According to Howson (2014), Business Intelligence (BI) is a window to the

dynamics of a business. It reveals the performance, operational efficiencies and

untapped opportunities. BI is a set of technologies and processes that allow people at
all levels of an organization to access and analyze data.
If BI is used effectively, organizations will surely improve their performance.
Practically, performance can be measured by a number of financial indicators, such as
revenue, margin, profitability, cost to serve, and so on. But generally, the impact of BI
in businesses can be difficult to measure because the improvements and factors related
to business performance may not be attributed to the implementation or utilization of
business intelligence. BI can also improve the complex business processes by
simplifying the use of data. Availability of data will enable managers to further analyze
processes which provide value and enhances competencies of a company. Thru BI,
managers can also identify and eliminate process bottlenecks. It can aid the daily
operations of the company by providing access to a more detailed data then reviewing
information necessary to complete an operational task, hence it will help managers in
making sound decisions.
BI provides value to the company because it affects everyone in a firm and
beyond to customers, suppliers, and with public data, to citizens. It can generate value
when it is used effectively by people, without people to interpret the information and
act on it, business intelligence achieves nothing. There is a high correlation between
effective use of business intelligence and company performance. However, simply
having better access to data does not improve the performance of a company; it should
also take in to consideration how they will utilize their data.
A case study done by Hoevar and Jakli (2010) cited that the benefits of
business intelligence are often greater than what appears at first sight. In addition to
measurable and indirectly measurable benefits, it also brings certain benefits that are
difficult to measure or are even immeasurable, as well as some unpredictable benefits

that are only revealed after a certain period of using business intelligence. One of the
key purposes of business intelligence is to improve support for business decisions.
On a more specific level of BI, we have Enterprise Resource Planning Systems
(ERP) that is an operational system tool full of operational and transactional data. It is
used to give an exact view of your business from an operational perspective, but it is
not built to perform trend analyses or give you high-level overviews. It is a tool
centered on delivering operational insights (Prokopec, 2014). Some authors also defined
it as a system that enables an organization to integrate all its primary business
processes in order to enhance efficiency and maintain a competitive position (Kohli,
2006). It is a system composed of core software programs used by companies to relate
information in the business area. ERP programs help to manage all the business
processes within a company, using a common database and shared management
reporting tools (Sandhil, 2013)
Traditionally, the different functional departments of the industries maintained
independent information systems. This triggered the need for the introduction of ERP
systems, which allows a company to unite its information handling. The use of different
information systems also led to data duplication and made databases crowded with
redundant information that took limited available space of hardwares. Systems were not
designed to interface with one another and exchange of information was mostly paper
based which led ineffective management and decision making (Gupta, 2013). The
business environment is dramatically changing. Companies today face the challenge of
increasing competition, expanding markets, and rising customer expectations. This
increases the pressure on companies to lower total costs in the entire supply chain,
shorten throughput times, drastically reduce inventories, expand product choice,
provide more reliable delivery dates and better customer service, improve quality, and
efficiently coordinate global demand, supply, and production. This is the reason why
companies from different industries implement and adopt ERP systems to gain a
competitive advantage promoting an efficient business environment with relevant,
timely and ready-to-access data. (Haft, 2003)

Through the years, the use of ERP systems proved that it eliminates particular
inefficiencies in different industries. It showed a number of benefits from functional
areas adding value to the firm (Gupta, 2013). Using data, Hayes et al. (2001)
investigated the market response to the announcement of an ERP implementation.
They found an overall positive reaction to such announcements. In addition, they found
a significantly more positive reaction when the ERP vendor was a larger provider than a
smaller firm. Hunton et al. (2002) did an experiment with financial analysts, studying
the extent to which investors believed that ERP implementation enhanced firm value.
Analysts overall reaction to such announcements was positive, with higher forecasted
post-implementation earnings and returns. Poston and Grabski (2000), using financial
data, analyzed a group of firms before and after adoption and found no improvement in
general financial performance. However, they also found a significant decrease in the
ratio of employees to revenues in all three years of data and a reduction in the ratio of
cost of goods sold to revenues in the third year. Gupta (2013) analyzed implications of
merging Enterprise Resource Planning systems to Supply Chain Management systems of
pharmaceutical companies. There are many success stories and unfortunately failures
as well. However, if most projects follow some simple guidelines, companies can
increase the chance of success, deliver on time, and proudly involve the relevant group
of users who utilize the system to maximum gain. Some benefits to look forward to
include; (1) Improved efficiencies in business processes, lower costs and improve
productivity. (2) Ability to provide better services to customers, and therefore increase
customer retention. (3) Increased ability to manage resources through a streamlined
process, and in some cases, an automated workflow. (4) Leveraging IT to enhance the
speed of tasks and increase production. (5) Ability to cope with business changes in the
future and to adapt to changing rules and regulation, therefore enabling the
organization to compete more effectively. Hunton et al. (2003) found similar results;
they found that although the financial performance of ERP adopters did not change the
financial performance of non-adopters decrease. It was necessary to implement an ERP
system in order to stay competitive in the market. OLeary (2004) made a study using
companies using ERP and companies that did not adopt in different industries. He cited

43 tangible benefits (e.g. inventory reduction, personnel reduction, productivity

improvement, IT cost reduction, etc) and 70 intangible benefits (e.g. integration,
flexibility, information visibility, customer responsiveness, etc.) in using ERP systems.
There is no doubt that using ERP systems will improve the overall value of the
company, but there are implications that adopting such will be a disadvantage to a
company. Failures in utilizing the ERP systems will result in a huge loss on investment
and may complicate things in the business processes thus incur additional costs. The
top three reasons for the failure of IT-related projects, as cited by IT managers
surveyed by Information Week, were poor planning or poor management (cited by
77%), change in business goals during the project (75%), and lack of business
management support (73%). As a result, most IT-related projects fall far short of their
potential payback, and 26% are canceled before completion. Moreover, in many of the
completed projects, the technology is deployed in a vacuum and users resist it.
Langenwalter claims that the percentage of ERP implementations that can be classied
as failures ranges from 40% to 60% or higher. Failure as an implementation that
does not achieve the ROI identied in the project approval phase has a high failure
rates that ranges 6090% (Umble, 2003).
According to Haft et al. (2003), in avoiding these kinds of failures about ERP
systems companies must know the following critical success factors for ERP
implementation:
1. Clear understanding of strategic goals
2. Commitment by top management
3. Excellent project management
4. Organizational change management
5. Data accuracy
6. Extensive education and training
7. Focused performance measures

These success factors will improve the probability that an ERP system will be expected
as an investment that increases the value of the firm.