We often get asked by Microsoft Dynamics and other ERP Customers,
“Can I do my budgeting and forecasting with Power BI?”
The Short Answer is No
This begs the old question - what is the difference between Corporate Performance Management (CPM) and Business Intelligence (BI) - CPM vs BI.
What is Business Intelligence?
Business Intelligence products like Power BI, Tableau, Qlikview and Domo are Data Visualization tools. These business analytics applications provide interactive visualizations with self-service business intelligence capabilities, where end users can create reports and dashboards by themselves, without having to depend on information technology staff or database administrators.
Where Business Intelligence tools fall short however, is in explaining the reason behind the data they are depicting. “It doesn’t tell you what to do,” said Michael F. Gorman, Professor of Operations Management and Decision Science at the University of Dayton to CIO Magazine. “It tells you what was and what is.” Essentially, BI tools are descriptive in nature - they may describe a current or past state but they are not designed to help users discover the reason behind their numbers and perform deeper analysis beyond visualizations. BI products don’t help to gather or consolidate data especially when it comes to planning, budgeting & forecasting. Instead, companies turn to a different type of tool for data gathering, consolidating and analysis - CPM.
What is CPM?
Corporate Performance Management (CPM), also known as Enterprise Performance Management (EPM), are used to gauge how a business performs. Gartner details it as, “an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise.”
CPM tools take your business information to the next level, monitoring and tracking the progress of your business based on historical data, planned & forecasted information and actual results. So, rather than reporting on the here and now, which is what most BI systems do, the right CPM solution analyses not only how your business has performed, but also how it’s currently performing and how it is very likely to perform in the future. CPM systems can help manage performance by analyzing data from across the business against a defined set of KPIs to better plan and forecast the strategic direction of your company as a whole.
Designed for accounting and finance processes, CPM tools drill down into financial and operational analysis, linking key financial data to specific objectives and monitoring performance and highlighting where potential risks might lie. CPM puts data into context, explaining what the facts and figures actually mean for the future of the business, presenting an accurate picture of today’s business performance alongside a future forecast. For business leaders this level of insight into future performance is crucial to driving business growth.
Here’s a look at Limelight in action, a modern cloud-based CPM platform.