The Real Difference Between Corporate Performance Management and Business Intelligence

You might say that the biggest similarity between the concepts of business intelligence (BI) and corporate performance management (CPM) is that both of them are terribly misunderstood by even many people who claim to be experts on one or the other.

These two terms both refer to toolsets that can help business leaders to refine their operations and dial them into what their clients really want. As a result, otherwise well-meaning specialists, consultants and financial analysts have used them to describe whatever topic happens to be popular that week.

In a nutshell, business intelligence consists of both technical infrastructure and a list of procedures that allow specialists to collect information about a company’s activities. BI experts are then free to draw insights from their findings. Considering that a number of firms have suddenly found themselves in what some are calling hyper growth mode, it’s highly likely that an increasingly large percentage of firms will rely on this sort of process.

Real-world Examples of BI Processes

Over the last few years, engineers have incorporated BI tools into almost every aspect of the business experience. Sales and marketing departments rely on BI dashboards to get a look at some of the most important key performance indicators. They also use them to glance at customer profitability charts and see the lifetime value of different customers.

Once a BI tool has been deployed, it silently tracks all of this information in the background so that these departmental employees can be free to access it when necessary. Streamlining operational workflows, however, maybe the most visible application of these tools.

Managers of an education platform found that they weren’t able to get information about calls placed to customers. Their existing phone system failed to record the content of these calls and they didn’t have any sort of customer relationship management tool in place. In this particular example, the company in question connected its call centres to an existing BI tool in order to automatically make detailed records of their interactions with customers. According to some estimates, this saved representatives around 35 hours a week.

Naturally, this is a fairly extreme example, but even small gains could prove extremely fortuitous when deploying a BI-based solution.

Companies that manually extract data from structured lists could use software to instantly visualize it. Those that search for information about the best way to target ads could instead rely on a solution that aggregates statistics in a single location. Doing any of these things might only save a few minutes at a time, but those minutes start to add up.

This is especially true for those that heavily rely on remote workers. A remote sales team might not always know how well they’re performing, and this has made even some of the most progressive businesses in Ireland slightly resistant to the idea of working with remote crews in spite of the fact that an ever-increasing percentage of work is being accomplished in this way.

Something as simple as a BI tool equipped with conversion tracking technology can provide remote agents with more than enough information about what techniques work to convert their clients. That can help ease the transition into a decentralized workforce that can better deal with today’s unique challenges.

On the other hand, CPM software is meant to manage an entirely different set of concerns.

How CPM and BI Solutions Differ and Complement Each Other

Perhaps due to the red flags raised by Irish law firm Mason Hayes & Curran, the issue of both business and artificial intelligence has been a hotly discussed topic. CPM, however, hasn’t made as much of an impact in many situations. These tools are used by larger enterprise-level operations to put together new organizational strategies.

Companies that are looking to come up with a prescribed method for dealing with new situations are likely to turn to a CPM tool rather than a BI one.

This doesn’t make one type of solution superior to the other, since they’re both designed to tackle entirely different problems. In fact, many larger enterprises have deployed a corporate performance management solution alongside whichever BI dashboards they’ve already been working with. The two aren’t mutually exclusive from one another, so there shouldn’t be any issues with using them together.

Both paradigms rely heavily on the use of metrics to analyze the performance of a business. CPM tools in particular look at the management side of the equation. They’re often designed to figure out what top-level changes need to be put in place in order to reduce the risk of a negative outcome occurring.

Large enterprises that have consistently experienced said outcome will usually know exactly what it is that they want to stop – regardless of the business unit in which this quantified undesired outcome may take place, which could be a percentage drop in sales, units produced, projected revenue or anything else. These types of metrics can be especially volatile at companies that deal in international trade and have to sell products outside of Ireland or even the Eurozone entirely.

In this case, use of BI tools is still important because they can do more than simply tell someone how to avoid or affect a specific outcome. International trade experts have shared BI-derived information for precisely this reason. Astute observers may remember when a global consultancy firm made international data available to investors on a worldwide scale.

Target audience is another area where BI and CPM tools tend to differ. Managerial teams often use CPM-based tools to help them make decisions and come up with lists of the best practices for a specific type of business situation. You might think of them as strategic tools for that reason. BI solutions tend to be far more tactical, and they’re therefore used by a much broader subsection of individuals working throughout every department of an organizational structure.

From Confusion to Dependence

Though it’s likely that people will continue to conflate the two, it’s equally likely that the kinds of problems that BI and CPM tools solve will grow further and further apart. It’s also every bit as likely that analysts, finance teams and senior executives growing companies the world over will come to rely on tools from both categories and use them alongside one another.