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Business Intelligence and Business Performance Management: A Marriage Made in Heaven?

Business intelligence and business performance management are both growing and will continue to show strong momentum for some time to come.

This article originally appeared on the BeyeNETWORK

In the past few years, two major technologies –business intelligence (BI) and business performance management (BPM) – have grown closer and closer together. In fact, some people think they are now one and the same, which they are not.  They are, however, very intertwined and share a synergistic relationship. Business intelligence provides tools essential to the delivery of business performance management applications. BPM, in turn, helps drive adoption of business intelligence by tying it to a strategic business initiative. Like most relationships, this one is not in balance. While BPM requires business intelligence to achieve its goals, the reverse is not true. To put it another way, BI can address the requirements of many business applications and does not truly need BPM to be successful. BPM, on the other hand, could not exist without taking advantage of BI capabilities. BPM is business intelligence with domain expertise added (and quite a bit of application code).

BPM applications are usually the home of the budget and plan, but need to retrieve monthly, weekly or daily actual data from multiple source systems for performance analysis purposes. Pulling this data into the BPM system usually requires the use of an ETL (extract, transform and load) tool. The various analytics that are part of BPM are best performed in a multidimensional environment, which is why many systems utilize online analytical processing (OLAP) to accomplish this. As operational analytics have taken off, the demand for high-performance OLAP cubes has increased. Once the data has been processed by the BPM applications, it needs to be delivered to the end users. A number of BI tools can come into play at this point: portals, dashboards, and report and query tools are the primary ones. Other aspects of business intelligence that play a role in BPM include data cleansingand data quality tools, data integration and metadata or master data management.

The approach to combining BI and BPM varies by vendor. Today, the most common approach, at least for the bigger vendors, is to offer both BPM applications and BI tools. The vendor uses its own tools to build the applications and then makes these tools available to customers to expand the applications beyond what is normally possible with packaged solutions. Our annual BPM Pulse survey highlighted this model as the one most desired by users. Some vendors focus just on the applications and embed third-party BI tools to complete their solutions. Others provide just business intelligence and either partner with an application vendor or target corporate IT departments looking to build their own homegrown BPM solutions.

Based on the results of our annual BPM Pulse survey, our list of the Top Ten BPM Vendors for 2006 breaks down like this:

Vendors of BI tools and BPM applications: Applix, Business Objects, Cognos,Hyperion, Infor Global Solutions and SAS

Vendors of BPM applications: Cartesis, Clarity Systems, Longview and OutlookSoft

At the current level of product maturity with many robust solutions available, very few people are looking to build a custom BPM solution from scratch with standalone BI tools.

A major name missing from this list is Microsoft. The reason is that today they are primarily a tools vendor when it comes to BPM (with the exception of their FRx division), but that is expected to change in 2007 when they start to roll out applications under the PerformancePoint banner.

Many organizations today are looking to improve their overall corporate performance and/or the performance of individual departments. Depending on the specific requirements, some combination of BI tools and BPM applications can help them accomplish these goals. For that reason, both BI and BPM are growing and will continue to show strong momentum for some time to come.

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