Next Generation of Product Information Management Empowers Digital Business

Organizations in all industries face various difficulties in managing product information. The most serious is providing complete, engaging information to consumers and customers on the internet. Newly developed products, mergers and acquisitions, changes to pricing and promotions in online commerce spur business growth, but these factors also increase the amount and complexity of product-related data and content. In addition the digital economy offers a new generation of services that are sold by subscription and packaged in various options and price points. As well, global diversification of suppliers, customers and business partners forces organizations to manage data quality and consistency in multiple locations, currencies and languages.

Many organizations have successfullyVentanaResearch_NGPIM_BenchmarkResearch-250 implemented applications to manage manufacturing, the supply chain and other processes involved in building and shipping products, but ineffective information management hampers these processes and slows the pace at which organizations can introduce products. The rapid pace of bringing products into new channels and distributors, as well as seasonal dynamics, makes it harder to synchronize and update products in timely fashion throughout supply chains and to customer outlets.

Some organizations have attempted to address these challenges by building custom systems to integrate and distribute product information. Our previous research on product information management (PIM) found more than one-third (37%) of organizations using custom code and almost half (45%) using manual processes; both these approaches limit the adaptability and efficiency of product information management. Another complicating factor is the use of spreadsheets for PIM: One in three (34%) said they use them heavily, and almost half (46%) use them moderately. We think it is no coincidence that almost half (46%) of these organizations reported finding major errors in their product information. Thus it is not surprising that more than half (57%) said they plan to change the way they manage product information in 12 to 18 months. I have written about the current state of PIM software in a perspective on our upcoming Value Index, in which we are busy assessing the technology for 2016 and preparing guidance on vendor selection. To understand our unique methodology, please review our latest PIM Value Index.

Forward-looking organizations are deploying PIM processes and technologies to establish product information that is complete, relevant, dynamic and constantly available. They are using PIM systems to manage product relationships throughout the enterprise and improve business performance by automating cross-functional processes such as sourcing, new product introductions and electronic commerce. Using PIM technology, a company can put in place and then manage processes that make each line of business accountable for its product or item data and enforce common business practices and rules for conducting business and analyzing information. Conversely, we have found that other systems including ERP, PLM and e-commerce cannot support the full range of needs in PIM. Having a set of common definitions of product information across the organization promotes efficiency of business processes, which in turn can improve the customer experience.

Product information includes attributes and definitions specific to customers, suppliers and the enterprise. Like product-related master data management (MDM), PIM provides a way to automatically produce a complete, reliable view of all products without forcing every department and business unit to use the same application or format. For IT groups, it provides a way to ensure accuracy and consistency of data across the organization and to give all departments confidence in the reliability of the data they create, receive from and pass to other business units. But unlike product MDM, as I have written, product information management is about managing the “information supply chain,” which includes capture, assimilation, synchronization and publication. In capture and assimilation, PIM seeks to assemble complete, standardized product information from many sources (such as global data synchronization, manufacturers or content feeds). Through publication, PIM seeks to optimize information structures and content based on the downstream usage requirements of, for example, websites, catalog systems and e-commerce services.

Growing competition in online channels puts pressure on organizations to synchronize updates to product information across all channels and make it available directly for commerce and websites so that all sources agree and no information is released inadvertently (which, for example, might give competitors advance notice of product introductions, new pricing or other strategic changes). In addition, organizations that must track thousands or even millions of products or stock-keeping units (SKUs) need to reduce the burden of managing all this product information. Some are implementing new cloud-based interchanges; others are using industry standards like GDSN and GS1, and data transformation services to replace systems and routines based on older, more proprietary standards and manual code. Others are implementing MDM to improve integration of cross-functional and external information. In these ways, organizations can increase their flexibility to make changes as needed throughout the information supply chain.

To be able to provide consistent, accurate and actionable product information for consumers, customers and partners as well as throughout the supply chain, organizations must optimize the processes they use to develop and disseminate product information. Today’s businesses must manage a continually expanding variety of content and data as well as the expectations of audiences demanding comprehensive product information with a few clicks. Addressing these challenges requires unified processes and automated systems. However, our previous benchmark research on PIM found that many organizations are not up to these tasks. Fewer than one-fifth of them are innovative in their use of product information, while the large majority have plenty of room for improvement. Many organizations assign the core responsibility for PIM to the marketing function, which has its own set of challenges to deal with, as I have pointed out.

