Imran Choudhry examines these two vital business tools, asking what exactly they can do for your business
When it comes to BI (Business Intelligence) and CPM (Corporate Performance Management), people often use the terms to mean one and the same: tools for businesses which tell them the state-of-play within their particular organisation. In reality, while they share some things in common, the benefits they can bring to an organisation are definitely different.
So, what is BI? Well, Gartner defines it as:
“the technology used to gather and analyse data relevant to an enterprise…to improve decision making”
Basically, this means that BI is a tool which pulls together all vital data from across the business, analysing it to pinpoint any trends and themes, and then presenting this data in an accessible format to underpin robust, fact-based decisions.
CPM on the other hand is defined by Gartner as:
“an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise”
This means that CPM takes your data to the next level, comparing data against KPIs from across the business to monitor not only past and present performance, but to accurately inform future performance and business direction, too.
The biggest benefit of the right BI tool is that it gives you an accurate picture of the current situation across your business. Presenting the information in a highly visual format, via dashboards of charts, graphs and scorecards, means that crucial business information is readily accessible to all and you don’t have to be a data analyst to make sense of it. Because they have advanced analytics built-in, BI systems find trends in your data and then present these to you, allowing you to drill back down into the numbers behind the trends for even further analysis. By making sense of the huge amounts of data from across the business, collating and analysing it all in one place, you can make sure you are in full possession of all the facts to help you make the right decisions at the right time.
BI isn’t just for use by board-level decision-makers either. The fact that BI tools take information from right across the business, so analysing website traffic or customers’ purchasing patterns for example, means that it’s relevant for all. The best BI tools enable different departments or sections of the business to access data relevant to their roles to then present back a high-level overview of the here-and-now to senior management in an easy-to-understand format. It’s this accurate, in-depth and contextualised data that ultimately underpins robust, timely decision-making.
What CPM tools do is take your business information to the next level, monitoring your business’ progress in light of the decisions that were taken based on the information provided by your BI system. So, rather than reporting on the here-and-now, the right CPM solution analyses not only how your business has performed, but also how it’s currently performing and how it is very likely to perform in the future. Where BI systems give you the information on which to base decisions, CPM systems can help to actually manage performance, analysing data from across the business against a defined set of KPIs to better plan and forecast strategic direction for the business as a whole.
Designed for accounting and finance processes in particular, CPM tools drill down into financial and operational analysis, linking key business data to specific objectives and strategic actions, monitoring performance and highlighting where potential risks might lie, all while informing budgeting and forecasting. CPM systems put data into context, explaining what the facts and figures actually mean for the future of the business, presenting an accurate picture of today’s business performance alongside a future forecast. For business leaders in particular, this level of insight into future performance is crucial, particularly in today’s fast-paced digital economy.
BI or CPM?
It’s all about what is right for your business need. BI systems are implemented by businesses of all shapes and sizes, while CPM tools are traditionally associated with larger, more complex businesses which need a comprehensive picture of business-wide performance. However this dynamic is changing rapidly. The information that can be gleaned from both BI and CPM tools is so valuable and can play such a crucial role in shaping the strategic direction of the company, more and more businesses are implementing both as complementary technologies.
Affordable, Scalable, Flexible
With affordable, scalable and flexible solutions now available to suit every size of organisation, those businesses investing in BI/CPM technologies now are already at an advantage, positioning themselves one step ahead of the competition.