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December 5, 2012

BI and CPM: Reconciling Convergence

By Stefanie Hoffman

All too often the terms business intelligence (BI) and corporate performance management (CPM) are used interchangeably – and, at first take, there seems to be very little difference. BI and CPM vendors rely on the same clouds and infrastructure. There’s a lot of overlap between the solutions: BI can be used to define and analyze performance metrics, while performance management can be a feature in overarching BI solutions.

Gartner defines BI as the applications, infrastructure, platforms, tools and best practices that enable access to and analysis of information to optimize decisions and manage performance.

However, there are differences. According to TechTarget, BI has evolved to mean the technology used to access, analyze, log, process and report on data relevant to enterprises. It leverages a wide array of software once offered as standalone solutions, but now incorporated under the umbrella of BI suites. CPM, on the other hand, is more than about technology or a solution, TechTarget says. It incorporates aspects such as processes, strategies and metrics to measure, monitor and manage multiple components of a business. In short, BI processes and combs through raw data. CPM leverages that information.

Another distinction: Organizations tend to implement CPM to determine financial metrics, such as budgeting and forecasting, though it can be applied to sales, marketing and customer support.

Distinguishing BI and CPM is only a first step. From there, Gartner says, its incumbent on the user to identify how best the two divisions can be incorporated in a comprehensive BI and CPM strategy. As part of that strategy, users need to identify a shared set of overlapping goals for both areas, which, if implemented effectively, will produce a higher ROI.

One of the most significant shared goals, Gartner says, is delivering the right information at the right time. Users need to shift from a siloed mentality to one that conceptualizes BI and CPM as two different pieces of the same solution. Cases where BI and CPM fail to achieve a high ROI typically indicate a lack of vision and strategy. Both solutions fall short when BI deployments require users to stop operating in traditional workspace and move to another environment to access information there, according to Gartner.

“Taking a siloed technology or opportunistic/ tactical approach can lead to inconsistent results, inflexible applications and infrastructure, and higher cost of ownership,” Gartner said.

Many BI vendors, such as IBM Cognos, are building portfolios that converge BI and CPM markets. But the biggest barrier on the end-user side is lack of skills surrounding the use of information, tools and applications that implement those tools. When the two solutions are used correctly together, users reap the rewards. And one of the greatest benefits is all around better visibility — down to granular operations levels — that leads to optimized strategic planning.

Another benefit: Improved communication. Converged solutions equip users with the ability to share key strategies and objectives specific to their needs.

Synergies between BI and PM will inevitably lead to improved strategic performance — a natural result of leveraging BI capabilities to gain insight and context when launching a myriad of performance initiatives.

Keep an eye on the IBM Cognos TechTalk Intelligence Center. It’s as dynamic as the data, applications and processes it serves to advocate. We encourage you to check it out today by clicking here.

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