Azizah Ahmad
Department of Applied Science Universiti Utara Malaysia 06010 UUM Sintok +604-928-4762
Norshuhada Shiratuddin
Department of Applied Science Universiti Utara Malaysia 06010 UUM Sintok +604-928-4700
azie@uum.edu.my ABSTRACT
Business Intelligence (BI) as a concept is not a new phenomenon. It has been widely emphasized in the strategic management literature as an essential competitive tool, while IT related literature stresses on technical advancement of BI tools. However, deployment of BI in organizations, which involve IT systems and other organizational resources to manage knowledge strategically that would lead organizations to sustain their competitive advantage, is not well explained. While the literature on BI covers various issues especially on technical aspects, it lacks comprehensive studies of successful BI deployment and its relationship with organizations sustainable competitive advantage. This paper attempts to highlight these issues in the context of Telecommunication Industry. A qualitative field study in Malaysia is undertaken in this research, where all of four telecommunication services providers, in various levels of BI deployments, are studied. The study is conducted via interviews with key personnel, whom are involved in decision-making tasks in their organizations. Contents analysis is then performed to extract the factors and variables and a comprehensive model of BI for Sustainable Competitive Advantage is developed. The results of the interviews identify nine major variables affecting successful BI deployment as; Quality Information, Quality Users, Quality Systems, BI Governance, Business Strategy, Use of BI Tools, and Organization Culture. BI is believed to the main source for acquiring knowledge in sustaining competitive advantage.
shuhada@uum.edu.my
therefore, the future. In todays business competitive environment, the deployment of business intelligence (BI) as a competitive tool is increasing and the demand for BI in market is stronger than ever before. This is evidenced through BI being in the list of top ten CIO priorities according to a Gartner survey in 2004 [35]. In addition, a survey of 225 Fortune 500 companies in 2001 reported an increasing use of computer-based systems in BI programs [16] and the BI software industry has grown from over US$2 billion in 1998 to US$4 billion in 2004. This new trend has called firms attention to the importance of deploying a successful BI and its role in creating and sustaining competitive advantage due to its knowledge creation capabilities [9, 20, 14, 13, 5, 10, 36; among many others]. Although BI has been studied widely over the last several years, literature suggests that there is a scarcity of empirical studies on successful BI deployment. Like any other information systems, the success of BI deployment depends on its effective use by the users. A number of case studies are available in the literature which present success and failure factors of BI initiatives. However, no comprehensive study on the successful BI deployment found in the literature. What must be done to develop or adopt BI? What factors are important in deploying BI? These are natural questions to investigate in the context of BI development and deployment. This paper investigates the above questions in the context of telecommunication industry in Malaysia. Basic premise of the study is the extensive literature review on the deployment of BI-related applications. The primary objectives of this paper are two-fold: i) To identify the factors in ensuring successful BI deployment in Telco industry in Malaysia ii) To explore and develop a model of BI for Sustainable Competitive Advantage
Keywords
Business Intelligence; Successful BI Deployment; Sustainable Competitive Advantage; Telecommunication Industry; Qualitative Method; Content Analysis
1. INTRODUCTION
What enables the wise sovereign and the good general to strike and conquer, and achieve things beyond the reach of ordinary men, is foreknowledge --- Sun Tzu, the Art of War The above quote highlights that acquiring and utilizing knowledge in sustaining competitive advantage is not a new phenomenon. Human civilizations have been preserving and passing knowledge from generation to generation for better understanding of the past and Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. BIDW Conference 2010, May 1718, 2010, Singapore. Copyright 2010 BIDW
2. LITERATURE REVIEW
The term business intelligence has been used in many studies. However there is no conclusive definition of BI so far. Gartner first coined BI term in 1996 and popularized by analysts Howard Dresner, which generally refer to the process of turning data into information and then into knowledge [20, 14]. BI is further defined as the ability to access and analyze information as needed and to utilize this information to make sound business decisions [13]. Bernstein et al. [5] defined BI as the utilization of high-level software intelligence that can help organizations to achieve sound business decisions. Chung et al. [10] and Liebowitz [20] put forward the idea that BI enable organizations to understand their internal and external environment through systematic acquisition, collation, analysis, interpretation and exploitation of information in the business domains. Vedder et al. [36] claimed that BI is also known as Competitive Intelligence, which comprises of process and product. BI is defined as a process which is the set of legal and
