This article will focus on the demand for convergence of Business Intelligence and Corporate Performance Management tools and why this benefits mid-market companies.

Image taken from Gartner.

The latest release of the Gartner Magic Quadrant for Business Intelligence strengthened my conviction that the market will see consolidation between the Business Intelligence/Visualization (BI) and Corporate Performance Management (CPM) vendors. Gartner classifies them in separate quadrants because the respective tools are evaluated differently during the sales process. Furthermore, BI tools usually sell into marketing and sales teams while CPM targets finance and accounting professionals. Consequently, there has been limited Mergers and Acquisitions (M&A) in the space. Note that this article assumes readers are familiar with the basic definitions to focus on a narrative explaining the demand for their convergence.

While BI has been around for decades, a former Gartner analyst proposed the term in 1989, Tableau’s early success demonstrated that people want self-service data. After Tableau’s impressive IPO, venture capital became readily available to BI companies which has led to a saturated market with undifferentiated dashboard tools. The total addressable market for BI is much larger than the market for CPM because an average US company has about twenty sales/marketing professionals to every two finance/accounting professionals. BI has also successfully marketed itself as a “must-have” to generate new insights about your business. Meanwhile, many CPM tools fall into the category of process improvement and are often evaluated as a “nice-to-have”. Combining the two presents an opportunity to generate insights from a controlled environment across all departments.

Specifically in the Niche/Visionaries quadrant focusing on mid-market:

BI/Visualization tools are great for larger enterprises. Those companies typically have a mature Data Warehouse (DW) and data marts for specific business units. Visualization products can sit on top of those data marts and users can do ad-hoc reporting to answer their own questions. Conversely, mid-sized companies typically don’t have business analysts, integration specialists, database administration teams, data warehouses, and/or a data governance process. As a result, many mid-sized companies end up with a beautiful heat map showing inaccurate data. BI products are often purchased because the demo looks magical and vendors have seemingly moved down stream as the enterprise market crowded. Also, a VP of Sales interested in a new BI tool will likely garner the necessary buy-in more quickly than a finance/accounting professional as revenue generating initiatives are typically a higher priority for mid-size companies.
However, there is a major problem with purchasing a BI product without Finance/IT’s support. Companies without a data warehouse or team of data analyst typically have data integrity issues. This results in meaningless data and security issues. Tableau,, and others seem to skip the transformation aspect of a standard Extract, Transform and Load (ETL) process. While the platforms can read a Standard Query Language (SQL) view and create a dashboard, what happens when users try to create a trend analysis or a sub total within a tabular display? Without historical data in a DW, users will need to ask IT for help or implement a data blend tool such as Alteryx.
Large companies have enough internal IT resources to handle integration, thereby buying the best-of-breed solutions. Mid-sized companies are often left with visualization products but no CPM.

Explain again how CPM and BI are different:

Working at Solver, a CPM vendor, I am constantly asked to differentiate from Microsoft’s BI product, In response, I have outlined the functionality that BI does not provide, whereas a CPM tool such as Solver’s BI360 does:

  1. Formatted Reports: BI does not replace reports needed for Accounting. For example, it is not possible to add a new account in your Enterprise Resource Planning (ERP) and then immediately see the output in a formatted Profit & Loss Statement with a visualization tool. This also includes delivering results to external stakeholders for review.
  2. Financial Close and Consolidations: BI is not a tool that accountants can use to close the books, possibly also with currency conversion, allocations and elimination steps.
  3. Budgeting and Forecasting: BI does not have the capability of creating annual financial and operational plans, budgets, and periodic forecasts. For example, the tools do not have the ability to store data, manage approval workflow, add line-item details for T&E, and much more.
  4. Excel: BI is not Excel-based. This restricts Finance/Accounting from using the very extensive and familiar formulas and formatting Excel offers.
  5. Operational Reports: Accounts Receivable Aging, Accounts Payable, and other relevant reports are not available in multi-page formats with BI tools.
  6. Drill-down into transactions in ERP sub-ledgers in reports/budget forms: While BI offers plenty of charts and graphs, the tools often do not showcase the actual underlying figures.

Final thoughts:

BI vendors started selling into departments outside of IT to avoid the bottleneck. While in theory getting data to everyone is the optimal goal, IT needs to make sure the data is cleansed and secured. BI actually exacerbated the tension between IT and Business. A tool integrating CPM & BI can ease that tension because it provides control and security to secure the data for analysis. It important to remember that CPM and BI often rely on the same underlying data. An integrated tool would help the finance and accounting teams close the books and budgeting/forecast to plan outcomes based on the BI insights.
As a final thought, BI tools provide business users autonomy to visualize data on their own, but gathering that data from disparate spreadsheets and other files is a highly error-prone approach that can negate the value of the analytics.
The end game is to create a corporate strategy with a true company wide picture of performance.