Managing product information can be difficult when industries, companies and even individuals within them use different names and attributes for the same things. Disparities often exist across departments with different orientations, including marketing, sales, commerce, the supply chain and finance. Additionally, organizations regularly add suppliers to their business networks and increase the number and variety of products they offer. Furthermore, many customers expect to be able to access product information on their mobile devices, and e-commerce introduces complexities in unifying information to invoke a purchase or recommendation. Also, product content now includes images and video linked to social ratings and comments. For all these reasons selling products and services, from business to business or to customers, requires a solid base of product information management, which I outlined in thoughts on supercharging sales and commerce.

These advances not only bring additional data into the organizations’ information systems, they often introduce new inconsistencies in how products and attributes are combined. Yet competitive pressures require that the information presented is not only up-to-date and accurate but engaging in its presentation. Organizations also need systems that enable operational processes to run uninterrupted and make timely data available for analysis and guidance in decision-making. PIM affects all lines of business and thus should be a shared responsibility across the front office and others responsible for the creation and maintenance of products and services. This means that PIM must interface to or support collaboration and workflow systems to ensure that the tasks and oversight engage all responsible individuals in the organization.

In light of these issues, it is not surprising that in our previous research the most important evaluation criterion for PIM software is adaptability, which almost half (49%) of organizations said is very important. Only one-fifth of organizations in that research said they are very satisfied with their current efforts in managing product information. To address these concerns, mature organizations embrace product processes that use PIM software to manage content and data about products, items or materials across the enterprise and for supplier networks and business-to-business (B2B) exchanges. PIM applications and tools are designed to produce and enable access to complete and reliable product records. If properly deployed, PIM systems can synchronize all the attributes and definitions used in the identification, description, marketing, sales, commerce and fulfillment of products across all channels that customers, suppliers, trading partners and employees use.

PIM can provide competitive business advantages by helping organizations address these information management issues:

  • Inconsistent product definitions in product content and data, which many organizations find difficult to improve
  • Limited feedback from customers on product information and its relevance to their purchase and use
  • Insufficient control of the flow of product information due to use of multiple applications, file systems, spreadsheets and systems dedicated to only portions of the data
  • Lack of integrated information to perform operational processes, execute workflows and provide automated data services
  • Scattered information sources for analytics and business intelligence (BI) for financial and operational analysis, in which data is incomplete, inconsistent and out of date.

In our previous research little more than one-quarter (28 percent) of organizations reported that they manage PIM as part of master data management, an approach that can help improve the consistency and quality of an organization’s data. PIM and MDM projects typically include use of tools for data discovery, profiling and quality to deepen understanding of the data, including relationships and associations between data items. Most organizations have not integrated PIM into their overall business processes to optimize use of the information, but two in five or more of those that have implemented a dedicated approach to PIM reported gaining benefits such as eliminating errors and mistakes (47%), improving cross-sell and up-sell opportunities (44%) and improving the customer experience (41%).

Against this background, Ventana Research will undertake new benchmark research to determine awareness and adoption of a new generation of product information management software that enables business and customer-focused processes that meet today’s challenges. The new research will explore organizations’ experiences with deployment of PIM systems and issues they have faced in efforts to align business and IT resources and spending with organizational information management objectives. It will examine how many organizations are operating PIM in cloud computing environments or are considering it. The research also will examine the importance of presenting such digital assets effectively on mobile devices. Those efforts often require integration of supplier and customer information, increased use of online channels and synchronization of updates to product information that may be spread across global markets.

The new research will investigate the market vr_productinfomanagement_technology_trends_for_pim_improvement_updatedperformance and maturity of organizations’ implementations of PIM and their use of or intentions for new technologies in mobility, cloud computing, collaboration, big data and interaction across social media. Our previous research found analytics, big data and mobility to be the top three technology trends for PIM improvement, and we will determine if these remain the priorities. The new research will examine how and to what extent organizations have addressed the people, process, information and technology aspects of improving data quality, integration and consistency, enabling B2B and supplier integration through online channels and service orientation, providing a single view of products, materials and attributes for business intelligence and analytics, and establishing a central resource for better control and security of product information.

