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Strategies For Product Information Management Vital To Businesses, Study Says

The Yankee Group surveyed 350 execs about product information management and found that failing to invest in such a strategy could spell trouble for retailers, consumer goods, and other companies.
Automating product information management can cut annual costs for manual labor costs by a third, according to a study released this week by the Yankee Group.

To reap the full benefits of synchronizing data with retailers, the study says that suppliers should automate and standardize business processes, and aggregate product information in one database to share the data among internal divisions, such as finance, accounting, marketing and manufacturing. Consequences for failing to invest in a product information management strategy are inefficient internal processes and retailer chargebacks and penalties, the study says. The study is based on surveys of 350 IT and business executives at companies that either had implemented a strategy for product information management, or plan to do so within the next year. Industries participating in the survey were general merchandise, grocery, apparel, and over-the-counter health and beauty.

Companies often don't do enough internally to automate cross-functional product data management, according to the study. "Companies should begin by cleansing the data, create a repository, automate cross-functional workflows, and [build] direct integration to backend-ERP systems," says Kosin Huang, senior analyst at the Yankee Group. "It's a migration effort to expose the retailers to accurate product information. Most companies want to jump in without thinking about automating processes internally and deploying a [product information management] strategy."

More than half, or 52%, of the Yankee Group survey respondents said they have developed a product information management business case and experienced 25% in annual business improvements, such as increased customer loyalty, better customer service, tighter collaboration with partners and suppliers, and increased employee productivity. The biggest cost is software deployment, which in the first year can average $1.4 million. Companies that have a product information management strategy plan to increase investments during the next year to an average of $2.5 million, the study reveals.

Companies are willing to invest because they are finding concrete return on investment from product information management, Huang says. Many see positive returns from their implementation of product information management in as little as six to 12 months on an average $2 million investment, she says. "That hasn't been the case with radio-frequency identification deployments," Huang says.