Understanding Internal and External Costs

Summary:

As companies very rarely deal with the introduction of PIM systems, it can be quite difficult for them to estimate the effort involved. In this article, we’ll briefly explain the internal costs to be expected when introducing PIM.

In Detail

Definition of Requirements

The first step is to gather internal requirements, identify opportunities for improvement, document existing problems, and involve relevant stakeholders. This requires sufficient time to ensure that a complete and consolidated picture of the requirements is available. Depending on the size of the company, an expense of around 10 days should be planned for this.

Workshop and Conceptualization

At least three, but no more than five employees should take part in the workshop to ensure efficiency. If there is broader interest, the participants should present the results outside the workshops and gather information. The cost for workshops corresponds to about 10 percent of the implementation expense. For a project volume of 100 days, an internal expense of 30 working days can be expected. Including preparation and follow-up work as well as the delivery of requirements, cost can increase to 40 to 50 days.

Test & Approval

The amount of testing in PIM projects has decreased in recent years, as the amount of development has fallen and the customer is often involved in setting up the system. The test intensity for interfaces remains the same. Today, it is assumed that around 5-10 percent of the implementation cost is spent on internal testing, i.e., between 5 and 10 days for a 100-day implementation.

Migration & Data Quality

The migration of legacy data is the biggest internal expense that is difficult to estimate. A 1:1 data migration reduces the cost, but the data quality and structure is often insufficient. Data adjustment after import into the old structure is rare, so the best opportunity is before setting up a new PIM system.

Interfaces

The expense of interfaces depends on the number and complexity of the data transfer. Customers with technical expertise can set up interfaces themselves or have them implemented by the implementation service provider. When connecting an ERP system in which only the article master data is transferred, a minimum expense of 5 days can be expected. If additional data is included, the time required can increase to 15 to 20 days. For inexperienced implementers, the time required can be 0.5 to 1.0x longer.

Configuration

With PIM systems, it is common for the customer to get involved in the implementation. The internal expense for this is often between 25 and 50 percent of the external implementation expense.

Go Live

The budget required for Go Live depends on the number of user groups and users that need to be trained. For small projects, the training cost is low, and for large international projects, it is not necessarily disproportionately higher. As a general rule, you can assume 10 percent of the external implementation expense.

Project Management

For projects with 100 days of external expense, one should assume 10 to 15 percent project management in cost and 15 to 20 percent for larger projects.

GOT QUESTIONS? FEEL FREE TO ASK!

Each company has unique requirements, prerequisites, and data, which is why every PIM project must be approached individually. On behalf of Y1, I can offer you a customized solution and personally advise you. Get in touch by arranging an initial consultation.

Marc Kulow berät zu PIM-Lösungen, egal ob PIM-Integration, PIM-Upgrade oder allgemeines PIM-Projektmanagement.