In 2005, BPM Magazine published an article called Standard Setters: Driving Improvements in Business Performance. The article introduced a framework for gathering and integrating performance data; the BPM Framework was developed by a group of consultants, analysts, and representatives of software vendors. Today's software landscape is very different from that of 2005, but business intelligence (BI) and business performance management (BPM) remain hot topics -- and disciplines that are rarely done right.

A November 2007 survey by the Economist Intelligence Unit (EIU), "Business Intelligence: Putting Enterprise Data To Work," found that BI continues to be a major concern for corporate executives. Nearly 80 percent of respondents said that the right BI strategy would significantly improve their ability to react quickly to market changes and would improve customer service, but only 15 percent feel their company has applied best practices in business intelligence. Have the performance management and BI software markets made any progress since March 2005 in terms of providing solutions with demonstrable business value?

From Oracle's perspective, they have. We now see the BPM Framework's best-practice model on the market in real products. Individual components that were available for many years are now part of larger systems. The best of today's offerings comprise fully integrated applications, sitting on a common BI platform and complete with prepackaged hooks into leading transactional systems. They also offer interfaces that extend performance management activities to users outside the realm of the financial analysts.

The BPM Framework's vision of BI integration has come to life amid a landscape of rapid consolidation. A couple of years ago, the three leading BPM and BI vendors began acquiring niche technology providers to round out their performance management offerings; then, over the last six months, each was acquired by an even bigger, transactional system vendor. The driving force behind the acquisitions is that customers began to see connections between BPM solutions and transactional systems such as ERP, customer relationship management (CRM), supply chain management (SCM), and human capital management (HCM) software. Where the transactional systems run the business, the BPM systems enable executives to manage the business by providing information transparency across finance and operations.

BPM customers saw that integrating performance management systems with ERP and CRM could give a vice president of sales, for example, better visibility into her realm, from demand generation to revenue recognition. She could analyze performance trends across regions, products, and time periods against both stated goals and potential, with what-if modeling to project the performance of ongoing sales and marketing tactics. Similarly, integrating BPM with SCM and HCM could allow a COO to monitor employee productivity trends throughout the supply chain, which he could use in activities such as aligning compensation plans to production output and sales performance. As customers began to ask about these sorts of applications of their BPM systems, vendors of transactional systems realized the value of integrating their products with performance management software. The same customers who were buying from the BPM vendors had already invested heavily in transactional systems to improve their operational effectiveness. Customers that went to the trouble of tightly integrating their BPM and transactional systems were seeing benefits, and they wanted to know why they couldn't get a complete solution from one vendor.

As Oracle approached this problem, its executives knew that the fastest way they could deliver a full-featured BPM offering would be to acquire a market leader, so they took the initiative to acquire Hyperion. Subsequently, SAP bought Business Objects and IBM bought Cognos. These acquisitions have dramatically altered the face of the BI and performance management vendor markets. In Oracle's opinion, in fact, they have changed the market so radically that the term "BPM," which tends to focus on the finance department's approach to performance management, should evolve. The companies that have achieved the most success with performance management acknowledge that no one department can completely drive it; they have included the entire enterprise in the project. Thus, we see BPM evolving to EPM, enterprise performance management.