How BI and CPM work together
25 February, 2022
Making informed decisions in an increasingly complex and ever-changing world is crucial for companies. Good decision-making should involve more than just good judgement and strong intuition. It also requires data-based insights. Effective decision-making must be based on data analysis, planning, as well as the execution and evaluation of decisions and their predicted impact. Information systems provide different tools to support decision-makers within a company. Business Intelligence (BI) and Corporate Performance Management (CPM) aim to support effective decision-making.
Almost all companies manage to collect data in some kind of operational system. However, data is only useful when it is aggregated and analyzed to obtain valuable insights. BI comprises strategies and technologies used by companies for data analysis, which can help companies make more data-driven decisions. BI is a general term that covers the processes and methods of collecting, storing, and analyzing data from operations or activities to optimize performance.
BI technologies include reporting, analytics, dashboard development, processing, performance management, predictive analytics and prescriptive analytics. These technologies can handle large amounts of structured and sometimes unstructured data to help identify, develop, and otherwise create new strategic business opportunities. They aim to allow direct interpretation of large data sets.
BI is continually evolving according to companies’ needs and technology. AI and machine learning will continue to become more important and generally adopted, and companies can integrate these AI insights into broader BI strategies. As companies strive to become more data-driven, efforts to share data and collaborate will increase. Data visualization will become essential for collaboration across teams and departments.
Corporate Performance Management
CPM is a set of business practices, processes and tools that enable companies to better plan and evaluate their strategic goals and their tactical execution to track company performance and success.
BI and CPM
The core purpose of CPM and BI is the same – to improve company processes. However, BI – particularly the data collection within BI – builds the foundation for CPM. BI deals with techniques and tools to transform raw data into meaningful information, while CPM focuses more on comparing the data against set benchmarks and predict future performance.
Most CPM solutions include data collection and consolidation. BI systems support great insights into data analysis, but they are usually not designed to support planning and forecasting. CPM platforms use this BI analysis for planning and forecasting. CPM solutions can read data from various systems (such as BI systems) and use this information for smarter planning.
A comprehensive CPM solution supports several planning methods and needs, forecasts, and allows different types of data analysis. While a properly equipped CPM solution will have built-in BI capabilities that meet some BI needs, it cannot completely replace a complete BI solution. BI systems cannot fully replace CPM solutions since they do not have planning capabilities. Companies in any sector looking to improve their planning processes need to consider how to optimize a combination of BI capabilities with a modern CPM solution tailored to meet their unique needs.
The Financial Navigator provides this combination of BI and CPM systems through data analysis as well as planning and forecasting capabilities. The Financial Navigator is an all-in-one software solution dedicated to simplify the financial management of Mid-Caps and SMEs. The Financial Navigator aggregates and analyzes all relevant financial data, creating transparency for decision-makers. Users benefit from real-time Cash Management, centralized payments, reliable Cash Flow Forecasting, intuitive Business Planning and ad-hoc Analytics.