Business Intelligence (BI) and Business Performance Management (BPM) Evaluation Center

What Are BI and Business Performance Management (BPM)?

The terms business intelligence (BI) and business performance management (BPM) are heard time and again, but what do they really mean for businesses?

Getting back to basics, both terms refer to the concept of using technology to

• Identify sales trends to develop sales strategies and to manage future sales
• Manage employee performance
• Identify quality issues on the shop floor
• Optimize business processes through the use of technology
• Forecast, budget, and plan within a process-centric environment
• Allow C-level executives the ability to monitor the organization's performance regularly and centrally throughout the day

The common theme within these technologies is that organizations use them to optimize their performance and stay competitive within the market. Business performance management should not be confused with business process management, also known as BPM.

What's the Difference between BI and Business Performance Management (BPM)?

Although there is crossover in the functionality and use of BI and business performance management solutions, there are certain areas of differentiation that seem to be consistent across the industry.

For instance, BI typically is used by taking a snapshot of transactional data and putting it in a separate database (called a data warehouse) to analyze trends and develop reports based on information captured at a given point in time. As these systems become more robust, organizations are beginning to capture data in a more timely fashion (i.e., daily or multiple times daily) to provide a more forward-looking approach to analysis.

BPM on the other hand, takes the types of data visualization tools offered within BI (i.e., reports, scorecards and dashboards), and uses them within an organization's processes. Where this is seen most is within finance, especially within budgeting, activity based costing, forecasting, consolidations, etc. Vendors develop specific interfaces within their own applications that walk users through these processes and allow collaboration across departments, centralized Web-based access, and the management of performance based on set metrics.

Both BI and BPM are centered on improving an organization's performance. The markets overlap, but vendors are developing modules to meet organizational requirements based on the organization's needs. Some organizations will embed both tools into their organizations, but their functions are generally separated out as in the table below:

Business Intelligence (BI)	Business Performance Management (BPM)
Appeals to operations users and line-of-business (LOB) managers	Appeals to financial applications users
Embeds metrics analysis within internal processes to help users make timely business decisions, and to enable strategic or tactical planning	Focuses on defined metrics to help users improve processes, and manage and increase performance
Provides data needed to answer essential business issues and to plan and act based on the analysis of business problems	Uses scorecarding and dashboarding to measure organizational metrics and to help organizations manage performance

The Benefits of BI and Business Performance Management

Sales and marketing

• The sales department can use BI to identify sales trends over time.
• Forecasts can be developed to plan and to identify sales metrics for the future.
• Sales managers can monitor and manage team performance

• BI can be used to help maintain quality control within the organization.
• Line of business (LOB) managers can use regular updates of product status to identify quality status.

• Finance and accounting teams use performance management tools to collaborate with one another, get approval from other departments, or simply follow a set of procedures to close month-end or create budgets.

• Metrics can be set to determine performance goals and measure how employees are performing
• HR can determine if there are trends based on misuse of medical benefits, sick days taken, and whether incentive programs are having the desired effects.

• By setting metrics to monitor performance, and identifying how organizations stack up against their competitors in the marketplace, organizations can capture timely information to help drive organizational performance.
• Whether using BI or BPM, organizations can manage, maintain, and drive decision making and measure the identified metrics against how the organization is actually performing.

Most Requested Research Related to BI and BPM

• Business Intelligence Success, Lesson Learned
   
• Business Intelligence: Its Ins and Outs
   
• Factors Inhibiting the Widespread Adoption of Business Performance Management
   
• Business Performance Management Basics: An Overview of Business Performance Management and Its Benefits to the Organization
   
• Business Intelligence Research Article Archive
   

Vendor White Papers Related to BI and BPM
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