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A question I am often asked is… what is the difference between Corporate Performance Management (CPM) and Business Intelligence (BI)? I have come up with 5 “rules of thumb” to help provide an answer and clarify this situation:
- CPM is a top-down model that begins with business strategy. BI is bottom-up analysis that begins with situation analysis.
- CPM metrics are based on goals and objectives. BI metrics are ad hoc and mainly retrospective.
- CPM aligns to business processes. BI aligns to information requirements.
- CPM is a closed-loop model that controls and monitors business processes. BI provides open-ended analysis of operational performance.
- CPM is analytical applications-based. BI is tools-based.
CPM (although vendors such as Pilot and Corvu have been around for many years) is in an early growth market situation and is valued at around $1bn world-wide and is growing at 30%+. BI is in a mature “commoditised” market situation and is valued at $7bn world-wide and is growing at c. 8%.
The CPM market is comprised of 3 types of vendor: Enterprise CPM vendors such as SAP, SAS, and Oracle; Finance CPM vendors such as Hyperion, Outlooksoft and Cartesis; and Visualisation and Information Delivery vendors such as Microsoft, Applix and SymphonyRPM. The BI market is also comprised of 3 types of vendor: Complete BI solutions vendors such as SAP, SAS, and Oracle (notice a trend here?); Platform Tools vendors such as Business Objects, Cognos, and Information Builders; and Query & Reporting vendors such as Actuate, Qliktech, and Panorama.
The product trends outlined in the new Bloor report on the CPM market are: modern web-based CPM platforms, solutions customised for industry sectors and individual customer needs, real-time data access, specialised compliance and risk management applications, data quality and data integration as part of the “solutions stack”, and acquisition and alliances rather than organic product development.
The product trends outlined in the new Bloor report on the BI market are a little different: links to mapping data (e.g. of ESRI or MapInfo), predictive analytics, operational BI providing real-time and right-time data access, optimised interfaces, industry focused analytic solutions, access to a wide range of data sources and cubes, latency and speed of query response, and Search.
The similarities between CPM and BI product trends? Complete “whole product” solutions comprising of industry applications solutions, real-time data access from heterogeneous sources, fast user response to queries, better (Microsoft-like and graphical) user interfaces, and predictive forecasting and modeling functionality.
In conclusion, the lines between CPM and BI are blurred at best. They both offer variations on thesame theme—that of consolidating, analyzing, and reporting on enterprise data. Vendors that prosper will be those that provide both CPM and BI components as part of their solutions. Those vendors that will struggle are those that play in BI but not CPM, or CPM but not BI—these vendors need to migrate to specialised niches or to prepare their financial books for acquisition. Customers will demand a complete supplier solution rather than a disconnected set of components, platforms and technologies from a multitude of vendors who share little allegiance and loyalty to one another.