Mike would like to thank Brian Litofsky of Palladium Group for his contribution to this column.
As I'm sure you're aware, there has been significant consolidation within the business intelligence and corporate performance management landscapes. Software and services vendors are merging to capture market share and provide end-to-end solutions that can better link operational, financial and analytical data to strategic business objectives. This consolidation trend has led to the convergence of both process and technology in the BI and performance management arenas.

Process Convergence

Historically, performance management was managed out of the finance organization for the purpose of financial planning and consolidation while BI activities were managed out of the BI competency center for the purpose of reporting and analysis to drive management insight. This distinction becomes blurred as BI and performance management practices are used collectively to enable the same business processes across three business areas: executive, finance and operations.


  • Executives can now examine the overall health of an organization in a single integrated view enabled through dashboards and scorecards. Summarized information and key performance indicators are presented instead of detailed operational data to avoid inundating executives with information that does not provide accurate business context. From a performance management perspective, these measures provide visibility into business performance relative to financial and strategic plans. This is enabled through a common BI framework that consolidates data from multiple data sources and presents it in a consistent manner. 
  • Finance traditionally "owns" performance management functions of planning and financial consolidation. However, neither process can exist without BI, leading to a need to break away from static reporting related to the financial close and budget. The paradigm then shifts to dynamic analysis of the cause-and-effect relationships driving business performance, realized through integration of BI and performance management processes. 
  • Operations has often been focused on using BI for detailed data analysis of sales, manufacturing and supply chain data. Current economic conditions only increase the need for detailed operational planning to ensure that costs and revenue are aligned. The timing of the cycle between reporting on the past and planning for the future needs to be dramatically shortened to keep the business lean and flexible. This means that BI and performance management processes must happen in tandem.

Technology Convergence

As part of the technology consolidation era, vendors are looking at the integration points for performance management and BI product suites. They realize that as the business processes themselves align, so, too, must the technology solutions they offer. Executives, managers and analysts alike will require a common interface to build strategic objectives and measures, develop financial plans and report on current and future performance in an effort to minimize cycle times and adapt to change faster than the competition. 

For example, IBM's TM1 product (formerly Applix TM1 financial performance management) is often used for the planning aspect of performance management but can also be used for reasonably sized multidimensional BI. IBM has also integrated the application with the Cognos BI and Planning Suite of applications. Additionally, Oracle's Business Intelligence Suite Enterprise Edition Plus provides a common user experience for all of its BI applications and now has integration points with their Enterprise Performance Management Suite. These are just two examples, but they show how some of the core technologies are merging. Even in cases where they are not, there will be additional connectivity to ease transition between BI and performance management environments.

What this means for your projects, processes and implementations is the following: try not to think of these areas as separate but as part of a holistic approach. While there still may be projects that focus on one area, true business value will be realized when specific implementations are aligned across BI and performance management processes. For example, while a sales reporting system may focus on the data and processes to analyze sales information, the end result of that analysis will drive business decisions that feed back into the performance management cycle. Paying attention to this will ensure that the right analysis is created to drive better performance.

Another area to consider is how to manage BI and performance management competencies in your organization. Traditionally, this management structure has been the BI competency center. As the business processes and technologies align, a single BI/performance management competency center should emerge to drive governance, procedures and technology excellence across the two disciplines. The same tenets hold true, and the leaders within this space will realize they can best serve their business by successfully enabling both BI and performance management together.

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