As Published In
Oracle Magazine
July/August 2008

COMMENT: Analyst's Corner


Analyzing Performance

By David Baum

Companies plan ahead with enterprise performance management.

John Hagerty, vice president and research fellow at AMR Research, talked to Oracle Magazine about current trends and strategies in business intelligence (BI) and enterprise performance management (EPM).

Oracle Magazine: What is enterprise performance management and how does it relate to BI in general?

Hagerty: Broadly speaking, BI tools provide insight and visibility into what's happening within your business. Enterprise performance management applications put BI tools into a planning context. They help you set goals and measure progress toward those goals, to make sure that you're shooting in the right direction.

A lot of companies use the term enterprise performance management to describe a command-and-control philosophy: "What are we going to do and how are we going to get there?" BI is more about sense and respond. You evaluate progress and use information about what's happening in the business to make corrections.

For example, if you're examining sales versus forecasts, that is primarily a BI application. If you're setting goals and strategies for the firm, and devising a concrete plan for how you'll get there, that typically involves EPM.

Oracle Magazine: What types of tools do organizations use to develop their BI and EPM applications?

Hagerty: Business users don't always distinguish which technologies are in play. They simply want information in the context of what they do, whether that means a dashboard, a report, a query, or a predictive analytic component. They don't want complex tools. They just want answers.

Oracle Magazine: Do EPM systems primarily analyze operational data, or do they access historical information?

Hagerty: Today, EPM applications generally don't look at detailed operational data. Instead they look at summary data and key metrics about how the business is operating, with a focus on financials. But we do see more companies expanding EPM beyond traditional boundaries and constructing targeted operational performance applications to optimize results in specific disciplines within the enterprise, including supply chain, workforce, and customer service.

The more insight a business wants to gather, the more detailed information they go after. They start with summary data and drill down to derive extremely granular information to refine their decision processes.

Oracle Magazine: Are there any BI trends or developments that CIOs in today's forward-thinking companies should be aware of?

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Hagerty: As a result of steady consolidation in the BI marketplace, vendors such as Oracle are constructing enterprise platforms that include middleware, applications, and BI performance management capabilities. These platforms are built on a common architecture that can traverse a lot of different business requirements. Ultimately these broad IT architectures help customers reduce total cost of ownership because they are dealing with one platform instead of two or three or four.

Oracle Magazine: Do today's enterprise BI platforms enable any new types of BI capabilities?

Hagerty: In some cases they are enabling more-comprehensive decision-making capabilities. BI has typically had a backward-facing role—tell me where I've been and tally the score—primarily analyzing historical performance. Now we are starting to see pervasive BI applications that delve deep into the operations of the company. We're especially seeing this phenomenon in manufacturing and retail, where the agility of the supply chain can make or break the performance of the business. In these cases, pervasive BI extends not only deep within the business, but also outside the four walls as these companies pull partners into the BI environment.

Oracle Magazine: What do you see as the future of BI?

Hagerty: The term BI is now loosely applied to a lot of different things. Buyers will tell you that BI means query and reporting and analysis. But the technology is spreading its wings, and it is now applied to domains such as access to operational information. Whether you call it pervasive performance management or operational BI, it's basically the same thing. This is the next logical area of investment for a lot of companies, and many of them want to standardize on a common backbone for analytics and reporting.

 


David Baum (david@dbaumcomm.com) is a freelance business writer based in Santa Barbara, California.

AMR Research



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