Please take the survey now and let us know what your organization needs from product information management. We look forward to sharing the results of this research on an issue of primary importance for all businesses.


Mark Smith

CEO and Chief Research Officer

Mr. President and Department of Labor: Move Aside; Let Employees Work and Learn

Through a federal rule referred to as “Overtime Rule” and part of Title 29 regulations was issued on May 18th, 2016 by the Department of Labor (DOL), the Obama administration now mandates that unless they meet criteria for exemption, employees paid less than $47,476 ($22.825 per hour) are entitled to overtime pay when they work more than 40 hours per week. The rule change, which goes into effective on December 1, 2016, is intended to apply to executive, administrative and professional employees; it has exemptions for teachers, lawyers and other specific jobs and industries.

The new limit, which is detailed in a DOL summary and further described in a distributable document and a set of frequently asked questions (FAQ), is a 100.7 percent increase over the previous overtime trigger salary level of $23,660 ($11.375 per hour), set in 2004. According to the administration the new rule affects 4.23 million workers (which by the way at this writing references  “white college workers” rather than “white collar workers”) among an estimated 8.9 million overtime-eligible salaried employees in the U.S. According to the DOL, 17.5 percent of the newly eligible workers are over 55 years of age, 21.2 percent  from 45 to 54, 22.4 percent  from 35 to 44, 31.3 percent  from 25 to 34 and 7.4 percent  under the age of 25. The new rule also establishes an automatic update every three years to the maximum qualifying salary. The rule permits up to 10 percent of the salary to come from nondiscretionary bonuses, incentives and commissions or through an end-of-quarter catchup payment.

The new rule is part of a set of regulations that specify how the minimum wage and overtime pay protections of the Fair Labor Standards Act (FSLA) are to be administered. Originally intended to eliminate potential sweatshops that resulted from the great depression are part of protections for “white collar” workers. President Obama embraced this agenda when he signed his directive in 2014. But the president’s good intentions can have side effects – in this case, the increase could limit options entry-level workers, whether college graduates or those heading into a new career path, who might want to invest time learning beyond standard training to better their value to the organization. In fact, it even could limit those who work in human resources who seek to be able to spend extra time understanding this DOL legislation and its impact – they could find themselves in an overtime situation despite the fact that it is an opportunity to better their skills to the benefit of their organization. Spending more time to learn skills for a white collar position should not be prohibited but encouraged.

Let me make this more personal. I began my career 28 years ago by relocating to a major metropolitan area to take a technical operations position at a significantly low salary. I accepted the salaried position knowing that I would barely be able to maintain a living because the opportunity was more than worth it, enabling me to break into a company so I could establish the experience and skills not available anywhere else. I was not a college graduate, did not have specialized or advanced knowledge but was willing to apply myself – to use my place of work as a place of education to the benefit of both the organization and myself. Over a number of years I was a hard and dedicated worker, sacrificing a personal life to work 50 to 60 hours per week so that I could advance my job level and salary. Under this new rule the company could easily have been in violation of DOL regulations, and the employer probably would have required that employees not work more than 40 hours.

Three decades later, how much has changed for a broad range of private-sector white collar employees who might not have either a college education or skills in the industry they want to work in? They may well be trying to restart their career but now will not be able to spend time at work at or related to the job that could be construed as overtime. The new rule will force employers to establish new employee handbook guidelines and agreements that direct employees and maybe not just the non-exempt ones not to work more than 40 hours or be in violation of employment rules and subject to termination. And employees trying to show a commitment to advance their potential in a range of white collar positions may well find themselves facing the proposition of being dealt with as an hourly employee with what I would define as a transaction level relationship with the company.

The Department of Labor suggests that to accommodate the new regulations businesses of all sizes can raise salaries to maintain the overtime exemption, pay overtime beyond 40 hours, reorganize workloads, adjust schedules or spread work hours – or, of course, adjust wages. The last recommendation in practice means the employer, to compensate for extra time worked beyond a 40 hour work week, might well have to have a difficult conversation with its employee to induce him or her to accept a lower salary plus overtime pay. With no exemption for size or location of business, this new rule will mean that considerably more time will be spent, unproductively from the company’s point of view, renegotiate its employer-employee relationship.

