Advances in information technology have transformed the way products and services are conceived and marketed to the final customer. Compared to the traditional method where products were created in-house and then released to the market and tested, newer technologies emphasize and support the need for customization and personalization and incorporate data from third party sources to bring an enticing offer to life.
The modern innovation process overlaps the “concept development” phase with the “implementation” and “market introduction” in an attempt to keep the product design fluid and open to the modifications brought about by newer technologies and a rapidly evolving business environment filled with uncertain consumer trends and market demands.
Innovation Process: Traditional vs. Flexible Model
Despite living in a shaky business environment, companies are building rich internal digital infrastructures to “turn products into product platforms and provide a foundation for others to build upon”. Among them, Product Lifecycle Management (PLM) and Product Information Management (PIM) are two complementary data management solutions which aggregate product information and encourage the collaboration between business units and teams during the product’s lifecycle.
Product Lifecycle Management (PLM): Depository for Product Development Data
Product Lifecycle Management (PLM) is primarily used for the management of product data during the design, development and engineering stages of a new product. PLM is heavily involved in the innovation process and organizes and manages product information in an attempt to maintain and distribute a complete and useful product record that can be used for an effective manufacturing process. PLM has the following purposes:
- Streamlines the design and the production cycles – product data is consolidated and organized around the product development process and operations;
- Fosters customer-centric innovation through agile business practices and analytical tools which offer a deeper understanding of the customers’ needs;
- Encourages a collaborative environment between the different business units involved in the production process (e.g. engineering, IT and production);
- Develops and manages connected products – PLM breaks down the information silos and aggregates data from divergent product information cycles, suppliers, and manufacturing partners;
- Offers the ability to manage and manipulate CAD files and other product development data like Bills of Materials (BOMs) in a secure environment;
- Helps firms keep up with the internal and external standards of quality and comply with the industry/government rules and regulations;
Like PIM, it speeds up the time-to-market for new product introductions in an attempt to preserve and advance the company’s position in the marketplace. PLM also elevates the brand image and improves customer relationships through high-quality product experiences that are informed by real- time customer feedback and product usage data.
On the other hand, certain businesses have expressed security concerns, dissatisfaction with single-tenant cloud deployments and difficulties in migrating data from PLM to other systems. Lengthy deployments (and a lot of business process customization), multiple software versions and poor user interfaces generate difficulties in using PLM to its full potential. Organizations would also like to gain more access to the technical ecosystem of business partners to sustain cross-industry collaborations and transform the way in which they create and innovate their current product catalog.
Some of the future PLM features, currently in development, will be computer aided engineering (CAE) software, simulation, augmented reality (AR), and virtual reality (VR) functionality that allows customers to test and innovate on physical products before they’re even prototyped and enhance interactions with physical products in the field.
Product Information Management (PIM): Product Data Integration Across the Enterprise
However, Product Information Management (PIM) consolidates product data from multiple data sources including ERP and PLM systems. Data can be internally generated from operations, sales, finance, marketing, HR or external from marketplaces, cloud, mobile and IoT. Probably the foremost feature of PIM is that it cleans, enriches and synchronizes data and then pushes it across different enterprise levels, to business partners and on the media channels (omnichannel). As opposed to PLM, PIM also:
- Stores product master data into a central repository from where information can be accessed and used by different business departments when and as needed;
- Creates a single record for product data;
- Improves the product data quality of the enterprise and enforces data governance rules to prevent future data errors (e.g. duplicate records, inconsistent attributes);
- Closely intertwines with the marketing department to enrich the product content through specifications, different languages, technical details, digital assets (i.e. brand logos, pictures, and product videos), marketing copy and product reviews;
- Feeds data into the marketing campaign to suggest similar or related products, adds special offers and promotions, product bundles;
- Incorporates the customer experience and feedback and provides invaluable data to guide companies through the business decision-making process;
- Is flexible and scalable, ideal for managing product data during mergers and acquisitions;
Bottom line, PLM is heavily focused on streamlining the product data for the development process while PIM will gather, clean and enrich product information and distribute it across the business and omnichannel with the sole purpose of generating more sales. Both technologies save money, diminish the risk of human errors, incorporate feedback to optimize the product’s design and speed up the time-to-market for new product introduction (NPIs).