The ROI of PIM: Calculate thevalue of your next project
Find out how to calculate theROI of a PIM solution

The ROI of PIM: What you need to know
The Product Information Management (PIM) market continues to expand year after year. The compound
annual growth rate (CAGR) of the PIM market is expected to grow at around 25.1% by 2027 from20191,mainly due to the increasing number of businesses that are learning about the benefits of PIM andhave started to adopt the technology. However, many companies still continue to rely on outdated softwareand inefficient processes. Acquiring a PIM is a significant business investment, and its implementation often
disrupts organizations due to induced change management. As a result, it can be challenging to present thebusiness case of PIM to stakeholders. This means that crafting a solid business case with ROI benefits is
crucial for organizations that are considering a PIM solution.
A major component of calculating ROI of PIM is to first understand the qualitative and quantiative benefits thesolution can bring to the business.
When considering a PIM solution, some key questions to consider are:1

How much are we looking toimprove our bottom line?

6

Can it improve market
performance?

2

What kind of productivity
gains do we expect?

7

Will it aid in minimizing
product returns?

3

How efficient do we need
our operations to be?

8

How can I accelerate myproducts’ time to market?

4

How can I improve collaboration
across different teams?

9Will it help my brand strategy
and messaging?

5

How will it impact thecustomer experience?

Want to learn more about how to create an optimal
PIM business case? check out: PIM – Building theBusiness Case for Project Success

10

What kind of data quality
improvements will I see?

Get the E-Book →Calculating the ROI of PIM
Computing for the ROI of any investment involves a simple equation:

ROI =Benefit of the Investment - Cost of Investment
Cost of Investment

A PIM vendor determines the cost of investment based on their solution, customer requirements andsometimes even the customer’s initial project budget. In the latter case, the cost may increase or decrease
after further scoping takes place. However, computing the benefit of the investment is more complex. Itrequires a more in-depth look at how a business operates before and after the PIM implementation.
Identifying the current state of the organization, as well as how consumers are interacting with the brand are
all critical factors in determining the specific value a PIM provides to a business. All this information will thenyield a measure of the total benefit of the investment.

One way of determining the benefit of the investment from a PIM is by taking a look at efficiency gains.
Businesses should start by identifying the following:• Number of fields managed• Type of information that needs management (calculation, conversion, etc.)• Number of languages supported (if information needs to be available across multiple languages globally)• Number of channels• Number of regions• Steps involved from conception until the manufacturing of a product• Other types of relevant information that need management (such as digital assets or meta-data)• Cost of preparing data for a given channel to create a seamless omnichannel product experience• Cost of yearly product data maintenance (such as adding, editing, translating or deleting)• Costs allocated per employee involved in product data management• Estimated time it takes to manage product data

Once this information is acquired, on a basic level, calculating the efficiency gains from a PIM involves thefollowing step.

Step 1: Identify the number of fields to manage
Identifying the number of fields to manage requires knowing the number of Stock Keeping Units (SKUs) andmultiplying it with the number of attributes per SKU:

Numbers of fields to manage = Number of SKUs * Number of attributes per SKU

This provides a baseline on the total number of attributes that must be handled across all SKUs.
However, this number does not reflect the reality of everything that must be managed or how often.

Step 2: Determine how many fields need to be localized and managed
A more accurate metric takes languages used by global sites or partners into account, as well as thefrequency of maintenance for all product data. For each language, determine the number of productdata fields that will be impacted:

Field to localize and manage= No. of SKUs * (Impacted fields per Language * (No. of additional languages -1))

Step 3: Calculate the total number of fields to manage
The number of fields to manage and the additional fields to localize must be added together to get the total
number of fields managed.

Total number of fields managed= Number of fields managed + Fields to localize and manage

Step 4: Determine the number of yearly SKU values to maintain
Every SKU is not updated yearly. The number of SKUs that have to be updated every year can be obtained by:Yearly SKU values to update= Total number of fields to manage * Yearly SKU updates (%)

Step 5: Identify operational costs
Now, to determine operational costs, the current cost of managing all product attributes must be calculated
by using the following information:• Hourly cost of employees that maintain and update values for all SKUs
• Number of attributes that can be updated per minute
These numbers can be used to measure the time required to update product attributes:

Time to maintain SKUs =Yearly SKU values to update(Attributes updated per minute * 60)

If these metrics are difficult to obtain, you can use an estimate. According to an AT Kearney2 study, anemployee spends 25 minutes per SKU per year to manually cleanse out-of-sync product information.
After the time required to update product attributes is identified, multiply it with the cost to update values
per hour to get the total annual cost to update.

