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Corporate performance management and BI: What's the difference?

Expert Hyoun Park answers a common question that confuses many finance executives.

Hyoun ParkHyoun Park

Both business intelligence and corporate performance management have changed dramatically over the past decade,...

and this change has made both terms nebulous and challenging to define. However, regardless of the definitions used, there are some core differences between business intelligence and corporate performance management.

Business intelligence typically refers to the tools used to change data into some form of insightful report, visualization or suggestion. To create business intelligence, data must be analyzed, placed in some form of context and presented in a way that makes sense to the end user. As business intelligence has evolved based on the breadth of data analyzed and the increasing analytic maturity of businesses, a wide variety of technologies have been wrapped into the term business intelligence, ranging from workflow and application development platforms to analytic reporting to visualization. These tools tend to be general and horizontal in nature and can provide guidance to operational trends throughout the business. In addition, business intelligence can be used both as an internal and external tool for partners and market-facing functions.

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In this context, corporate performance management (CPM) can be seen as a subset of business intelligence focused specifically on the health of the company. Traditionally, this "health" has been defined purely in financial terms to support core performance functions, such as forecasting, budgeting and planning, and has only been shared internally with key financial stakeholders and investors. However, as business leaders realized that reputation, morale, strategy and innovation are also key leading indicators of corporate success, they have sought to integrate these nonfinancial characteristics in CPM, such as strategic planning, process efficiencies, brand equity, risk management and employee performance.

Hyoun Park is principal analyst at Nucleus Research, overseeing primary investigative research on analytics, big data, business analytics, social software, and enterprise mobility. Follow him on Twitter @hyounpark and read his research at www.nucleusresearch.com

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This was last published in August 2013

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