Managing product data is no small task, and the numbers show just how much impact it can have.
A staggering 83% of companies report that poor data quality negatively impacts their business initiatives, and while 79% say data is directly tied to their business objectives, only 2% trust their data entirely. What’s more, 56% of organizations lose sales opportunities because of bad data quality.
Product data management (PDM) is all about keeping your product information organized and accessible, so everyone on your team stays on the same page. In fact, businesses that invest in proper PDM systems see up to a 30% improvement in productivity.
But how does product data management work and how to select the right PMD solution for your business?
What is Product Data Management (PDM)?
First, let’s start by explaining product data management. Product data management, or PDM for short, is a system that centralizes and organizes all product-related data throughout a product’s lifecycle, from its initial design to market release.
It encompasses a wide range of files, including CAD files, technical specifications, bills of materials (BOM), design drawings, and manufacturing requirements.
PDM helps teams from different departments—like engineering, production, sales, and marketing—to work together effectively and keep accurate, current product information by combining data into a single, unified platform.
Managing product data is essential for businesses, especially as unstructured data becomes increasingly difficult to handle.
For example, an e-commerce apparel store may manage extensive product information such as descriptions, images, specifications, and pricing across multiple sales channels.
Without a PDM system, manually updating and distributing this data can be time-consuming, error-prone, and lead to customer frustration due to inconsistent listings.
A well-implemented PDM system not only streamlines product data management but also enhances workflow automation reduces errors, and ensures data accuracy and security. It aids in managing revisions, tracking changes, and optimizing data to meet specific requirements.
Types of Product Data Management Systems
PDM systems are generally divided into two main categories:
- on-premise,
- and cloud-based solutions.
On-Premise PDM System
An on-premise PDM system is hosted on the organization’s internal servers, giving businesses more control over their infrastructure. This level of control can be particularly useful for companies handling sensitive or confidential information, as they can manage their own data security protocols.
Another advantage of on-premise systems is the ability to customize them extensively. Organizations can tailor the system to fit their unique workflows and integrate it with proprietary software, ensuring it aligns with their specific operational needs.
However, on-premise PDM systems come with high costs. The initial setup requires significant investment in hardware, software licenses, and IT staff to manage and maintain the system. These costs can accumulate over time with necessary updates and ongoing maintenance.
In addition, on-premise solutions often limit accessibility, as they typically only allow access to employees within the company’s network. This can create difficulties when collaborating with remote team members or external partners.
Cloud-Based PDM System
On the other hand, cloud-based PDM systems are hosted on remote servers managed by third-party providers. These systems are known for their scalability and accessibility, allowing users to access data from virtually any location.
One of the key advantages of a cloud-based PDM is the lower upfront cost. Instead of investing heavily in infrastructure, businesses pay a subscription fee, which can be more manageable, particularly for small- to medium-sized companies or startups.
As organizations grow, cloud-based systems can easily expand to accommodate more users, data, and workloads without the need for significant hardware upgrades.
Despite these advantages, cloud-based PDM solutions may raise concerns about data security, as companies must trust third-party vendors to manage their sensitive information.
While cloud providers generally implement strong security measures, some organizations may still be hesitant to rely on external vendors.
Another potential drawback is the risk of vendor lock-in. Once a business adopts a specific cloud-based system, it may face difficulties switching providers or migrating data, which can limit flexibility in the future.
How Does PDM Work?
Product data management software helps companies organize, manage, and secure essential information related to the products they design, manufacture, and sell.
It works by providing a centralized, secure database where all product-related data, such as technical specifications, design files, documents, part numbers, and pricing, is stored.
A PDM system functions as a digital vault for product data, ensuring that all stakeholders across an organization can access, use, and update information as needed. However, access is controlled, with administrators determining who can view or modify data at various stages of a project.
A key component of PDM software is a central repository for storing product data, allowing team members from different departments to retrieve the information they need. To prevent issues such as data corruption, PDM systems use a check-in/check-out system to manage file access, ensuring that multiple people don’t edit the same file simultaneously.
Revision control is another important component, enabling teams to track changes over time, create an audit trail, and restore previous versions if necessary. Advanced search tools make it easy to find specific files based on parameters like file name, type, or modification date, which is especially useful in large data systems.
Permissions and access controls ensure that only authorized users can access sensitive information, maintaining data security and confidentiality. Additionally, automated workflows help move data through the review and approval stages, streamlining the validation and release of new or updated product information.
