Most businesses naturally generate all types of data in their day-to-day activities. Before the advent of the digital age, such data was accumulated mainly for bookkeeping purposes. Bookkeeping ensured that businesses fulfilled their obligations to governing bodies like revenue-collection entities while fulfilling the primary objective: making a profit. Additional data such as customer feedback, which was collected through avenues like questionnaires, was often underutilized and tended to get lost in a multitude of other irrelevant business-related information. This position quickly changed with advances in technology, which created systems that can effortlessly gather business information and offer additional tools to help the company apply the data in a manner that would positively impact its growth.
Businesses quickly realized the numerous benefits these systems offered and encouraged developers to incorporate more specialized tools, culminating in the birth of what has come to be known as product data management systems. PDM systems have become increasingly popular. Recent studies have shown that more and more software development companies are coming up with new PDM software to meet the increased demand on the market.
What Is a Product Data Management System?
A product data management (PDM) system may simply be defined as a platform that gathers all data relating to a business on a single centralized platform. The systems allow a business to manage data, enabling workers to process and share the data. Simply put, a PDM turns data that would previously have been stored for very rudimentary purposes into valuable information that teams can use to collaborate and propel forward a business plan.
PDM systems provide numerous benefits which make them ideal for e-commerce. They, however, also have their fair share of challenges and demerits, mainly when utilized incorrectly. Therefore, to weigh the pros and cons of PDM systems, businesses first need to know the type of product data that a PDM system can help compile and manage.
PDM systems should not be confused with Product Information Management (PIM) systems, which are complementary systems that deal exclusively with product information, making it easy to store, organize, modify, and access the data to boost sales and marketing.
Types of Product Data
The types of product data associated with PDM systems include but are not limited to:
- Data on product characteristics – what a product is composed of/ a product’s properties.
- Data on product specifications/descriptions – things to do with the physical appearance of a product such as size, color, and other properties such as product’s number and models.
- Data on inventory/warehouse data – product quantity/stock.
- Ads data – metadata, keywords, tags, unique links to online sales platforms.
- Data on product origin/manufacturing data and instructions – certificates, licenses, and adherence to prescribed product standards.
- Sales/commercial data – pricing and client names.
- Data providing information from vendors/suppliers.
- Region-specific data – translations of most of the above to languages applicable in regions that a product is made available.
Benefits of PDM Systems to E-commerce
As mentioned earlier, a PDM system’s primary objective is to help a business accumulate and process data for various uses. The saying “time is money” particularly applies to companies. This reality makes PDM systems essential nowadays since they are geared toward time optimization within which a business conducts its business-related affairs, thus ensuring cost-efficiency. Moreover, PDM systems have proven benefits, which directly impact a business. They include:
1. Improving data management
The first and most obvious benefit of a PDM is enabling proper data management. This is because PDM acts as a centralized base where all types of information pertaining to a business are stored.
Data is always in constant motion and malleable in nature. Namely, data often comes in and goes out of a business, and it is constantly changing. To ensure business growth, data needs to be accurate and updated. Achieving this feat outside a PDM is a tall order since scattered data is useless data.
2. Promoting collaboration
A business is like a machine. To perform effectively, it needs to be well-oiled and running on all cylinders. Even a single underperforming cog can pull down the production of its corresponding cogs, negatively affecting the general output. Having data at a centralized repository makes it accessible to all individuals (cogs) within the many departments that make up a business. Such an approach ensures that every section does its job, contributing to the company’s larger vision.
PDM systems also encourage collaboration between like-minded businesses. PDMs help eliminate critical errors associated with business-to-business marketing databases, which recent research has shown to average between 10% and 25%.
4. Improving customer experience
Any business worth its salt knows the importance of constantly conducting market research to meet its customers’ ever-evolving needs. However, research is impossible without adequate data on the customers and their transaction habits. Without market research, businesses’ attempt at satisfying their clients becomes an aimless exercise without a final objective. Simply put, it would be much like throwing darts while blindfolded and still hoping to hit the bull’s eye. Businesses, therefore, need to structure themselves around making life easier for their customers – an endeavor that a PDM can significantly assist. Having all the product’s information/data in one location makes it easier for clients to access it.
