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BI
vs. CPM
In
the last
newsletter I mused if Cognos was going to
be the next to be acquired. See my post IBM
acquires Cognos: "It's the End of the World
as We Know It …" for an analysis.
Also,
check out BI
Market: The Song Remains the Same for more
of my thoughts on whether it really is the end
of the world as we know it.
If
you're in planning mode for 2008, you may be interested
in my series of 2008
Data Integration Planning posts on Informatica's
Enterprise
Data Management blog.
Business
intelligence and corporate performance management
are not the same thing. In the article below learn
the differences between BI and CPM -- and how
they're related.
Rick
Sherman, Athena IT Solutions
Business
intelligence and corporate performance management
software: What's the difference?
What
is the difference between business intelligence
(BI) and corporate performance management (CPM)?
What is the difference between BI and CPM vendors?
The answer to the second question is that they
are the same. And, the fact that the vendors are
the same clouds the answer to the first question.
Marketing literature and industry articles further
confuse the issue by using the same terms, applications
and benefits for both BI and CPM.
BI
has become the term describing the technology
used to access, analyze and report on data relevant
to an enterprise. It encompasses a wide spectrum
of software including ad-hoc query, reporting,
on-line analytical processing (OLAP), dashboards,
scorecards, search, visualization and more. These
software products started as stand-alone tools,
but BI software vendors have incorporated them
into their BI suites. BI software is always part
of an overall CPM solution.
CPM,
however, is not just about technology. CPM involves
the processes, methodologies, metrics and technology
(applications and software tools) used to monitor,
measure and manage a business. The business processes
may include financial, marketing, sales, customer
relationship management, supply chain management
or others.
A
business typically implements CPM first for financial
processes such as budgeting, forecasting and planning,
though CPM may be applied to other domains, such
as sales marketing, customer support or HR. Often,
CPM solutions support specific business processes
such as supply chain management (SCM) for manufacturing
or merchandise planning for retailers. Many organizations
build CPM programs around a business methodology,
such as Activity-Based Management (ABM), Economic
Value-Added (EVA) or others. But the most common,
particularly in the US, is balanced scorecard
(BSC). Using a business methodology provides an
overall business approach for your CPM solution
rather than merely generating a series of tactical,
process-specific reports divorced from a strategic
and enterprise-wide perspective of your business.
Once
you've selected the business processes you want
to improve, and the business methodology you'll
implement, you need to select the metrics to measure,
monitor and manage. These metrics are often referred
to as key performance indicators (KPIs). It's
up to the business (not IT!) to select and define
them. A lot of attention is often given to having
the business agree on business data definitions,
but it is just as crucial that they select and
define the KPIs. They should use a data governance
process for both data definitions and KPIs. This
is a critical first step for any CPM initiative.
Finally,
you get to point of choosing CPM technology. Marketing
literature and industry articles typically start
with the discussion of CPM software and assume
it is a single "package" -- but it's
often a set of bundled components. To facilitate
the success of the CPM program, make sure you
understand what is really being bundled in these
packages.
A
CPM package often includes both application-specific
components and software tools to develop or integrate
those components.
The
application-specific components can include:
- A business application such as budgeting,
planning or forecasting
- A template or set of recommended KPIs and
data definitions supporting the business application
- A data model implemented as a data mart or
data warehouse
- A set of reports, cubes or analytics
- A group of ETL (extract, transform and load)
routines to move data from source systems to
the application data mart or data warehouse
The
software tools used to implement the business
application are often part of the CPM package
and can include:
The
big question you should ask when evaluating these
CPM package components is if they fit all of your
business requirements, including processes, metrics
and methodologies. Or are you going to have to
change your business processes to fit the technology?
(And is that something you really want to do?
In my experience, that's a recipe for CPM failure.)
In part 2 of this article series we'll discuss
this issue more, along with the decision of building
versus buying a CPM solution. |
