CPM and Business Intelligence (BI) are both tools that any business can use to evaluate its financial and operational health and fitness. However, while both fall into the category of enterprise technology that uses data to analyse progress, strengths, threats and opportunities, the two are not the same. And what they offer in terms of output doesn’t overlap that much. It’s the key differences between CPM and BI that will enable a business to determine which one is the better fit.
Corporate Performance Management (CPM)
CPM is the newer of these two tools and has only been used widely since the 1990s. It tends to have a narrower focus than BI in terms of audience and is designed around the processes of financial reporting and budgeting. CPM is most often used by those in the accounting department of the business, as it tends to be especially important for accounting and finance work.
It may involve processes such as budgeting and forecasting, analysis of finances and operations, as well as the modelling that may be necessary for planning decision making. Given the relevance of CPM when it comes to budgeting and reporting, many outside of the accounting department also come into contact with it – most often at a management level.
Business Intelligence (BI)
The motivation behind the definition of BI was to name a term that describes the use of company data in practices and methodologies to make better business decisions. BI as a concept has been around since the early 1980s and has much wider application than CPM – the tools of BI are applicable right across an organisation, as opposed to mostly of use to those in the accounting team or in management.
BI can also be a much more visual option than CPM. It tends to involve processes that use graphs, scorecards, visualisations etc and which visually illustrate the themes and trends that arise in company data. BI can also be applied to analysis of digital performance, such as looking at the way a website is functioning and the trends in website traffic and visitor behaviours.
BI and CPM – the common thread
Although there are some clear differences between BI and CPM the two also have a single common thread: data. Given the wealth of data that is available to businesses today to make enterprise technology more effective and efficient, management has become increasingly important.
Both tools integrate a wide range of different types of data to create insight and analysis that can provide a perspective on how the business is functioning, what kind of opportunities exist and the vulnerabilities that need to be protected against. Both will also be affected by the decision to move systems and processes to the cloud. So, it’s essential that data management is strong whether BI or CPM is your tool of choice. When data is properly managed, both BI and CPM are made more effective.
Whether you opt for BI or CPM for your business, the way data is collected and managed will be crucial to how effective these tools can be.
Get in touch with CFM Systems for all your financial performance solutions requirements today.