Total Cost to Update= Cost to update values (per hour) * Time required to update

Additional costs for consideration include the number of systems currently being used to manage all these
attributes (run time, licenses, etc.)
The next step is to repeat the total cost to update computation, assuming a PIM system is already in place.
Take into account how a PIM solution minimizes or eliminates repetitive tasks. For instance, a PIM reduces
the time to update a product by 30%3.
Once these calculations are complete, simply subtract the calculated Total Cost to Update with a PIM, fromthe original Total Cost to Update to get an estimate of efficiency gains from using a PIM.

Efficiency Gains – Calculations at a Glance
Efficiency Gains Computation

Without PIM

With PIM

5,000,000

5,000,000

30%

30%

1,500,000

1,500,000$50.00$50.00

Average number of edits done (minutes)

1217Required time to update (hourly)

2083

1471

$104,167$73,529

Identify the number of values to update
Total number of fields to handle (estimate)
Identify the number of values to update
Total number of values to update
Identify the total cost of updating products
Hourly salary of data managers ($)

Total cost of update ($)
Total efficiency gains$30,637

While these numbers can demonstrate significant gains, it is important to remember there are additional
efficiency gains from a PIM that can be included if they are known. For instance, time searching for
information can be reduced as much as 2 hours a week per employee3. Furthermore, PIM solutions also
provide value beyond efficiency gains, including gains from data quality alone, better decision-making,customer insight and experiences to name a few.

Essential Benefits of a PIM
As we discussed above, productivity improvement is only part of the value a PIM can provide to anorganization. For example, for retailers, PIM solutions can maximize revenue in a variety of ways:

Higher e-commerce conversions
According to AT Kearney, online conversion rates can increase from 17% to 56% due toimproved product information3. Furthermore, 69%4 of prospective online shoppers rely on
e-commerce features enabled by information managed or governed from a PIM solution.

Increased revenue from additional channels
86% 5 of consumers are willing to pay for a better customer experience. A PIM solution
enables the delivery of a uniform buying experience across all channels, including mobileand desktop.

Decreased returns
22% 6 of product returns are due to inconsistent product information. A PIM promotes
customer trust by ensuring they have access to accurate, rich and up-to-date productinformation, all the time.

Reduced cart abandonment
20%7 of cart abandonment is due to incomplete or unclear product information. With PIM,vague or incomplete product information can be prevented as it is equipped with error andduplicate detection capabilities.

Furthermore, if the PIM solution you have chosen includes Digital Asset Management (DAM), this adds
substantial benefits, as organizations without DAM can spend over $44,000 a year just trying to manage
assets like images, videos and documents8.

The Benefit of Investment Calculation - at a Glance
As we discussed above, productivity improvement is only part of the value a PIM can provide to anorganization. For example, for retailers, PIM solutions can maximize revenue in a variety of ways:
Efficiency Gains Computation

Without PIM

With PIM

5,000,000

5,000,000

30%

30%

1,500,000

1,500,000$50.00$50.0012172083

1471$104,167$73,529

Identify the number of values to update
Total number of fields to handle (estimate)
Identify the number of values to update
Total number of values to update
Identify the total cost of updating products
Hourly salary of data managers ($)
Average number of edits done (minutes)
Required time to update (hourly)
Total cost of update ($)
Total efficiency gains
Efficiency Gains Computation$30,637

Without PIM

E-commerce conversion improvement

With PIM
20%

E-commerce revenue (yearly)$10,0000,000

Profit with 20% contribution margin*$60,000.0

Increased revenue from more channels$500,000

Profit with average net profit margin (3%)$15,000.00

Revenue lost to returns**$3,000,000

Profit with average net profit margin (3%)
Revenue lost to cart abandonment***
Profit with average net profit margin (3%)$2,340,000$19,800.0$23,333,333$18,666,667$140,000.0

Efficiency Gains$30,637.0

Increased revenue with PIM$234,800.0

Total efficiency gains$265,437* Margin for retailers at 3%. Other industry margins can be found here.
** About 30% of products bought online are returned.
*** Cart abandonment rate is about 70%

Since PIM solutions are typically significant investments over investment periods, the total benefit ofinvestment can then be projected over a number of years before a final ROI calculation is performed.

