On-Premise vs. Cloud PIM: Which Deployment Option Suits Your Business?

On-Premise vs. Cloud PIM: Which Deployment Option Suits Your Business?
On-Premise vs. Cloud PIM: Which Deployment Option Suits Your Business?

Pranu Dhyani

Brands & Communications

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Ecommerce businesses, regardless of their size, have keenly observed the signals pointing towards the adoption of Product Information Management (PIM) software. This trend is not without merit, as PIM systems offer an array of advantages, including enhanced product information management efficiency, streamlined workflows, improved data quality, and faster time-to-market.

While a significant number of business leaders have already embraced PIM solutions in recent years, others are still in the process of considering their options. The decision-making process can be challenging, particularly when it comes to choosing between an on-premises PIM and a cloud-based PIM.

According to webinarcare report, for companies that have deployed PIM, the annual business improvement averages 25 percent. If you find yourself in this position, diligently seeking valuable insights before making a definitive choice, you're in the right place. In this article, we'll dissect the distinctions between these two options and assist you in determining the most suitable solution for your needs.

What Does On-Premise Deployment Mean?

On-premise deployment involves the storage of data on your organization's own servers, with the software being installed and managed internally. In this infrastructure, all software components reside on your hardware within your company's physical premises. This necessitates your organization's IT department to take full responsibility for maintaining and managing the entire infrastructure.

On-premise computing stands in contrast to cloud computing, where all databases, software applications, and networking resources are hosted off-site in cloud servers. The deployment requires a substantial initial capital investment to establish the necessary infrastructure, including suitable server hardware to accommodate the software and databases. 

What Does On-Cloud Deployment Mean?

On-cloud deployment, often referred to as cloud deployment, entails the hosting of software applications, data, and resources on remote servers that are maintained and operated by third-party cloud service providers. 

In this model, organizations do not need to manage their own physical servers or infrastructure; instead, they access and utilize computing resources over the internet. The model offers scalability, flexibility, and accessibility, enabling businesses to easily expand or contract their IT resources based on demand. 

It also allows for cost savings by eliminating the need for significant upfront investments in hardware and maintenance, making it an attractive option for many organizations looking to leverage the benefits of cloud computing.

Business GoalsOn-Premise PIMOn-Cloud PIM
CostChoosing on-premise PIM platform may be higher. The cumulative expenses of a Cloud solution can increase as time passes, especially when dealing with a large volume of products
SpeedImplementing this model can be time-consuming and labour-intensive process. This model streamlines deployment processes, ensuring swifter time-to-market.
ControlWith an on-premise PIM platform physically situated on-site, you can securely store and oversee product information, granting you greater control over your product information.The installation and maintenance responsibilities are primarily shouldered by the provider, leaving control largely in their hands. This means you have limited influence over versioning.
AccessibilityThis model stores data within your organization's servers, granting direct access to product information without dependence on internet connectivity.A cloud-based PIM solutions application offers unparalleled accessibility, allowing data retrieval from anywhere, at any time, if a secure internet connection is available.
ScalabilityAs businesses expand, on-premise PIM solutions might demand extra infrastructure investments. This becomes challenging for most business to scale. Cloud PIM solutions offer excellent scalability, making them suitable for businesses of varying sizes.
MaintenanceThis model is maintained and upgraded by in-house team, as a result there can be an increase in workload and cost of maintaining. This model is basically managed and upgraded by the service provider; thus, the maintenance cost can be minimal. 
SecurityOn-premise PIM solutions grant businesses full data control and offer enhanced security measures.Businesses need to trust their SaaS PIM platforms' security efforts.

Factors to Consider Before Selecting the Best PIM Solution for Your Business

You should first consider the needs and requirements of your specific business before deciding on On-Premise or Cloud PIM. An On-Premise PIM solution is the best choice if complete data control and customization are important.

Cloud-based solutions are a good option if you're looking for scalability and accessibility. They also offer future-proofing of technology.

In this exploration, we delve deeper into uncovering the factors to consider that will assist you in choosing the optimal PIM solution for your business:

1.    Know Your Business Requirements

Before implementing a Product Information Management (PIM) solution, businesses should conduct a thorough internal assessment. This analysis should focus on key factors such as desired features, performance expectations, cost considerations, and potential value enhancements. 