The DOL states it will not be difficult for employers to track workers’ hours as “employer already has systems and policies in place for dealing with overtime eligible employees so the rule isn’t introducing any new obligations for employers or requirement them to adopt new systems.” Well, the DOL does not realize that many organizations will not have had employees making less than the previous salary threshold but do now under the new level. Moreover, in many cases they were not paying attention to the exemptions because in a small and medium sized business the time required and cost of paying attention to every regulation is prohibitive. For employers, it now becomes a smart move to assess the use of software that employees use to track their hours daily so that managers and management have direct, centralized visibility to time worked. If your organization already uses workforce management software to track hourly workers, it might be able to be used for time worked by salaried employees. In addition, a new generation or human resources management systems (HRMS) have begun to add ability to track time worked by day and projects. Doing what the DOL appears to be recommending – leaving it to employees to track – is a recipe for disaster. Employers and managers should not leave any potential issues or violations in the hands of employees who may or may not track diligently every day. The government in this case has increased the cost of business by inserting the need for business to acquire and deploy software to support tracking hours.

Employers can also examine moving to the use of contingent workers, shifting the responsibility to a third party to deal with the compliance. These contingent labor organizations already have the processes and software to ensure compliance to regulations. A significant number of larger corporations already do this today to eliminate the burdens of hiring and maintaining a workforce. This is in addition to looking at using part-time employees who might work only 32 hours or less and do not fall into other regulatory requirements that increase the cost to a business.

The federal government should also have recognized the geographic diversity of businesses, with many located in areas where the cost of living is less than half what it might be in a metropolitan area. If you read the regulations, it is clear that some areas negotiated exceptions – American Samoa, for example, which has a lower standard test at 84 percent of the $47,476 salary. While exemptions on type of workers like outside sales, computer-related occupations, field of science and learning. Also, there’s a “learned professional exemption” where the “Customarily Acquired by a Prolonged Course of Specialized Instruction” could be the loophole for a large class of employees who can cite some level of related instruction or a degree that’s close enough to the content of their job.

The regulations provide a significant number of exemptions to the overtime rule in executive, administrative and professional areas that include some educators, those in law or medicine and outside sales, computer employees and highly compensated employees. Employers should make sure they are fully examining the available exemptions, even in situations where salaries are above the new threshold at $47,476. Interestingly, the legal and medicine fields are exempt from the salary tests for compliance; why did entry-level lawyers get an exemption? Or those that work to help take care of humans? I could be cynical and say they had great lobbyists. To me, one of the saddest parts of the legislation is where bona fide teachers are exempt where they actually should have salary increases. But the biggest question the regulations raise is why does the overtime rule not apply to these industries?

Should the salary range that triggers overtime have been increased? Yes. But this doubling of the salary level came with little notification to enables businesses to adjust through policies, processes and potential systems; now the regulations will go into effect on Dec. 1, 2016. The DOL did provide notification in July 2015 on the potential changes, so if you were keeping track of the details – which I can guarantee the majority of businesses weren’t doing – you know what’s coming. But since the government lacks any technological sophistication in business registration and notification, it’s not until now that business leaders including CEO, COO, CFO and head of human resources are learning of this and starting to take action. Of course those in larger corporations that have dedicated resources and retained labor lawyers are probably on top of the changes and implementing changes. Remember, though, that the number of small to medium-sized businesses far outnumber the larger ones that typically have more a $1billion in revenue and the DOL did just publish a specific guide to help these smaller-sized organizations.

The federally mandated minimum wage in the United States is $7.25 per hour. It should increase, and many states are already advancing it. In the face of these changes, businesses will have to make some difficult decisions on their ability to operate at current levels and determine the path forward to address increased payroll. Most organizations have budgets and this new regulation will have a direct impact on the budget in the calendar fourth quarter. Clearly, discussion involving at least the CFO and head of human resources will have to happen to develop a plan and determine a course of action. Organizations will need to review job levels and salaries as part of compensation planning to see if they should raise them to the federally mandated minimum to minimize the impact to any issues on the exemptions and requirement to track hours. Many HR organizations might also need to determine if their HRMS is effective at tracking hours worked and compensation processes as our latest human resources research found is one of the top uses of a HRMS and is one of the key factors motivating organizations to change technology providers. There will need to be updates to the employee handbook on overtime, communications to managers and inevitably new agreements or statements to salaried workers within this pay bracket.

