Product information

How to choose between on-premises or cloud-based product information management

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Organizations are redefining product information management (PIM) capabilities and rethinking how to deploy a PIM system with greater flexibility and agility. Both on-premises and cloud options are popular. Today, more than 80% of organizations have deployed a multicloud strategy. Cloud PIM appears to be appealing to organizations as a potential lower-cost, lower-risk alternative to traditional PIM deployment. But, both options should be thoroughly analyzed to understand which is more adaptable and beneficial.

On the other hand, most organizations struggle to identify the right deployment option to achieve the desired business results. Making the wrong deployment choice can lead to underutilization, poor performance, poor quality, and high costs, thereby inhibiting business initiatives. While selecting the option, here are the main factors to consider.

Analyze product information management deployment requirements

First you need to start performing an internal requirements analysis on the PIM deployment. The analysis should be based on features, performance, cost and new value added. With the results of this analysis, you can better predict or assess the overall cost of your PIM process, tools, and skills. They also help you reveal relative maturity levels and gaps in existing model and process functions.

The more you align your business goals and investments, the more balance you will achieve for your new initiatives. But, along with that, you also need to measure the ROI of on-premises PIM software. Next, examine the potential business returns of the PIM cloud.

The cloud model offers more freedom, process efficiency, tooling, and automation compared to the on-premises model. As a result, you can potentially save on operational expenses.

Validate model capabilities

Whether you choose on-premises PIM or cloud-based PIM, you should carefully check the capabilities on the necessary criteria that demonstrate the PIM’s ability to perform at a level of quality of service and cost to achieve your business goals.

Another point is to leverage the benefits of PIM from the perspective of improving operational efficiency, quality of service, automation and customer experience. However, the performance of the range of PIM providers varies considerably.

Evaluate each software deal you consider by asking vital questions for your specific business case at operational, regulatory, environmental, financial or other risk levels.

Know which features can better position you to achieve predictable performance levels and costs for cloud applications and services.

Align deployment options with your company’s strategic plan

One of the critical aspects of a successful PIM deployment option is to tie in clearly with your overall business IT strategy. Therefore, you shouldn’t dive deep into solving everything all at once. Instead, it would be best to focus on identifying the key PIM activities that need to be performed to implement and operationalize your cloud strategy.

In addition, the alignment of teams and departments is also essential for the success of the project. You need to connect to high-level business strategy and leadership from the stakeholders and other staff who actually execute the work and make the decisions regarding the cloud PIM implementation. This way, you can maximize adoption of your cloud PIM system by end users and gain the trust of key stakeholders throughout the process of selecting and implementing the cloud PIM vendor.

It’s always best to divide your cloud PIM strategy into short, medium, and long term strategies and then act accordingly.

Calculate and compare relative IT costs

The next step is to compare all the terms and conditions offered by cloud PIM providers and the benefits they offer over on-premises PIM. Then you can calculate and compare IT costs based on the factors below:

  • Software Licensing — Calculate software on-premises PIM and cloud PIM and understand how the two can be dramatically different in terms of short-term and long-term costs.
  • Infrastructure — You need to determine infrastructure costs because they differ for on-premises PIM and cloud PIM.
  • IT Administration – Typically, operating costs are higher in on-premises PIM due to associated software and hardware management. It is generally lower in SaaS PIM.

It is always beneficial to share comparisons, risky terms and advantageous concessions with internal stakeholders and departments and to get feedback on terms and conditions that can be improved at the time of deployment.

Start Implementation Game

The product information management strategy in the cloud is one thing. But the real journey to the cloud begins with implementation. Your PIM cloud implementation plan, assessments, cost models, architecture, roadmaps, and other factors should be addressed separately. Therefore, you should create a separate PIM cloud implementation roadmap.

It typically deals with challenges such as skills development, architecture, estimating, procurement, automation, and large-scale operation. For example, suppose you process millions of SKUs and a massive volume of product data and digital assets. In this case, you need to prioritize implementation readiness to quickly find success in cloud initiatives and recognize all the benefits. A balanced implementation team with the right skills and experience increases the likelihood of project success.

It’s always good to take an agile implementation approach. You should regularly assess the progress of your project and be prepared to course correct if necessary. Along with this, you also need to understand the ongoing maintenance costs after implementing your cloud PIM initiative.

Product Information Management: Take it to the next level

Once you have obtained the thorough needs analysis, capabilities and cost comparison, you can now define your path forward. The appropriate next steps depend on your business requirements and costs and their suitability with the PIM cloud solution.

Sometimes the existing model may be suitable for a single company. On the other hand, fully transitioning to managing product information in the cloud may be preferable for others, whether it’s increasing investment or moving to a fully cloud-enabled model. The idea is to achieve peak performance to improve efficiency, reduce costs and improve the overall customer experience. So, understand the challenges and solutions of both on-premises and cloud PIM and make the right choice.

Whether you choose on-premises PIM or cloud-based PIM, you should carefully check the capabilities on the necessary criteria that demonstrate the PIM’s ability to perform at a level of quality of service and cost to achieve your business goals.

Vandana Singal is Director of Solutions Consulting at Pimcore Global Services.

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