How they need to work together to succeed
It’s the dawn of a new decade, and the way businesses function today has drastically changed. Economic uncertainty has elevated the importance of informed decision making. Fundamentally, that means using data to drive that process.
Business intelligence and business performance management are the two tools at your disposal to harness data to make decisions and drive outcomes. But what, actually, is the difference between the two? And which one is the best investment for your business. Here’s the short answers:
- Business intelligence: BI is about looking at the big picture and using data to analyse trends, identify your most important KPIs and derive business strategy using data.
- Performance management: Business performance management is about putting strategy to action, and diving into details in order to understand how specific actions are driving identified goals and outcomes.
While organisations can apply business intelligence daily to decipher big data and analyse customer behaviours, performance management is about helping you create a solid plan and actioning that plan in real-time. Ultimately, both functions are sides of the same coin.
What is really needed are both business intelligence and performance management capabilities within a single system. This is a critical business intelligence trend, and it’s exactly what we set out to build with Loop. Our tool delivers strategic business intelligence analysis, and then helps you put those plans into action with communication, KPI tracking and survey tools.
Here, we are going to explore the differences between business intelligence and performance management in more detail, and then highlight critical components of each that you need in order to deliver a complete system. Let’s begin.
Suggested reading: If you want to learn more about our innovative approach to business intelligence and performance management, check out our eBook — Redefining Business Intelligence for Franchises
What is Business Intelligence?
On a holistic level, business intelligence is all about the accessibility of data. To get ahead of the game, businesses need to have total control over the flow of information. In a data-rich environment, BI assists businesses to analyse complex data and make strategic plans more efficiently and effectively. BI tools like Balanced Scorecards help you strategically focus on the right KPIs and develop key insights which save time, reduce costs and enhance business performance. Further, dashboards, summaries, integrated infographic reports, and maps are all a handful of ways BI software boosts business performance.
The ability to select KPIs, monitor them in real-time, and even go as far as to help in the decision-making process is another reason why business intelligence is so critical to strategic decision-making.
Pros of business intelligence
- Real-time data analysis: Business processes have become complex and the need to make quick decisions with real-time data is vital. Business intelligence delivers data quickly and focuses users on the information they need to make decisions in near real-time.
- Tracking KPI simplified with BI: Key performance indicators change as business goals evolve. Business intelligence helps keep constant track of your current KPIs and measure performance constantly. It minimises excess information flow and delivers suggestive information of the metrics that matter most to your business both in the short and long term.
- Easy to analyse data: With BI, you leave spreadsheets behind and can access data visualisation tools like maps and interactive charts to improve analysis and communication across multiple levels of an organisation.
Cons of business intelligence
- Limited support to action decision: To generate quantifiable data, the integration of business analytics at every level of the business is paramount. Where BI will guide you through the process of making a sound plan, traditional BI tools don’t help you communicate actions or track progress against that plan.
- Limited capabilities unless integrated: BI can track, measure, and assist you in analysis but cannot generate outcomes. Even the best BI tool is limited until it is integrated with performance management that communicates the plan throughout the business and allows you to take actions based on decisions.
- Complex and technical interfaces: Business intelligence tools are generally built for technical users. Deep-dive analysis is done by specialists (for example, in a head office) and it can be challenging to then disseminate that information to users who need to take actions. It also limits the ability for wider business functions to use BI tools on-demand and create siloed workflows.
What is business performance management?
Business performance management is all about helping you execute a plan. It provides tools to communicate, track and assess actions and results on a business-wide and individual level.
It’s important to note, however, that “business performance management” is a subtly different term than “performance management”. Most performance management tools are HR software focused on developing individual employee performance. Although there is crossover with business performance management, the latter is far more about assessing results on a business-level, and sits more comfortably in the same context as BI than the former.
Fundamentally, you need business performance management to deploy the plans developed using business intelligence, and track and measure the outcomes from them. But a performance management system on its own won’t be of much use in helping you develop a plan in the first place.
Pros of business performance management
- Centralisation of information: Using business performance management, organisations can plan a centralised strategy that’s easy to communicate within the different levels of management.
- Track results against set goals: Business performance management provides a comprehensive narrative of the overall business performance, effectiveness of the set KPIs, and the impact on the business goals.
- Continuous performance enhancement: You can set reminders, alter KPI tracking and compare data from present and past performance to optimise your strategy and continuously enhance your business performance.
- Accessible by everyday users: Unlike business intelligence, most business performance management tools are built for everyday users. Simpler and easier to configure views provide access to a wider range of businesses users, and allows performance management to easily become embedded across your organisation.
Cons of business performance management
- Limited strategic vision: If you cannot visualise how your strategies are going to fare, how can you make a sound business decision? This is where BI plays an insightful role in providing crucial analytical data.
- Time-consuming: Performance management tools often lack instant reports or analyses. It takes time for businesses to analyse data coming from PM software and reporting can be hectic.
Harnessing the best of both
A modern-day business needs the capabilities of business intelligence and performance management software. BI helps to analyse reports on an ongoing and strategic level in order to make critical business-level decisions. Business performance management adds action to this data and turns it into an achievable goal for employees.
The problem is that using two different tools silos your data. A significant performance management and business intelligence trend is the amalgamation of both capabilities within a single platform. Achieving this goal was a specific reason we developed Loop. As an example of what this type of hybrid tools can offer, a few features unique to Loop include:
- Enhanced dashboards: You get access to data visualisations and cataloguing tools that make it easy to look at the right data at the right time, and share that information with the people who need it most.
- Action planning: Our action planning feature lets you assign specific tasks to individuals, and then track performance against designated KPIs.
- Balanced scorecards: Strategic analysis is enabled by a balanced scorecard approach. Measure both the efficiency and inefficiency of strategies and track every aspect of the business process on multiple levels through balanced scorecards.
- Instant feedback: Want to know how employees fairs and stakeholders feel? Build and send surveys anytime from anywhere.
- Strong customer support: Errors and issues are part of the road to success. That doesn’t mean it should stop you at any point. We provide round-the-clock customer support so your business never has to pause.
- Integrate data in real-time: We monitor, analyse, report, and integrate every piece of data, combining the efforts of both BI and PM to deliver a comprehensive support system to our customers.
The future requires hybrid answers
The best business intelligence and performance management tools provide a set of hybrid capabilities. Understanding and integrating the complexities of big data with the efficiency of business performance is the way forward. We need to contemplate what matters the most to us — while preserving the more vital aspects of the business.
Providing these capabilities is exactly what Loop was built to deliver. You get an interface that integrates BI and PM to identify and extract what’s slowing down your business process. Using the blend of the two, we enable you to develop an internal business process that’s strategically rich and delivers context to improve employee performance. The outcome is an ability to identify and prioritise problems, and communicate solutions using an intuitive and non-technical interface that provides access to business intelligence and performance management capabilities across your entire organisation.
From our comprehensive dashboards and balanced scorecards to round the clock customer support, we leave no stones unturned in providing our customers with every essential tool for a successful business — the ability to take consequential action and uplift business communication. Get in touch if you want to learn more or book a demo today.
