Given the current tough economic climate, performance management is likely to be a hot topic in 2003 because it allows corporations to optimize their business operations to improve efficiency, reduce costs and increase revenues. This area of business intelligence, however, is littered with different technologies and confusing terms. This month I will try to sort out the different types of performance management and explain how to use performance management to exploit the power of your business intelligence (BI) investment.

Broadly speaking, there are three types of business initiatives associated with business intelligence applications and tools and their underlying data warehouses. These are shown in Figure 1. Strategic planning involves determining long-term business goals that may take many months, or possibly several years to achieve. A goal could be, for example, to improve customer revenue, retention and satisfaction. Strategic performance management (SPM) applications enable executives and managers to set performance goals and to monitor actual business performance to determine if the organization is achieving those goals.

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