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Reality IT:
CPM – Resembles BI 10 Years Ago

online columnist Gabriel Fuchs     Column published in DMReview.com
September 2, 2004
  By Gabriel Fuchs

I would like to thank the vendors who have so many well-chosen phrases for marketing their CPM/BPM/EPM solutions and which inspired this column.

At my job we perform; sometimes well, sometimes not so well. We also try to manage our performance and see who is doing what. When things don't turn out well, we examine not only what we are doing, but also why we are doing it. If something is really important to us - such as our strategy - we try to measure it. We call this performance management. With performance management, the vendors tell us, we will get a "360-degree bird's-eye view and standardized automated monitoring of what is really happening." This will give us "what-if scenarios about win-loss situations from multisourced consolidations that will help us to identify and evaluate the variances in our leveraged consensus-based strategies." Doesn't this sound impressive?

Take things to the next level and we have corporate performance management (CPM) or business performance management (BPM) or enterprise performance management (EPM). There is actually no difference between CPM, BPM and EPM. All these different names are just a sign that many vendors want to seem unique when doing what everyone else is doing. With CPM, we, once again according to the vendors, should now "try to stitch together all our key performance indicators (KPIs) into a holistic process-supported, accountable, fact-based reality, while sharing the tuned drivers and business rules. All in order to improve our imperative bottom line." Another and more direct way to put it would be to say that we want a solution that lets us make more money. Who doesn't?

How do we actually perform all these "pervasive intelligence-based actions" where I work? Well, first of all we stay on a departmental level. This thing about corporate performance management is as likely to succeed on a corporate level as business intelligence (BI) was supposed to have done 10 years ago. When BI came, it was marketed among other things as the solution that would eliminate disparate reports and reporting standards within the organization. However, what often resulted was isolated BI islands and a continuation and even sometimes an increase in the number of reports, analyses and reporting standards. More analyses can be nice, but not when it results in out-of-control situations and multiple departmental analyses of the same information simply because their BI solutions are unable to communicate with each other.

Also, most business activities have data and KPIs that they are alone in working with. It, therefore, becomes extremely difficult to try to settle for one set of key indicators that is applicable to everyone. This kind of problem is not very different from the difficulty of trying to do a data warehouse model that covers the whole organization. Some have actually tried to find a data model that will satisfy everyone. Most of them gave up before finding a working solution. ERP system implementations meet the same difficulties when they try to figure out the business processes of an organization and how they interact. There are many processes and, far too often, they do not interact. Pulling it all together into one unified ERP system is not easy at all. By the way, CPM also relies on processes.

Therefore, the notion of corporate performance management is most likely going to have the same success rate as enterprise-wide BI or as having one single ERP system for the whole organization. It is likely that many organizations will end up with CPM islands just like the BI islands that many have today. Big organizations are simply too complex, especially due to internal politics, to be run by one single system or by a set of universal KPIs.

CPM sounds nice though, i.e., having a single corporate view of what is going on, and it should certainly be the objective of any organization. This way - as we have further understood it from the vendors - "opportunity detection and mission-critical notifications anytime, anywhere, anyhow will become the norm for our relevant actions. The corporate seamless availability of scalable collective business models should help anyone to reach their unambiguously set targets - all through management by exception." Sounds really cool, doesn't it?

Take the CPM/BPM/EPM to the next level and you will have real-time triggers when something happens. This is not new of course, but call it business activity monitoring (BAM) and it sounds cooler. And so, we have gone from BI to CPM/BPM/EPM with a touch of BAM. Are we more intelligent? To me it seems that every new solution demands more resources, as we seem to add this new stuff to older existing solutions, rather than replacing them. Of course, if we want to manage this increased complexity, we shall have to be intelligent. Business intelligence in reality is, therefore, often only for already intelligent businesses. When this is the case, the business advantages can be formidable. Add a touch of the imaginative marketing phrases from the people selling the stuff, and CPM becomes very convincing indeed.


For more information on related topics visit the following related portals...
Corporate Performance Management (CPM).

Gabriel Fuchs is a senior consultant with IBM. His column Reality IT takes an ironic look at what real-world IT solutions often look like - for better or for worse. The ideas and thoughts expressed in this column are based on Fuchs' own personal experience and imagination, and do not reflect the situation at IBM. He can be reached at gabriel.fuchs@ch.ibm.com.

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