Business intelligence (BI) has morphed over the last 10 years, making the transition from simple reporting tool to one that provides sophisticated functionality, such as analysis, and dashboards that deliver contextualised information, writes Desmond Botha, financial solutions specialist at Fios.
Although BI is still an important tool within organisations, it is now fast being recognised as a cog in the corporate performance management (CPM) agenda where, together with measuring, monitoring, planning, budgeting, consolidation and forecasts, it effectively enables understanding of the dynamics of performance across the entire organisation.
By integrating these components, businesses are able to answer the three fundamental business questions: 'how are we doing', 'why' and 'what should we be doing'. In addition, it links results to corporate goals and provides a clear view on how to achieve these goals. Creating a co-ordinated and integrated enterprise-wide platform also delivers insight into market fluctuations and future trends that can impact the success of a business.
The drivers of CPM can be attributed to three influences: the need for information that is strategic and provides a competitive edge; compliance; and the fact that the combined technologies that form the CPM platform have matured.
Traditionally, CPM functions have been executed through a series of complex and manual processes, not excluding the use of spreadsheets – an inaccurate and difficult approach to establishing the performance of an organisation. Today, CPM solutions provide an automated platform that mitigates risk by removing inaccuracy (think spreadsheet errors) and engages everyone in the organisation from sales and marketing to finance.
BI provides the information delivery component that is crucial for the execution of analysis, measuring, monitoring, planning, budgets and forecasts. It delivers the essential ingredient – accurate and contextualised information – that forms the foundation on which the rest of CPM is built.
It delivers a common framework for decisions to be made throughout the organisation and provides the answers to the 'Why?' of business performance. Used in conjunction with the additional components that form CPM, it allows businesses to accurately measure both operational and financial activity and performance, providing the necessary context to understand which decisions can be made.
So, rather than purely focusing on the benefits the BI delivers, businesses should view BI as a necessary component of CPM, providing the business with benefits that far exceed the individual benefits of reporting or analysis.