How to calculate the ROI of a PIM system: The practical guide

Opting for a Product Information Management System (PIM) is a strategic investment. But how can the return on investment be calculated in practice? In this guide, we show you how to methodically determine the ROI of a PIM system and thus prove the profitability of your investment.

Why calculating the ROI is crucial for PIM projects

The ROI (return on investment) is the key figure for evaluating the economic success of a PIM implementation. Especially in SMEs, where budgets must be carefully planned, a well-founded ROI calculation is essential for decision-making at C-level level. A PIM system not only causes costs — it creates measurable added value by increasing efficiency, reducing errors and faster time-to-market. The challenge is to translate these effects into concrete figures.

The basic formula: How to calculate ROI

The ROI calculation follows a proven formula:

ROI (%) = ((benefits - costs)/costs) × 100

Or in more detail for PIM systems:

ROI (%) = ((Annual Savings + Additional Revenues - Total Costs)/Total Costs) × 100

A positive ROI shows that the investment is profitable. For example, an ROI of 150% means that you get back 1.50 euros for every euro invested.

Phase 1: Determine total costs (total cost of ownership)

Initial investment costs

• Licenses: One-time license fees or subscription costs for the first 12 months
• Implementation: Project costs for set-up, customizing and integration
• Migration: Costs of transferring existing product data
• Training: training costs for employees
• Hardware/infrastructure: If required (for on-premise solutions)

Current costs (yearly)

• Maintenance and Support: Annual maintenance contracts
• Licenses: Recurring license costs (for SaaS models)
• Updates: Costs for system updates and feature enhancements
• Internal resources: Your employees spend time managing PIM
• Hosting: For cloud solutions or server costs for on-premise

Practical example:

A medium-sized company invests 80,000€ initially (licenses, implementation, migration) and has annual costs of 25,000€ (licenses, support, internal resources).

Phase 2: Quantify benefits and savings

The harder part is quantifying the benefits. Focus on measurable factors:

Saving time through process optimization

Calculation:

• Record the current time required for product data maintenance (hours/week)
• Estimate the time saved by PIM (typical: 40-60% reduction)
• Multiply by personnel costs

example:

3 employees each spend 15 hours per week maintaining data manually (average cost 50 €/hour). With PIM, effort is reduced by 50%.
Annual saving = 3 × 15 × 50% × 50€ × 48 weeks = 162,000€

Error reduction and returns

Inconsistent or incorrect product data leads to returns, complaints and dissatisfaction.

Calculation:

• Determine the current return rate due to product information errors
• Calculate costs per return (logistics, processing, loss of value)
• Estimate expected reduction due to PIM (typical: 20-40%)

example:

200 retures/year due to data errors at a cost of 75€. 30% reduction.
Annual saving = 200 × 75€ × 30% = 4.500€

Faster time-to-market

Bringing new products to all channels faster means earlier sales.

Calculation:

• Current turnaround time from product information to publication
• Shortening due to PIM (typically: 30-50% faster)
• Sales potential per shortened day/week

example:

Time-to-market is reduced from 4 weeks to 2 weeks. With 50 new products per year with an average turnover of 500€ per week, this results in:
Additional revenue = 50 products × 2 weeks × 500€ = 50,000€

Improved data quality and conversion rate

Complete, consistent product information measurably increases the conversion rate in e-commerce.

Calculation:

• Current online revenue and conversion rate
• Expected increase through better product data (studies show: 20-40% possible)
• Calculate conservatively: 5-10% increase

example:

Online turnover 2 million €/year, conversion increases by 7%.
Additional revenue = €2,000,000 × 7% = 140,000€

Multi-channel efficiency

Savings through automated output to various channels (web shop, marketplaces, print catalogs, retailer portals).

Calculation:

• Time required for manual data preparation per channel
• number of channels
• Frequency of updates

example:

5 channels, 8 hours/month at 50 €/hour, 80% automation possible.
Annual saving = 5 × 8 × 12 × 50€ × 80% = 19,200€

Phase 3: Perform an ROI calculation

Let's take the example figures from above:

Total costs over 3 years:

• Initial investment: 80,000€
• Current costs (3 years): 3 × 25,000€ = 75,000€
• Total costs: 155,000€

Annual benefit:

• Time saved data maintenance: 162,000€
• Error reduction: 4,500€
• Faster time-to-market: 50,000€
• Conversion increase: 140,000€
• Multi-channel efficiency: 19,200€
• Total annual benefit: 375,700€

ROI calculation after 3 years:

Benefits over 3 years = 375,700€ × 3 = 1,127,100€
ROI = ((1,127,100€ - 155,000€)/155,000€) × 100 = 627%
Break-even: Reached after just 5 months (155,000€/375,700€ × 12)

Consider soft factors

Not all benefits can be precisely quantified, but they are still valuable:

• Customer satisfaction:
  Better product information leads to happier customers
• Brand image:
  Consistent, professional product presentation strengthens the brand
• Employee satisfaction:
  Less frustrating routine work, more time for value-adding activities
• scalability:
  ‍Ability to expand product range without a proportional increase in resources
• Compliance:
  Easier compliance with regulatory requirements

Practical tips for a realistic ROI calculation

1. Calculate conservatively

Use more conservative estimates. An ROI based on realistic assumptions is more credible than exaggerated forecasts.

2. Collect data

Document the current situation precisely:

• Time spent on product data maintenance
• Failure rates
• Process turnaround times
• Channel-specific expenses

3. Think in phases

The full benefits of a PIM system often only become apparent after the implementation phase. Plan for a ramping-up period of 6-12 months.

4. Involve stakeholders

Get input from various departments:

• Marketing: conversion effects, time to market
• Sales: customer feedback, acquisition potential
• IT: Technical efficiency gains
• Product management: saving time, reducing errors

5. Regularly measure

After the introduction, regularly check the actual effects achieved and adjust your calculations.

ROI calculation as a basis for decision-making

A well-founded ROI calculation is more than just a justification for the investment. It helps you:

• Prioritize: Which features bring the most benefit?
• Create realistic expectations: When does the investment pay off?
• Measuring success: Have you achieved the goals you set?
• Create buy-in: Impress management and stakeholders with facts

Avoid common mistakes

1. Just look at the license costs:
   The license is only part of the total cost. Consider implementation, migration, training, and ongoing operations.
2. Ignore indirect costs:
   Project time for your employees, change management and temporary productivity losses are real costs.
3. Assume unrealistic time savings:
   Saving 90% of time sounds good, but it's rarely realistic. Stick with 40-60% for credible calculations.
4. Underestimate the human factor:
   Technology alone does not yield ROI. Process optimization and user acceptance are crucial.

Conclusion: ROI as a strategic tool

Calculating the ROI of a PIM system is not a purely mathematical exercise. It is a strategic tool for making the added value of the investment transparent and making well-founded decisions. With a methodical approach, conservative assumptions and continuous performance measurement, you create a solid basis for your PIM investment. Most companies break even within 6-18 months — with a long-term ROI that often amounts to several hundred percent.

Next step:

Use this guide to create your individual ROI calculation. First, collect the relevant data from your company and start with the areas that promise the greatest measurable benefits.

Would you like to specifically calculate the ROI of a PIM system for your company? Contact us for an individual analysis of your potential.