How to choose between on-premise or cloud product information management

Organizations are redefining product information management (PIM) capabilities and rethinking how to deploy a PIM system with greater flexibility and agility. The options of on-premise and cloud are quite popular. Today, more than 80% of organizations have a multicloud strategy rolled out. PIM cloud seems to appeal to organizations as a potential lower-cost and lower-risk alternative to traditional PIM deployment. But, both options must be analyzed deeply to understand which one is more adaptable and beneficial.

On the flip side, most organizations struggle to identify the right deployment option to achieve desired business results. Making the wrong deployment choice can result in underutilization, poor performance, low quality and high costs, thereby inhibiting business initiatives. While selecting the option, here are key factors you should consider.

Analyze product information management deployment requirements

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

The more you align your business objectives and investments, the more balance you will attain from your new initiatives. But, along with that, you must also measure the return on investment for on-premise PIM software. And then examine the potential business returns of cloud PIM.

The cloud model gives more freedom, process efficiencies, tooling and automation compared to on-premise. As a result, you can potentially save on operational expenditure.

Validate model capabilities

Whether you choose on-premise PIM or cloud PIM, you must carefully check the capabilities on the necessary yardstick that demonstrate PIM’s ability to perform at a level of service quality and cost to meet your business objectives.

Another point is leveraging PIM benefits from an improvement perspective in the operational efficiency, service quality, automation and customer experience. However, performance across the range of PIM providers varies widely.

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

Know what capabilities can position you better to achieve predictable performance levels and costs for cloud-enabled applications and services.

Align deployment options with your enterprise strategic plan

One of the critical aspects of a successful PIM deployment option is to link up with your overall enterprise IT strategy clearly. Therefore, you should not dive deep into solving everything in one go. Instead, it would be best to focus on identifying key PIM activities that need to be done to implement and operationalize your cloud strategy.

Besides that, the alignment of teams and departments is also critical to making the project successful. You should connect with the high-level business strategy and direction from stakeholders and other staff members who are actually executing the work and making the decisions around how to implement the cloud PIM. This way, you can maximize end-user adoption of your cloud PIM system and win more confidence of key stakeholders throughout the cloud PIM vendor selection process and implementation.

It is always better to split your cloud PIM strategy into short-term, mid-term and long-term strategies and then act upon them.

Calculate and compare relative IT costs

The next step is to compare all terms and conditions offered by the cloud PIM providers and what advantages they provide over on-premise PIM. Then, you can calculate and compare IT cost based on the below factors:

• Software Licensing — Calculate on-premise PIM software and cloud PIM and understand how they both can be significantly different in short-term and long-term costs.
• Infrastructure — You must determine infrastructure costs as they differ for on-premise PIM and cloud PIM.
• IT administration— Mostly, opex cost is higher in on-premise PIM due to the management of related software and hardware. 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 get feedback on terms and conditions that can be improved upon at the time of deployment.

Start the implementation game 

Cloud product information management strategy is one thing. But the actual journey towards the cloud starts with implementation. Your cloud PIM implementation plan, assessments, cost models, architecture, roadmaps and other factors should be handled separately. Therefore, you should create a separate cloud PIM implementation roadmap.

It generally deals with challenges such as developing skills, architecting, estimating, provisioning, automating and operating at scale. For example, suppose you process millions of SKUs and a massive volume of product data and digital assets. In that case, you must prioritize implementation readiness to find early success in cloud initiatives and recognize the full benefits. A balanced implementation team with the appropriate skills and experience increases the probability of project success.  

It is always good to adopt an agile implementation approach. You should regularly evaluate your project’s progress and be prepared to course-correct if required. Along with that, you must also understand the ongoing maintenance costs post-implementation of your cloud PIM initiative.

Product information management: Make the move

Once you get the in-depth requirement analysis, capabilities and cost comparison, you can now define your way forward. Proper next steps are dependent on your business requirements and costs and whether these are aligned appropriately for the cloud PIM solution.

Sometimes, the existing model may be suitable for one enterprise. In contrast, the complete transition to cloud product information management may be best for others — whether it is increasing investments or shifting to a complete-cloud enabled model. The idea is to get the optimal performance to improve efficiency, reduce cost, and enhance the overall customer experience. So, understand the challenges and solutions related to both on-premise and cloud PIM and make the right move.

Whether you choose on-premise PIM or cloud PIM, you must carefully check the capabilities on the necessary yardstick that demonstrate PIM’s ability to perform at a level of service quality and cost to meet your business objectives.

Vandana Singal is the director of solution consulting at Pimcore Global Services.