Beyond Revenue and Productivity
There are a lot of ways for a company to boost its revenue further, e.g., promotions and discounts, engaging
ads and online presence, and an effective marketing strategy. However, some PIM benefits in this regard canbe rather challenging to quantify. For instance, a PIM:

Accelerates time-to-market
With competition getting more stringent each year, companies must launch products faster,
get to consumers first and extend their selling days. A PIM helps eliminate silos and manual
processes that cause product data inaccuracies and inconsistencies. For instance, a wellknown apparel brand manufacturer was able to reduce time-to-market from months toweeks. With a PIM, companies can easily translate, localize and publish consistent productinformation across channels, dramatically reducing time-to-market.

Enables exceptional product experiences
Enticing consumers to explore, engage and convert requires rich product content. It must
consist of attention-grabbing visuals, along with accurate and complete product information.
Failure to provide accurate product information ultimately results in lost revenue anddecreased customer loyalty:• Online shoppers often leave a website in 10-20 seconds, and so it’s a must to engage
them during the first ten seconds9• 57% of consumers cite “lack of information about the product” as the primary reason toabandon an online purchase10

Case studies
Finally, a PIM ROI computation can also be supported by real-world samples or case studies of successful
PIM implementations. Learn how some leading brands gained impressive results from their PIM investments.

Zijerveld, an established supplier, wholesaler and retailer of assorted local and international cheeses, usedtheir PIM solution to:• Centralize their manually managed and usually error-prone data.
• Comply with GS1 syndication standards and meet additional requirements by retailers
and supermarkets alike.
• Manage digital assets such as videos, images, and smart documents.
• Ensure maximum data quality checks for compliance.

Lacoste, a world-renowned fashion brand was able to leverage PIM to:• Boost its online and in-store marketing processes and accelerate its time-to-market.
• Become present on all channels, serving unique shopping experiences to its consumers.
• Reduce the time it takes to market a product from months to weeks.

Intersport, a world-leading sporting goods retailer used PIM to achieve:• Expanded its e-commerce presence to counter competitors such as Amazon andZalando while maintaining a good relationship with said brands.
• Automated their data importing processes with the least business disruption possible.
• Established a strong e-commerce presence while easing the burden of managing complex
product data from multiple and disparate systems.

Choosing the right PIM
vendor is vital to avoid
unnecessary costs andother risks.

Learn how here →Implementing asolution is never easy
but it can be simple
with the help of an
implementation partner.

Learn how here →References1

https://www.globenewswire.com/news-release/2019/08/02/1896142/0/en/Global-

Product-Information-Management-Market-Will-Reach-USD-61-263-Million-By-2027Zion-Market-Research.html
2

https://www.linkedin.com/pulse/what-product-information-management-pim-vikram-vik-gundoju/

3

https://books.google.com books?id=sMwkBAAAQBAJ&pg=PA22&lpg=PA22&dq=PIM+edit+data+faster+by&source=bl&ots=8uHsNvbs97&sig=ACfU3U0aOExJ7PcwmZxwHu7jH4kZOPs4TQ&hl=en&sa=X&ved=
2ahUKEwif6vjCvMPpAhUnhOAKHSd4CNIQ6AEwCXoECAoQAQ#v=onepage&q=PIM%20edit%20data%
20faster%20by&f=false4

https://www.forrester.com/report/Polishing+Up+Your+Products+Why+PIM+Really+Matters/-/E-RES116038

5

https://www.digitalpulse.pwc.com.au/infographic-customer-research/

6

https://chargeback.com/top-10-reasons-for-a-product-return/7

https://www.nngroup.com/articles/product-descriptions/8

https://www.liferay.com/blog/en-us/products-and-technology/3-new-features-to-manage-bulk-digital-asse

ts-with-liferay-dxp-7-2
9https://www.nngroup.com/articles/how-long-do-users-stay-on-web-pages/

10

https://content-na1.emarketer.com/b2b-marketing-trends-2020-roundup11

https://www.bigcommerce.com/blog/abandoned-carts/#statistics-shopping-cart-abandonment

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