What is the Difference Between PDM and PIM?
PDM (Product data management) and PIM (Product information management) are both part of PLM (Product lifecycle management), but they serve different purposes.
While both PDM and PIM systems store, organize and manage product data, the key difference lies in the type of data they handle.
PDM systems focus on managing engineering and design files, and optimizing the development process. These systems store technical specifications, CAD files, and design documentation, which are crucial during the product development phase.
Once the product is ready for the market, PIM systems take over. PIM is designed to collect, organize, and distribute product data to sales and marketing teams. It ensures that product information is complete, accurate, and engaging, driving better customer experiences.
PIM systems enhance the buyer’s journey by managing product descriptions, images, pricing, and other customer-facing details, making it easier for businesses to sell products across various channels and platforms.
In short, PDM handles the raw product data during the development phase, while PIM transforms that data into rich content that supports sales and marketing efforts.
Some businesses may need both systems, especially if they are involved in complex product development. However, distributors and retailers may find that a PIM solution alone is sufficient, especially if their focus is on optimizing the customer experience and driving revenue through sales channels.
How Product Data Management Can Benefit Your Business
Implementing a product data management system can transform how your business handles data, leading to improved efficiency, collaboration, and ultimately, growth.
Here’s how a PDM system brings value to your organization:
PDM System Increases Organization
A PDM system increases organization by centralizing scattered product data from multiple sources into a single repository.
This ensures there is one clear, reliable source of information, reducing confusion and minimizing the time spent searching for specific data. With easier access to critical information, teams can focus on growth opportunities and more strategic tasks.
Improved Communication and Collaboration
With nearly 72% of businesses considering their data as a strategic asset, structuring and organizing it properly enhances team operations.
A PDM system ensures that all departments work from the same up-to-date information, avoiding version control issues. Teams can collaborate more effectively on the same files while staying informed of any changes made, breaking down silos, and improving workflow efficiency.
Improve Time-To-Market
A well-integrated PDM system can also improve time-to-market by streamlining product data syndication across e-commerce channels through robust APIs.
This enables the fast and efficient distribution of standardized product information, helping you reach your target audience quickly and outpace competitors.
Reduce Product Lifecycle Time
PDM helps reduce product lifecycle time by streamlining processes and eliminating redundancy.
Businesses may swiftly update and reuse data throughout the product lifecycle by having a centralized hub for product and process information, which enhances decision-making and lowers errors.
Ensuring Compliance With Regulatory Guidelines
Another advantage of PDM is ensuring compliance with regulatory guidelines. Different platforms and marketplaces have their own regulatory requirements and data formats, which can be challenging to manage.
A good PDM system optimizes product data to comply with these various guidelines, keeping products active and ensuring smooth operation across platforms.
Lower Costs
Lower costs are also a major benefit. With global spending on data management estimated at $315 billion, managing product data efficiently can significantly reduce operational expenses.
A product data journey management (PDM) solution reduces costs by optimizing procedures and reducing errors.
Better Customer Experience
A PDM system contributes to a better customer experience. With accurate and up-to-date product information readily available for sales, marketing, and customer service teams, businesses can deliver consistent, clear product messaging across channels.
This not only enhances the customer’s buying journey but also boosts overall satisfaction.
How to Select the Right PDM Solution for Your Business
Now that you’ve met PDM and all its components, you might wonder how to select the right PDM solution for your business.
Here’s a guideline to help you make the right choice:
- Assess Your Business Needs
Start by evaluating your company’s short-term and long-term requirements.
- Are you in a phase of rapid growth that demands a scalable solution?
- Does your industry have stringent security standards?
These factors should guide your comparison of PDM options.
- Consider the Financial Impact
Weigh the costs associated with each PDM system, including initial setup, ongoing maintenance, and future upgrades. Select an option that aligns with your budget while meeting your operational needs.
- Evaluate Security Requirements
The sensitivity of your product data will dictate the level of security required. Choose a PDM system that offers the right balance of security features tailored to your industry.
- Check Integration Compatibility
A PDM system should seamlessly integrate with the other tools your business uses. Opt for a solution that enhances your workflow by connecting effortlessly with your existing software.
To learn more about how product data management can streamline your PDM processes, contact us today and explore how Product Data Command can help you make the right choice for your business.
