?PM – Performance Management Acronyms Galore…

The IT industry has always been fond of jargon and, especially, TLAs (Three Letter Acronyms, for the uninitiated!) The area of Performance Management is no exception.  This short article seeks to clarify some of the confusion around the prevalence of different terms and acronyms, many of which mean much the same thing.

Performance Management – BPM, CPM or EPM?

Before we discuss the different acronyms, what do we mean by Performance Management? Performance Management is an umbrella term encompassing the systems, metrics and related processes and methodologies used to measure and manage performance – this typically encompasses activities such as Budgeting, Forecasting, Financial Reporting (Statutory and Management), Scorecarding, and all the reporting and analytics functionality required to support and enhance these offerings.
Until recently (April 2007), it has not included traditional transactional systems (the ledgers, payroll, procurement, billing systems, point-of-sale, etc). This, however, is changing as Oracle re-defines EPM to encompass the ERP system(s) as well as 'traditional' financial Performance Management and Operational BI.

What about the acronyms?

As is often the way, different companies and organisations have, over the years, come up with competing acronyms to describe what is actually the same thing.

CPM - Arguably first off the blocks were Gartner, with the term Corporate Performance Management (CPM).  Gartner are probably the most well-respected analyst organisation reporting on the state of the market in CPM.  Their ‘magic quadrants’ for CPM and related areas are widely quoted when comparing software vendors and the state of the market overall.

BPM - Hyperion, the market-leader in the field, coined the term Business Performance Management (BPM). One of the biggest hurdles to overcome in enabling this term to become a widely used standard is that it frequently gets confused with Business Process Management. Business Process Management is a field on the overlap between Management Consultancy and IT systems, dealing with the design, implementation and control of business processes, whether they involve people, companies, systems, documents or all of the above. Whilst the proper implementation of Performance Management solutions almost invariably requires changes to business process, these two fields are not the same – but they are close enough that the identical acronym is a recipe for confusion.

EPM – Enterprise Performance Management, another variation on the theme, has appeared from various sources – one of these, PeopleSoft (the ERP vendor with particular strength in HR solutions), was acquired by Oracle in 2005 – it is no doubt partly for this reason that EPM has now become the Oracle term of choice for the area. This is re-inforced strongly following Oracle’s acquisition of Hyperion – the market-leading Performance Management software from Hyperion will become part of Oracle’s extended Enterprise Performance Management offering.

So Who Wins?

Oracle's acquisition of Hyperion is bound to result in a gradual switchover from the term BPM to EPM. This will happen very quickly in the marketing material, but may take a bit longer given that the term is so embedded in Hyperion's System 9 application suite (for example, the new common hierarchy and data flow manager in version 9.3 is called BPM Architect).
Here at ReportSource, you will now find us for the most part using the term EPM, although sometimes we'll just refer to Performance Management or even, following Oracle and Hyperion's lead recently, The Management System.

So What about BI then?

This article has not yet talked about the term Business Intelligence (BI). When we discussed Performance Management earlier, we mentioned almost as an aside ‘all the reporting and analytics functionality required to support and enhance these offerings’, in other words, good old-fashioned BI. It was no accident – as powerful as these reporting and analytics tools are, they have become something of a commodity offering, with a number of strong vendors in this field, some of whom also compete in the more specific Performance Management territory.

However, with Oracle's new expanded definition of Enterprise Performance Management, Operational BI is one of the three major components of EPM (along with ERP and financial Performance Management systems). In this context, Operational BI refers not just to the reporting tools themselves, but to the overall reporting and analytics environment sitting above operational systems such as CRM, Billing etc, including the data marts or warehouses that provide an analytical view of the transactional data stored in these systems.

Conclusions

All this goes to show that nothing is static in the world of systems and technology. Different vendors and analysts change the terminology landscape as the technology progresses, or the marketing departments come up with a new slant on an existing concept. If you'd like to keep up-to-date, please make sure you are signed up to ReportSource’s EPM Communities so you can continue to receive our newsletters keeping you informed about the ongoing activity and changes in the world of Performance Management.