BI vs CPM – What’s the difference?
‘Is there a difference between BI (Business intelligence) and CPM (Corporate Performance Management)?’
A question that has plagued board rooms and senior leadership teams over the past few years.
In short, the answer is “yes” there is a difference, knowing which one to choose however means understanding how they differ and what your specific needs are.
BI tools are bits of software that are very good at manipulating large volumes of data, very quickly. They can help glean powerful information like performance metrics and trends. This kind of information is great … to some people. It’s generally best suited to people who work within business analysis. The data and trends that come out of it will give you detailed performance data for whatever data silo is being looked at. It’s detailed and specific, you will be able to drill down to a single transaction level if that’s what is needed. It is, however, a bit of a one way street, it will provide the information but won’t help manage performance using the information.
CPM takes BI much further; it looks at various KPI’s (key performance indicators) from different sources, information from multiple systems and lets you see them collated together. CPM systems use the information gathered to give a picture of what has happened and is happening (company-wide) but also helps manage where that picture is headed.
The system will help plan, forecast, and view the information in the context of corporate strategy. It can link the data to specific objectives and action plans as well as showing where potential risks might lay. Because CPM systems give true context for the data, taking into account things like cross charging and moving exchange rates it is possible to have an accurate current picture side by side with the future forecast. The unique combination of accurate, companywide, current information against forecasts allows the best decisions to be made at the top levels of management i.e. a two way street.
The appropriateness of CPM and BI tools very much depends on the size and complexity of the business, generally speaking the larger and more complex the business the greater the need for CPM. The decision to get CPM needs to come from the need to have a true company-wide picture of performance.