The modern business world revolves around data. So much so that, as of 2018, 67.9% of Fortune 1000 companies had a Chief Data Officer (CDO), up from 12% in 2012. More and more companies are starting to realize the importance of gathering and analyzing data.
As data processing becomes more prominent, you’ll see terms like “product data management” and “master data management.” Given how close these phrases are, you could easily assume they’re the same thing. But you’d be mistaken for doing so.
As you might’ve guessed from their titles, product data management and master data management are related. Both refer to ways of organizing information and making it useful to a business. But the data’s scope and the specific processes involved differ between the two.
Here’s a closer look at what separates master and product data management.
What Is Master Data Management?
Master data management, or MDM, involves gathering and refining master data so businesses can make more informed decisions. Master data is a broad category that includes everything from employee information to consumer behavior. It also covers the context for this data and rules on how companies can use it.
MDM compiles this master data from throughout the company into a “golden record.” The golden record serves as a single source of truth (SSOT) about all of a business’s information. With an SSOT, companies can analyze data faster and more thoroughly, since it provides a reliable, streamlined source of knowledge.
You can boil down the purpose of MDM to creating a single, consolidated version of all a company’s relevant data. It takes a massive pool of information and organizes it into a more manageable size. MDM allows you to make sense of big data.
MDM Benefits
One of the challenges with big data is handling its sheer size. When you have such enormous amounts of information, it can be tough to know how to analyze it. There are also bound to be some inaccuracies or other mistakes within a big enough data set.
MDM helps companies sift through the errors in their master data. An SSOT eliminates concerns over redundancies or irrelevant information. Without the help of MDM, data analytics might be slower and less accurate.
Master data is time-sensitive. Customer trends and business processes change frequently, so companies need to analyze data quickly to make timely decisions. By providing a clean and comprehensive record of master knowledge, MDM speeds up the analysis process.
What Is Product Data Management?
You’ll often see product data management called product information management, or PIM. You can probably tell from context that since MDM deals with master data, PIM is all about product data. Instead of working with all data streams in an organization, PIM focuses solely on data concerning their products.
You can think of PIM as a sub-category of MDM. But when most people talk about it, they refer to it as an alternative to MDM, not a part of it. In this context, PIM is like a more focused application of data management. MDM encompasses more, but PIM goes deeper.
Like MDM, PIM also produces an SSOT, but only over product data — not everything. It considers aspects like product specifications and information about item production. PIM goes further than MDM, including relevant content like images and video — as well as formatting all this information to fit various channels.
PIM Benefits
PIM doesn’t just collect and refine data, but it enriches and prepares it. By focusing on a smaller data pool, it can provide practical applications for the information, not only the information itself. PIM streamlines fewer processes than MDM, but it does so to a greater extent.
Because it deals only with product data, PIM is primarily a marketing tool. An SSOT over product details is especially handy for multi-channel marketing because it allows businesses to keep information consistent across different advertising campaigns. It also helps companies provide their partners with the same details for their products.
Since PIM includes content along with product data, it allows companies to release ads faster. That way, businesses can advertise new offerings as soon as they come out. Reducing the time it takes to reach a market helps these companies improve the efficacy of their ad campaigns.
What’s Right for Your Business?
PIM and MDM both offer considerable advantages for your business. There’s no clear-cut answer for which option is better because it depends on what your resources and end goals are. PIM and MDM are equally useful at meeting different objectives.
If improving your bottom line is what you want most, PIM is right for you. PIM is typically more cost-effective than MDM because it’s a more straightforward process. It also only offers you the tools you need for better marketing, so you won’t use any resources on data you don’t need.
If you want to improve data analytics across the board, you may want to consider MDM. This approach requires more resources, but if you have them, MDM can refine nearly all your business practices. If you want a broader view of your data as a whole, MDM is the way to go.
Implementing PIM and MDM
The effectiveness of PIM or MDM depends on how you execute them. Thoughtful data management plans work best when you form a team that focuses on handling them. Without a dedicated data management taskforce, you could face challenges getting all you can out of either PIM or MDM.
Both PIM and MDM rely on thorough data gathering to be their most helpful. You have to make sure you’re collecting enough relevant information before you begin to analyze it. This rule is especially central to MDM, which requires a far higher amount of data.
With MDM, you should include any stakeholders in your company data on data management decisions. Since MDM is such a far-reaching approach, it helps to make everyone involved aware of its process. Involving executives from different departments will also help you determine the best way to implement MDM.
If you’re opting to use PIM, you need to be as thorough as possible. Some of the resources you save by having a smaller focus can go toward gathering more data within the range of product information. PIM is most effective when you can offer it the deepest level of insight.
Data management, no matter the approach, can grow your company. If you gather enough relevant knowledge and involve the necessary parties, both PIM and MDM can lead to considerable improvement.
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