Corporate performance management and business intelligence…what’s the difference?
Although the two concepts are closely related, there are some differences between the two in functionality, usage, and advantages.
In the following article, we will take a quick glance at some of the basic differences between the two concepts. Hopefully, this information will provide you with a clearer understanding as to why Vivid CPM and Vivid Flex BI are distinguished as different products.
Business Intelligence (BI)
The origin of the term business intelligence is generally attributed to an IBM computer scientist named Hans Peter Luhn. Luhn introduced it in an article he wrote in 1958 aptly titled “A business intelligence system.”
Typically, BI refers to an organization systematically making sense of the information that they collect in order to become more efficient, effective, and ultimately more profitable. Today, BI enables organizations to store, display, analyze, and react to this information more efficiently than even Hans Peter could have ever imagined.
With most BI tools, an organization’s raw data is pulled from their various systems and stored in an intermediate data warehouse. The data warehouse is a staging area where the information is organized and prepared for presentation.
The most common types of presentation formats associated with BI are:
- Flexible user defined (aka “ad hoc”) Reports: where users can drill down into the underlying details
- Dashboards: that provide a snapshot of how an organization is performing from positional or departmental perspectives
Good BI enables management to quickly analyze data, recognize trends, and react to changing conditions within their organization.
Corporate Performance Management (CPM)
Sometimes also referred to as “Business Performance Management,” CPM takes the same concept from a more structured perspective. CPM is often considered a subsection of BI, but we feel it is more accurate to distinguish between the two as many organizations may only need one or the other.
CPM is typically focused on G/L-based analysis, financial reporting, budgeting, and forecasting. Often, CPM data is presented in a Microsoft Excel® report for analysis and review.
Without question, Excel® is still the choice of accounting professionals worldwide for financial reporting, budgeting and analysis. However, utilizing Excel® alone comes with several drawbacks. Creating, consolidating and tracking multiple spreadsheets, needing to export the data from systems, and the inherent security issues when collaborating via email are all issues organizations face when using Excel® alone.
Luckily, solid CPM and BI solutions are here to address all of these issues.