Many organizations are confused as to the difference between BI and Performance Management and how the two fit together. This is made worse as Performance Management has become synonymous with planning, budgeting and forecasting systems, while BI is seen as systems that provide detailed analyses. Gartner introduced the term Corporate Performance Management (CPM), which they defined as “… the processes, methodologies, metrics & systems used to monitor and manage an enterprise’s business performance”. The promise of CPM was to improve decision-making and provide more effective control over organizational activity.
In this respect, Performance Management is not a technology solution but an approach that to my mind aligns organizational resources with strategy to answer a number of key questions including:
- What is our strategy and how are we performing against it?
- Are we making the best use of resources?
- Are we heading in the right direction to achieve objectives?
- Where is the organization most at risk and what can be done about it?
The role of a Performance Management solution is to provide a system that can help managers answer these questions and through which organizational activity is planned and directed, while BI’s role is to provide insight into different aspects of performance. However, despite the hype surrounding Performance Management /BI solutions, it’s often left to a customer to work out how to fit these different systems together while at the same time assessing the data to be planned, the types of reports to be produced, and how to optimize the associated management processes. A major set of tasks by any standard, that often results in implementations that fall far short of what is required.
For this reason my firm has created a free, vendor independent, Performance Management framework built on many years of experience that:
- Provides a clear holistic view of what Performance Management is by describing the processes involved and how they interact with each other.
- Helps organizations to identify what BI systems they need and how to put them together to truly support Performance Management
- Assists organizations when evaluating software and service provider offerings
To access the CPM Evaluation Framework, click here.