Cloud CPM vs Business Intelligence

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This article discusses the differences between corporate performance management (CPM) and business intelligence (BI) solutions in the cloud technology era.

On this blog, we write a lot about corporate performance management (CPM) tools. And we talk a lot about business intelligence (BI) solutions. In fact, we seemingly use the terms interchangeably – and there’s some thought behind that. BI and CPM exist in the same realm of enterprise technology that makes sense of the health of the organization. They both pull data from a variety of sources to crunch numbers and analyze information, so that you can pinpoint strengths, weaknesses, opportunities, and threats. However, there are some differences, and while their output might not seem mutually exclusive, there is not much overlap. As we continue our ascent to the new normal of cloud technology platforms, it will be helpful for companies to understand the differences between the two, so the right solutions can be deployed to meet organizational goals. This article will highlight the distinctions between BI and CPM solutions, so you can continue to build your cloud technology roadmap with precision.

Let’s begin by discussing the definitions. BI is defined as “the technology used to gather and analyze data relevant to an enterprise in order to improve business decision making.” On the other hand, Gartner defines CPM as “an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise.” Does that sound pretty similar to you? The definitions of both terms vary slightly across the internet, but perhaps now you can see why this blog might use the terms loosely or interchangeably. That said, we can refine our understanding of the two a little further.

BI as a concept has been around longer, since 1989 to be exact, whereas CPM emerged as a term in the early 1990s. Howard Dresner, known as the father of BI, suggested the term in a shift from older decision support systems. His aim was to capture in a single term the practices and methodologies of making smarter business decisions through fact-based company information. Furthermore, BI processes are heavily focused on visualizations, meaning dashboards of charts, graphs, and scorecards. BI isn’t limited to just illustrations of company data trends, but also allows for drill-down into numbers behind the visuals. BI can additionally mean big data analysis, making sense of web site traffic and visitor behavior as an example. In general, BI is for a cross-organization audience, whereas CPM tends to focus on a smaller group of professionals.

CPM or Enterprise Performance Management (EPM) is a slightly newer term, referring to processes around financial reporting and budgeting. CPM tools and an accounting system are the two key tools to automate Accounting and Finance jobs, zooming in on financial and operational analysis, as well as budgeting, forecasting, and modeling as planning functions. These processes generally belong to professionals in the accounting department, but do span outward as budgeting typically involves management contributions across the organization – and every professional likely has their hand in some type of reporting to track output performance. But there is one thing that connects both BI and CPM: data management.

Data management is increasingly more important as the amount and significance of data grows, especially as we navigate the potential chaos of integrating data from sources that are spread out on premise and in the cloud. In BI and CPM, you are harnessing the power of diverse data types to paint a complete picture – of trends and of analysis that can speak to the health of your company and to a path forward. Pair that with the challenge of navigating all of your company’s disparate data sources, and you have a good case for a sound data management system, namely a pre-built, configurable data warehouse.

A data warehouse used to be an in-house project that could take years and lots of development dollars, but are now offered as complete products, customizable and pre-integrated to leading data sources. Today’s commercial data warehouse solutions serve as a singular, organized space to consolidate data to be leveraged for both BI and CPM processes. Moreover, a data warehouse can simplify the move toward cloud technologies, while maintaining the on-premise tools. The tide has arguably turned in favor of a move to the cloud in terms of where systems, applications, and data are being housed, so whether or not you are ready to incrementally move your enterprise technology, it is happening – if nothing else, on the vendor side. A data warehouse is a steady boat to traverse this business culture current because it provides a high performance repository for all of your valuable company data. But there are some questions you need to figure out, regardless of whether you’re looking specifically at BI or CPM processes.

Moving into the cloud era, you’re going to have some questions. Who owns the management required of your technology – IT or your finance team? If your IT department is already stretched thin, opting for cloud technologies means that your applications are managed by an outsourced team, which could save you employee bandwidth and money. Where are most of your applications and data currently staged? If the answer to that is on-premise, a data warehouse is a great step in the direction of setting yourself up for cloud reporting, budgeting, and data visualizations. Both BI and CPM involve important organizational processes that are moving to the cloud, so preparing adequately for that shift might be overwhelming at times, and Solver, Inc. is happy to answer any questions and review BI360’s easy-to-use, Excel- and web-based budgeting and reporting solution that enables collaborative, streamlined decision-making capabilities for your BI experience, both for on-premise and cloud deployment.

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