By doing so, businesses can gain a clearer understanding of the overall costs associated with PIM implementation, including tools and skillsets required. This assessment also helps them to identify any existing gaps in the organization's current capabilities and strategies.

2.    Pricing

On-premise solutions necessitate an initial upfront payment, along with additional expenses for future upgrades, while most cloud solutions follow a subscription-based model, typically billed on a monthly or annual basis (referred to as software-as-a-service or SaaS). Some SaaS tools may also charge per user, prompting businesses to evaluate their user access needs.

On the other hand, Cloud-based software offers a more accessible and cost-effective solution, particularly appealing to small and medium-sized businesses seeking a lower entry barrier and reduced financial risk. 

3.    Hosting Setup

Cloud-based solutions, hosted on the vendor's servers and accessible online, offer the advantage of accessibility from any location and device with an internet connection. This makes them particularly suitable for companies with multiple locations or remote teams that collaborate on projects.

On the other hand, on-premise solutions are typically licensed for a specific number of devices and hosted on a company's own servers. To effectively deploy and maintain this software, businesses need to invest in the necessary hardware and ensure they have the internal resources for ongoing maintenance. This setup is advantageous for businesses with dedicated server space and localized software requirements.

4.    Verify Model’s Abilities

Businesses must carefully examine the PIM capabilities to ensure that it can perform at the required level of quality and cost in order to meet their business objectives whether they choose on-premise or cloud. 

Another point is the use of PIM to improve operational effectiveness, service, automation and customer experiences. The performance of PIMs varies widely among providers. IT teams can evaluate software contracts by asking key questions about a business case that is specific to operational, regulatory or environmental risk, financial or any other level.

5.    Maintenance & Bug Fixing

Cloud-based solutions offer the advantage of automated updates and bug fixes, allowing businesses to streamline their internal IT resources for more strategic tasks. With routine maintenance handled by the cloud provider, organizations can focus on core business activities.

In contrast, on-premise solutions often require manual updates to address bugs, security vulnerabilities, and software enhancements, as they are hosted locally. These updates may entail additional expenses and necessitate internal IT support, which can be challenging for companies with limited staffing in their IT departments.

6.    Align Deployment Option with Your Business Strategy

The ability of a PIM deployment strategy to integrate with an enterprise IT strategy overall is one of the most important aspects. Businesses shouldn't attempt to solve all problems at once. It is better to focus on the PIM tasks necessary for the implementation and operationalization of the cloud strategy.

The success of the project also depends on the alignment between the departments and teams. IT leaders need to communicate with the stakeholders and staff who are implementing on-premise or cloud PIM and making better decisions to understand the business's high-level strategy and direction. This will increase the number users that adopt PIM solution and help businesses gain the trust of key stakeholders.

7.    Management of Product Information

Businesses can make a decision based on the information they receive after completing a comprehensive analysis of their requirements, comparing capabilities and costs. The next steps are determined by the business requirements, the costs and the alignment of the cloud PIM with those requirements.

The current model may occasionally work for one business. Others, however, may find it best to switch completely to cloud product management. This could be achieved by increasing investments or switching to a cloud-enabled, fully-integrated model. 

It is important to maximize performance in order to increase productivity, reduce costs, and improve customer satisfaction. Be aware of both the problems and possible solutions that surround on-premises PIM and cloud PIM.

No matter if a company chooses on-premise PIM software or cloud PIM services, it must examine all the features and capabilities to ensure that PIM can perform at the required level of quality service while meeting the business goals.

Some Common Questions You Must Ask Before PIM Deployment

Before implementing PIM deployment, there are certain questions that you need to ask yourself: 

•    How rapidly do you aim to achieve these goals?
•    What is the extent of storage capacity you require?
•    Do you manage a larger or smaller product catalog?
•    What are your current IT systems and available resources?
•    What is your budget allocation for this endeavor?
•    What is your long-term vision for your business?

The answers to these critical questions will be instrumental in guiding your choice of the most suitable PIM solution.

End Note

In the end, the selection of the appropriate PIM solution hinges on your data management strategy and your ultimate business objectives.

Regardless of whether you opt for an on-premise or cloud-based PIM, it's essential to conduct thorough testing of the PIM's capabilities to ensure seamless integration with your existing systems and the ability to meet your performance expectations.

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