Yet more on the use and abuses of the terms BI and PM. Mark Smith of Ventana recently published a note called “BI is Not Performance Management“, and his sentiments were echoed by Jonathan Becher in a note called “BI vs. PM“.
I believe much of the confusion comes from using the same terms to designate both the business goals and the tools, and trying to artificially separate the business goals associated with BI and PM tools.
For example, the notion of “PM technology” is currently vague and confusing — is it the set of any tools that can support the PM business goal, in which case it has to include BI tools (from Mark’s note: “BI can enable and and support performance management”)?, or does it mean the tools that support the PM business goal other than BI tools (again from Mark: “it does no good to confuse two distinct but complementary tools”)?
And I believe it’s very hard to draw a sharp distinction between the business goals of BI and PM. One can try to say the business goal of BI is to make data meaningful in order to “support the business objectives”, while PM is about acting on that information to “improve results”. But of course BI has always been about acting on information and improving what is being measured — what on earth would be the point otherwise?.
The confusion arises because that second part happens without extra technology and is invisible to the IT department, and so is often deemed not “part of BI”. But business people who want self-service access to reports and information do so because they have goals they need to achieve, and — at least in their heads — a notion of what the figures are supposed to be, and will act on any deltas.
Yes, this process can be more or less sophisticated, and require additional technologies (see Jonathan’s table of the presumed differences between BI and PM) but the notion that at a certain level the business goal suddenly changes strikes me as artificial. If anything, there’s a much bigger business distinction between certain types of “BI” reports — e.g. a report that churns out invoices and delivery forms vs a report on customer cross-selling opportunities — than there is between BI business goals and PM business goals
Here’s my attempt to provide clarity and separate business from technology: I believe that organizations have a single business goal — call it, say, “performance excellence” — that covers a spectrum of needs from “what’s happening?” to “what should be happening?”, and which requires what are currently called BI and PM tools.
At the end of the day, we should name categories and distinctions that reflect (best practice) real-life behavior, and companies increasingly have a single business vision of what they’re trying to do, supported by a range of BI and PM technologies that can increasingly be purchased from a single vendor.
The one thing that really is clear is that the debate about what’s BI and what’s PM hasn’t really helped bring clarity for most people — yet another reason to come up with new terms?