM investment. However, some of these benefits may not be as tangible or quantifiable, such as consumer perception, positive experiences resulting in repeat business, recommendations or even loyalty.
Finally, estimates of the value of a PIM solution can also be found in real-world samples such as case studies of similar and successful PIM implementations. Therefore, it is important to find any applicable examples and use them as a criterion for how a PIM can positively affect the organization.
How to get started?
Identifying the above metrics is the very first step to obtaining the ROI for a PIM system. However, actually carrying out the calculations involves more specific steps. To find out more about how to start to evaluate the ROI of a PIM check out our whitepaper!