What’s the Difference Between Business Intelligence (BI) and EPM?

What’s the Difference Between Business Intelligence (BI) and EPM?

What’s the Difference Between Business Intelligence (BI) and EPM?

I haven’t been asked this question in a while, so maybe this is a good time to revisit these terms and technologies, what makes them different, and how they complement each other.  So here goes.  

Although there were some earlier usages, business intelligence (BI) as it’s understood today evolved from the decision support systems (DSS) used in the 1960s through the mid-1980s.  Then in 1989, Howard Dresner (a former Gartner analyst) proposed "business intelligence" as an umbrella term to describe "concepts and methods to improve business decision making by using fact-based support systems."  In fact, Mr. Dresner is often referred to as the “father of BI.”  (I’m still trying to identify and locate the “mother of BI” to get the full story.)

The more modern definition provided by Wikipedia describes BI as "a set of techniques and tools for the acquisition and transformation of raw data into meaningful and useful information for business analysis purposes."  To put it more plainly, BI is mainly a set of tools or a platform focused on information delivery and typically driven by the information technology (IT) department.  The term “business intelligence” is still used today, although it’s often paired with the term “business analytics,” which I’ll talk about in a minute.

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In the early 1990s, the term “business performance management” started to emerge and was strongly associated with the balanced scorecard methodology.  The IT industry more readily embraced the concept around 2003, and this eventually morphed into the term “enterprise performance management” (EPM), which according to Gartner “is the process of monitoring performance across the enterprise with the goal of improving business performance.”  The term is often used synonymously with corporate performance management (CPM), business performance management (BPM), and financial performance management (FPM). 

These slight variations aside, the concept of performance management, in a business enterprise, is a set of processes and applications that help the enterprise link strategies to plans and execution in a continuous management cycle in order to achieve desired goals and objectives.  An EPM suite or platform typically includes prebuilt applications and tools to address the key steps in the performance management cycle:

BI tools play an important role in the EPM process and system, enabling the organization to package and deliver financial and operational performance results to managers, the CEO, the board of directors and other stakeholders.  The results can be delivered in a variety of formats:

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EPM processes and systems are typically driven out of the Finance organization and can extend into business operations.  In fact, while all of the terms mentioned earlier (EPM, BPM, CPM, FPM, etc.) generally denote the management process I described earlier, there are some subtle differences intended in the definitions.  CPM and FPM were intended to focus specifically on these processes as they relate to the office of Finance.  BPM and EPM, on the other hand, were intended to signify a more enterprise-wide approach to performance management.

 



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