By Dave Wargo, Partner Columbus Consulting
Upgrading your legacy or home-grown ERP system is a major step toward modernizing your business operations. You will be embarking on a companywide initiative to define future-state requirements, assess optimal integrations, complete solution demonstrations, make a solution selection, and prepare for your implementation journey. However, a crucial question remains:
Is your data ready for migration, and can it be effectively managed within your new ERP system?
Throughout your requirements gathering, it’s critical to evaluate the data management capabilities of your ERP candidates, including master data management, data workflow and governance, data ingestion, data matching and merging, data modeling, data quality, data reporting, data security, data syndication, data versioning, and AI-enabled data automation. Without reliable and clean data, your ERP cannot function optimally. Additionally, as a sizable portion of BI and analytics will derive from ERP output, poorly managed data can put downstream insights at risk.
Does Your ERP Have Sufficient Data Management Capabilities?
To determine if your future ERP can adequately manage and govern your data, first consider the tools that manage data within an ERP or stand-alone outside the ERP.
Core Functions of Each System
- The core ERP (Enterprise Resource Planning): Primarily manages retail business processes, including finance, supply chain, and inventory management.
- Data Management solutions
- PIM (Product Information Management): Focuses on managing and enriching product data, ensuring consistency across sales channels.
- MDM (Master Data Management): Provides a comprehensive approach to managing multiple domains of data, ensuring consistency across the entire organization.
Next, assess the options for a standalone ERP or joint ERP and Data Management solution approach
Evaluating an ERP-Only Approach in Data Management
To ensure your ERP meets your data management needs, define robust requirements, ask key questions, and request demonstrations from vendors. Inquire about their experience in managing data not just housing it, as well as integrating with PIM or MDM solutions.
Two key questions to ask are – how data is extracted from the ERP and whether the ERP data is readily compatible with the PIM or MDM solution. Understanding these details ensures that the proper project plan is built.
Most ERP solutions lack robust data management workflows, governance, and tracking capabilities. Product content updates—such as descriptions, attributes, and images—are often manual and inefficient. Additionally, ERPs are generally not designed for handling enriched product content management, omnichannel marketing needs, or digital asset management. Also, they typically do not support data profiling, quality monitoring, or remediation activities, which are critical for maintaining reliable data. If your ERP has strong built-in data management capabilities, it may suffice; otherwise, evaluating a PIM or MDM solution is a worthwhile investment.
Considering a Joint ERP and Data Management Solution
A structured evaluation of PIM or MDM solutions should follow a similar process to ERP selection, including requirements gathering, demonstrations, and a cost-benefit analysis.
Key Benefits of a PIM or MDM
Be sure to assess Operational Benefits:
- Data Accuracy & Consistency – Ensures clean, structured product data
- Operational Efficiency – Reduces manual data entry and redundancies
- Data Workflows, Governance, and Triggers – Enhances data control and compliance
- Data Profiling & Error Detection – Identifies and corrects data errors and anomalies
…and Customer & Business Partner Benefits:
- Improved Customer Experience – Enhances product content for better conversion
- Faster Time to Market – Enables quicker product launches
- Omnichannel Readiness – Supports eCommerce, POS, and Marketplaces
- Regulatory Compliance – Ensures accurate documentation and safety information
While defining a perfect ROI may be challenging, retailers should focus on critical improvement areas where reliable data is essential.
Making your Decision
Your decision involves two key steps:
- Do I need a Data Management Solution to support my ERP implementation?
- Should I choose a PIM for product data or an MDM for multi-domain data management?
Opt for an ERP-only approach if your data model is straightforward and the ERP meets your core data management needs. Define your own business rules for execution in the ERP solution. Key configurations or customization are likely. Incorporate a PIM or MDM when dealing with extensive product catalogs, complex data models, multiple instances of similar data sources (e.g., different business entities), or diverse syndication requirements. This solution requires more time upfront, but it provides your business with more data management options in the future.
PIM vs. MDM
If you have made the decision to implement a PIM or MDM, evaluate your needs.
Common features of a PIM and MDM:
- Support a single source of product data – a ‘golden record’
- Standard data model taxonomy and attribute management
- Data ingestion and integrations
- Data enrichment
- Support data cleansing, accuracy, and consistency
- Support structured data workflows, rules, and approvals
- Syndicate data to outbound systems/platforms
Key Differentiators:
- MDMs support data domain consistency beyond product (e.g., vendor, location)
- MDMs can manage data relationships across data domains
- MDMs are focused more on data in business systems (ERP, WMS, etc.)
- MDMs will have broader internal integrations based on a multi-domain approach
- MDMs require broader data stewardship with complementary approval processes
- MDM’s leverage AI and automation for data rules enforcement, workflow management and alerting.
- PIM enrichment focus is heavier on product content with marketing content /images
- PIMs syndicate across internal and external solutions and platforms with a focus on outward-facing data
- PIMs leverage AI & Automation for taxonomy completion, attribution tagging, and parent/child matching
Additional Considerations
If you have determined whether a PIM or MDM is necessary, consider:
- Data Ownership:
- Who will oversee data governance from both IT and business perspectives?
- How robust must the governance structure be to support the new solution?
- Company Support:
- Will your organization embrace “data as an asset” culture?
- What cultural and organizational changes are required for successful adoption?
- Implementation Complexity:
- What challenges will arise when integrating upstream and downstream solutions?
- What level of effort is required to cleanse and structure data during migration?
Final Thoughts
With over 35 years in retail and a decade specializing in data management, I have seen product data requirements evolve from simple two-level hierarchies to intricate six-level structures, alternate hierarchies, and with 100+ attributes per SKU. Modern and future data needs require a dedicated data management discipline and solution.
While I advocate for a joint ERP and Data Management Solution, I encourage you to carefully evaluate your needs, costs, and implementation efforts before making your decision. The right approach will empower your organization with clean, structured, and reliable data—setting the foundation for long-term success.
Learn more about Columbus Consulting’s data and analytics services: https://www.columbusconsulting.com/service-spotlight-data-analytics/
ABOUT DAVE WARGO
DAVE WARGO is an partner at Columbus Consulting. He is a data-led functional architect, bridging the gap between business and technology to empower data as an asset. He applies tactical retail use-case driven approaches to create processes, standards, and disciplines to enable AL/ML and harden analytics, insights, operations, and optimal customer experiences. Dave is experienced in luxury, quick service restaurants, core retail, convenience, and curated museum merchandising. He has held both retail leadership and consulting delivery roles in data standardization, process overhaul and improvement, retail change implementation, product development, product assortment planning, brand planning, demand planning, and buying.
ABOUT COLUMBUS CONSULTING
Columbus Consulting delivers solutions that drive true value and have been transforming the retail, grocery and CPG industries for over two decades. We are a retail consulting company of industry experts. Our approach is simple, if you do it, we do it. We are more than consultants; we are experienced practitioners who actually sat in our clients’ seats. We understand the challenges, know what questions to ask and deliver the right solutions. Columbus offers a unique, consumer-centric approach with an end-to-end perspective that bridges functional & organization silos from strategy to execution. Our specialties include: unified commerce, merchandising & category management, planning & inventory management, sourcing & supply chain, data & analytics, accounting, finance & operations, people & organization and information technology. Let us know how we can help you. To learn more, visit COLUMBUSCONSULTING.COM.