Introduction

Are you in the process of choosing a suitable Product Information Management System (PIM) for your company? Of course, cost is a major factor in making the right decision. In this article we describe the costs involved in the implementation of a PIM system and bring to light what some popular PIM systems cost.

The fact is that very few PIM providers reveal what their solution will cost on their websites. Most PIM providers simply don’t offer cost transparency. Companies rarely acquire new software, so many decision-makers may lack experience in determining the full costs and uncovering all hidden cost blocks. This article aims to help.

The costs incurred when introducing PIM can be divided into 2 large cost blocks:

• one-time costs

  • conception costs
  • evaluation costs
  • setup costs
  • costs for acquiring the licenses
  • Implementation costs

• ongoing costs

  • license costs
  • hosting costs
  • maintenance and support costs
  • further development costs.

One-time costs

One-time costs arise only once. The main cost blocks are the implementation costs and license acquisition costs.

There are over 100 PIM providers, and choosing the right one is not always an easy task. Often the PIM consultants are brought on board to help select a suitable PIM system and/or the service provider who will implement this PIM system. The costs for PIM consultants alone can quickly reach EUR 10,000.

Conception costs

In the pre-project phase you have to decide what you want to achieve with the PIM system, which problems need solving and which business processes must be optimized. You’ll have to complete the following tasks in this phase:

• Determine who the PIM users are – who should use the system in the future.
• Determine the scope of data – which data should be managed in the system.
• Determine business processes – what should the system be used for.
• Determine technological framework conditions – which technologies do you require, should it be a SaaS, open-source or on-premise solution?

You’ll only incur costs for concept creation if an external PIM consultant is involved. This is not obligatory and users should decide whether they need a consultant or not.

Workshops are often held on this subject. The cost of a 2-day workshop usually starts at EUR 2,000.

Evaluation costs

It is essential that you select the right providers. Draw up a shortlist. Prepare a catalog of questions for the conception phase. All providers on the shortlist must then complete the questionnaire and return it. Evaluate the answers and then invite the best 2-4 providers to a personal presentation of their solution.

This phase is also often led by PIM consultants and can, therefore, lead to costs. An evaluation will typically cost anything from EUR 4,000, because a PIM consultant is usually present at all presentations to evaluate more precisely specific system requirements and to form a professional opinion.

Setup costs

Setup costs are the costs for the initial installation of the system. These can vary greatly from one provider to the next. The costs for configuring the system may also fall under setup costs.

License costs

The costs for licenses may happen either once or continuously. There are two types of licenses:

• Rental licenses – allow you to use the software only for a certain period of time.
• Purchase licenses – allow you to use the software permanently.

The cost of purchasing licenses is incurred just once. If you acquire rental licenses you will pay a regular monthly or annual fee.

One should note, however, that the purchased licenses do not automatically include the right to software updates and upgrades and may restrict them. Sometimes the updates and upgrades are only granted if the user concludes a maintenance and support contract. You should, therefore, investigate very carefully which software licenses are involved and how the updates and upgrades are handled.

The license costs can depend on the following factors:

• Number of users
• Number of SKUs
• Number of supported languages
• Number of required software modules
• Number of output channels

Implementation costs

The costs for implementing the selected PIM software often forms the largest cost block. The effort depends very much on the individual requirements of the user, especially for e-commerce, the requirements for integration with online shops and marketplaces can generate a significant cost pool. The following cost drivers are typical:

• complexity and scope of product information
• degree of automation of business processes
• number of systems to be integrated
• number and uniformity of data sources
• number of channels to be connected.

The costs will be incurred here for:

• establishment of the roles in the system
• data migration from existing systems
• integration with other systems – e.g. ERP, marketplaces, online shops
• setup / programming of workflows
• adaptation of existing features
• programming of the new functionalities
• employee training
• system launch.

You should make an effort to estimate these costs as precisely as possible in advance . Constantly monitor the costs to stay on track. If there are no special requirements, the providers who offer standard PIM software may prove to be the cheapest.

Even if open source solutions are free, they also incur implementation costs. If the wrong solution is chosen, the cost of implementing that solution may outweigh the cost of acquiring licenses and introducing some other solution.

Ongoing costs

Ongoing costs are regularly incurred. These costs vary widely between providers and you should, therefore, never underestimate them.

License costs

The costs for rental licenses or updating the purchase licenses so that you can get software updates and upgrades are incurred regularly and can vary greatly. Take into account that certain software modules are often licensed and paid for separately.

Maintenance and support costs

Software does not work on its own over the long term. It must be maintained. Nobody can do this better than the software provider himself. After the implementation phase, you should conclude a maintenance and support contract with the provider or one of his partners. Often there is even an obligation to do so according to the license conditions. The prices for this can depend very much on the following factors:

• how quickly you react
• how many support hours you require per month
• whether developer support is necessary
• which communication channels are available
• whether you want a permanent contact person
• which service levels must be adhered to.

Usually the costs for maintenance and support are related to the license costs.

Further Development Costs

No matter how good the conception of your PIM solution, it should be further developed because the way you use the software will change over time. Certain functions will be adapted, others will be added. The further development is often billed at the usual daily rates. A functionality can take one working day in one piece of software, five in another. You should, therefore, choose software that is flexible and easy to customize.

Hosting costs

All PIM software has to be hosted somewhere. It can be installed in your own data center, on rented server infrastructure or in a private or public cloud. The cost of hosting will also depend on this decision. There are also different requirements for PIM software that must be taken into account. If a single server is often sufficient for web-based solutions, enterprise on-premise solutions may need several servers to run.

What exactly do the PIM solutions cost?

There are very few PIM providers who publicly publish the prices for their own solutions on their websites. In part, it's related to the amount of competition. If prices are not publicly available, there is leeway for price negotiations.

Table 2. Cost of popular PIM systems.

Final thoughts

To get a good feeling about the cost of a PIM system, you should add up the costs for a longer period, e.g. for 3 or 5 years, because the system becomes a continuous cost driver. You should then compare these costs for the favored PIM systems.

You can also develop your own PIM solution, but the generally high complexity of a PIM solution, means that the costs for this may be high. This will only pay off if you need a very specific solution and no existing PIM solution meets your requirements. A really good alternative, in this case, would be to take an open source PIM system and adapt it to your specific needs.