Employers should seek labor-related legal counsel to ensure they have assessed their workforce and the situation with respect to exemptions and have plans to mitigate risk. As the new regulation goes into effect some employees may find themselves with a salary increase for the holiday season, or they may find themselves being informed they are no longer able to work extra hours related to their job to improve their career or performance. Some may find their salary reduced to incorporate overtime or may be asked to go to an hourly rate.

While I would agree it is appropriate and necessary for the DOL to establish a salary framework that keeps employers from creating sweatshops and working their employees too extensively, this doubling of the salary level appears to me to be excessive. Employees are always free to decide that they should find a new place of employment, but in this instance the government has taken an action that will force businesses to expend time, resources and money to ensure they stay in compliance. This regulation will impact employers whether they decide to hire college graduates only part-time or as hourly employees at compliant levels or skip them entirely and look for workers with more experience. College graduates are not well prepared by universities or colleges in their degree related to a job opportunity they are applying for in the private sector will require significant training that is not offered by the employer. For those college graduates applying for a job position not related to their degree will need even more training and a larger desire to learn about the position that in both examples will not be possible after December 1st.

The DOL has published its overview of the Overtime rule which portrays the new rule in a positive light: It puts more money into the pockets of many middle class workers or gives them more free time, prevents a future erosion of overtime protections and ensures greater predictability, strengthens overtime protections for salaried workers already entitled to overtime and provides greater clarity and security for workers and employers, improves work-life balance, increases employment by spreading work, improves worker health and increases productivity. All of this may well prove to be true. But all of it could be driven by choices employees make when they take a position and determine the employer they want to work for, rather than constraining employees who want to focus on their career and work hard at their employer.

It is clear that President Obama and Department of Labor have no real understanding of the impact of this change and how it will alter the dynamic of employer-employee relations and impact the employee’s right to work hard, learn more about his or her profession on the job and thus have the opportunity to move up and advance his or her career. If the president and DOL think that employers are going to pay overtime to support an employee’s desire to further training beyond existing ones offered, they are really disconnected from the way business operates. The federal government has now tied the hands of employers and instead created overhead for the private sector. This action is eliminating opportunity at a time where any aging individual who needs to retrain to switch careers will not be able to do so unless employers increase their budget for the workforce. Of course, the money for this will have to come from steps such as increasing margins on products and services that which translate to increased prices that the public may or not choose to pay, reduced benefits to employees like health insurance coverage, increased time off, matching 401k and continuing educational reimbursement, or reducing operational expenses or growth through eliminating new positions and employees.

While the president and DOL view this updated regulation as protection of employees and an expression of the president’s commitment to fair compensation for hard work, in my opinion it is a move that could have the opposite effect. Disrupting the private sector and forcing business to reassess its workforces, salaries and overtime patterns at a time when the focus should be on growth and new hires is really a bad step. Not everyone wants to be forced only work 40 hours on salary and should not be constrained by a federal regulation that forces employers to prevent it from happening.

Mr. President and Department of Labor, after working in small, medium, large and very large business in the private sector from entry-level to executive positions, after having hired or been responsible for hiring hundreds of people, and after starting and leading a small business as CEO over the last 13 years, I have a little more experience on this matter than those who developed the position you and your departments have taken. This action will change the dynamics of the workplace for the worse and have stepped on the potential opportunities of millions of Americans, from college graduates to those who are being forced to transition from trades that are no longer able to provide jobs in this country due to globalization. The view that this new regulation communicates of employers, generalizing that we are not treating our employees properly with fair salaries and so the government needs to wield a stick that is these regulations is incorrect. If you ever want a dose of reality on business and the private sector, let me know; I am more than able to provide some opinion and perspective.


Mark Smith

CEO and Chief Research Officer