With this in mind, clients are more likely to return to a business and even refer it and its products to other potential customers within and out of their circles. Yet, keep in mind: word of mouth is still one of the best ways a business can sell itself, even in the tech-driven social media age. Providing helpful information to customers also improves the speed at which products move from manufacturing to the market. In other words, with the PDM system, a customer gets detailed information about the product, and sales managers are informed about the precise location of their customers. Products stuck in inventory/warehouse are of no use for both the customers who need the product and a business that needs to sell the product to fulfill the primary objective of all companies – making a profit and continuing to grow.
Any business needs to distinguish between activity and productivity. The best way to describe the former would be equal to burning down a house to get rid of a rat. But, on the other hand, it is all about finding simple solutions for somewhat complex questions, which can, in this case, quickly set a trap. A PDM improves productivity at many levels. For workers, a PDM provides the necessary data to make informed decisions and updates. PDMs also make data cleansing/sifting possible. This reduces the risk of blunders by preventing data loss and helps properly designate it, saving a business from dealing with duplicate and conflicting files/data. A PDM also allows a business to automate some of its functions. Automation spares resources that can be reallocated to more deserving/demanding sections of a company, ensuring that no department lags behind.
Promoting the creation of subsequent products
Since businesses are all about offering solutions to current and potential problems, innovation is a must. Valuable future decisions are based arguably on past experiences.
A PDM is the perfect system to accommodate innovation since it records all the data relating to business and its product or services. With this data, companies can identify the latest trends in the market and make plans (and create products) to satisfy their clients’ demands in advance, setting them apart from their competitors.
Challenges of PDMs for E-commerce
A system needs to evolve over time to cope with emerging demands and threats. However, this constant change is easier said than done and tends to create a set of challenges unique for PDM systems. Here are the most common:
Unnecessary wastage of time
Most e-commerce businesses engage PDMs with the hope that they will solve all their product data problems. Unfortunately, this is not the case because most PDMs tend to provide features that handle some tasks better than others. To fully facilitate business performance, businesses require a degree of human involvement. For example, a PDM may provide access to the necessary product data in one centralized location. Still, it may not be as efficient, experienced, or sensitive as business agents or workers in interpreting the information. Unfortunately, with human integration comes human error and time-related deficiencies. For example, an experienced employee is likely to take hours or even weeks to correctly interpret and implement data – a development that leads to the wastage of time.
Increases in operational costs
Most PDMs require complementary systems like personal information management systems (PIMs) to plug holes they may leave open. Acquiring these additional systems means that companies have to dig deeper into their pockets. Online data management systems require updates or maintenance, which requires businesses to hire individuals who specialize in running such schemes. Companies may also lose revenue if they make decisions based on inaccurate or inadequate product data, which can significantly affect profit decrease.
Multiple sources of information
Information is valid only when adequately implemented. PDMs provide a standard pot of data, which has to be considered in its entirety when making business-related decisions. Therefore, a change in a single variable can lead to a misstep which can negatively impact the intended outcome. The saying “less is more” rings true here. Having multiple sources of information tends to keep personnel so occupied with data that they fail to apply their much-needed creativity. Without creativity, there is no innovation – a development that can gradually risk making a business obsolete or uncompetitive in a saturated market.
Creating poor customer experiences
PDM may provide access to product data but can’t constantly guarantee the quality of data interpreted. Data that isn’t properly cleansed is likely to include duplicates, which adversely affects product optimization. This creates the possibility that customers may spend more time than they usually go through the same information, leading to frustration and disinterest. They are then less likely to provide referrals to the business, stifling potential income streams.
Poor communication and collaboration between teams
Businesses typically have individuals working towards a common objective, aiming to achieve it faster and at the intended scale. A PDM system is thus essential since it facilitates smooth communication and promotes collaboration. If a PDM system were to fail, there would likely be delays in the exchange of information. In addition, the fallout of such a development would naturally affect collaboration, failing to adhere to the deadlines businesses set. When a product is introduced to the market, this process is as important as the product itself. After most of its demand has already been met by other competitors, introducing a product later would decrease the probability that customers would buy it. A dip in sales negatively affects business profits and the product’s future.
Finding the Right PDM Software
Having established why data management is essential, the next logical step is finding the right PDM software for your e-commerce business. In this case, the term “right” is subjective since what works for other companies may not necessarily work for you. Though many e-commerce products currently exist on the market, finding the right fit for your business means choosing the right partner to help you develop a checklist of your specific needs. The right partner enables you to cross the T’s and dot the I’s to ensure that you get all the benefits and can cope with the challenges associated with product data management software. Contact us to select the product management system that will be tailored to your business needs.