More than half of responding companies' PIM investments meet ROI expectations
Boston — February 3, 2005 — Communications and networking research and consulting firm Yankee Group today announced the statistical findings of its 2005 Product Information Management (PIM) study, which concluded that PIM is a strategic investment for enterprise management.
Yankee Group conducted the study across 28 categories and measured operational effectiveness and top-line business growth improvements in which 75 percent of the respondent companies that supply retailer goods supported the research conclusion.
The study also found that adoption of PIM is not just in response to retailer mandates; but, companies from PIM applications and services also achieved measurable gains in ROI.
There are a number of business growth metrics that realize significant improvements as a result of strategic PIM, including optimized promotions management, customer service and channel relationship management.
In addition to business growth metrics, cost reductions from operations were also achieved, including the number of call center questions regarding basic item information and the number of instances when inventory levels were insufficient.
The survey also unveiled the following key areas where companies gained measurable ROI:
* Sixty-three percent of respondents that implemented PIM found that they increased sales resulting from an improved relationship with retailers
* Fifty-nine percent reported having reduced logistical costs through better replenishment planning
* Sixty percent said that time spent by clerks or warehouse personnel correcting discrepancies or errors were significantly reduced
* Fifty-nine percent said their inventory levels reduced through better phasing in and out of promotional, seasonal, or "roll-over" stock-keeping units
Supplementary of the study, Yankee Group has also released the "Top Questions & Answers for CPG and Retail Companies Investing in Strategic PIM." The Q&A discussion debunks the myth that PIM is just data synchronization. The firm said strategic PIM is about managing both internal and external data synchronization, creating a repository of item information that is consistently maintained and managing cross-functional workflows.
Yankee Group also found that many companies don't understand how to realign business processes to leverage a PIM investment. "Without realigning internal business processes, a company cannot maximize business benefits from a PIM implementation," said Kosin Huang, Yankee Group Business Applications & Commerce senior analyst. "PIM is a collaborative foundation for coordinating a company's business processes that touch product data, which is relevant for multiple parts of an organization."
Leveraging PIM, better channel relationship management and collaboration are all critical objectives for improved supply chain management initiatives, Yankee Group said. These data correlations indicate that PIM initiatives do not only benefit one party; but they add value to the entire supply and demand chain.