History
Reference to non-business performance management occurs in Sun Tzu's The Art of War. Sun Tzu claims that to succeed in war, one should have full knowledge of one's own strengths and weaknesses as well as those of one's enemies. Lack of either set of knowledge might result in defeat. Parallels between the challenges in business and those of war include:
- collecting data - both internal and external
- discerning patterns and meaning in the data (analyzing)
- responding to the resultant information
Prior to the start of the Information Age in the late 20th century, businesses sometimes took the trouble to laboriously collect data from non-automated sources. As they lacked computing resources to properly analyze the data, they often made commercial decisions primarily on the basis of intuition.
As businesses started automating more and more systems, more and more data became available. However, collection often remained a challenge due to a lack of infrastructure for data exchange or due to incompatibilities between systems. Reports on the data gathered sometimes took months to generate. Such reports allowed informed long-term strategic decision-making. However, short-term tactical decision-making often continued to rely on intuition.
In 1989 Howard Dresner, a research analyst at Gartner, popularized "business intelligence" (BI) as an umbrella term to describe a set of concepts and methods to improve business decision-making by using fact-based support systems. Performance management builds on a foundation of BI, but marries it to the planning-and-control cycle of the enterprise - with enterprise planning, consolidation and modeling capabilities.
Increasing standards, automation, and technologies have led to vast amounts of data becoming available. Data warehouse technologies have allowed the building of repositories to store this data. Improved ETL and enterprise application integration tools have increased the timely collecting of data. OLAP reporting technologies have allowed faster generation of new reports which analyze the data. As of 2010, business intelligence has become the art of sieving through large amounts of data, extracting useful information and turning that information into actionable knowledge.
Read more about this topic: Business Performance Management
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