Annual International Academic Conference on Business Intelligence and Data Warehousing (BIDW 2010). Copyright GSTF 2010. ISBN: 978-981-08-6308-1. doi:10.5176/978-981-08-6308-1 38
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ethical methods used to harness information in achieving success, while as a product BI is the information about competitors activities from public and private sources comprising the present and future behavior of competitors, suppliers, customers, technologies, acquisitions, markets, products and services, and the general environment. Bergerou [4] later related BI to a process that increases the competitive advantage of a company by intelligent use of available data in decision-making. potential policy lapses [12] and Healthcare for customer analysis [33] and pharmaceutical R&D supply chain [1]. From the various BI terms defined above and the utilizations in different industries, the emphasis of BI is towards turning available data into the actionable knowledge needed for sound business decision-making, which is relevant to this study. It is argued that knowledge generated from successful BI deployment can be used to sustain competitive advantage of a firm. Unfortunately, in the area of successful deployment of BI, most of the research available focused on the technological and operational aspects. There is very little research, which considers the factors in the managerial and strategic levels. Therefore, the study on antecedents of successful BI deployment that will lead to sustainable competitive advantage is of utmost importance.
2.2.1
Antecedents of BI Deployments
Potential antecedents of successful BI deployment based on specific BI literature have been defined for the purpose of this study. Antecedents are based on Resource-based Theory [3], which considers firms internal unique resources in deploying BI. These resources include firms assets, skills, knowledge and ability that will play important roles in BI deployment. There are four antecedents considered in this study, namely Quality Information (QI), Quality User (QU), Quality Process and BI Governance (BIG). These resources will influence firms successful BI deployment, which will help in making sound business decisions. First of all, BI can only be deployed successfully if users can perceived its full potential [37] and these potentials are categorized into tangible and intangible benefits. The most tangible benefits are time saving and more and better information. The latter includes better decisions, improved business process and support for the accomplishment of strategic business objectives. In a recent study, Nelson et al. [26] added that successful adoption of IS is largely based upon quality, satisfaction and usage. Based on context-based view, information quality is taken to be the most important, which is described as the usefulness of the information in decision-making. The context-based view expands the dimension of information quality beyond accuracy to include dimensions such as relevance, completeness, currency and format. Dijcks [11] and Jarke et al. [19] added that information quality aspect is often ignored in BI implementation and suggested a methodology for embedding data quality into overall BI architecture. BI can only delivers value if the users are capable of utilizing information gained and turn them into sound business decisions [2]. Therefore, quality users with different set of skill such as technical, business and analytical are needed in order to perform necessary tasks. Avery and Watson [2] defined 4 types of users: (1) power users, (2) business users, (3) technical users, and (4) executives where they have different needs and tasks that are categorized into strategic, tactical and operational. Imhoff and Pettit [18] suggested realizing the different types of analyses and grouping them with similar characteristics can gain a valuable head start in understanding, anticipating, and satisfying their needs. Another important aspect of BI deployment is BI Governance [21], which is defined as defining and implementing an infrastructure that will support firms goal. The infrastructure includes the hardware, software, staffing and strategy needed to glean intelligence from data. Moss [23] put forward the idea of the alignment between business and IT in BI governance and suggested that successful BI deployment are initiated and driven by business rather than IT. Sherman [32] suggested that BI steering committee should be formed in order to sponsor and govern design,
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development and deployment of BI project. It needs both the Chief Information Officer (CIO) and a business executive, such as Chief Financial Officer (CFO), Chief Operations Officer (COO), or a senior Vice President of marketing/sales to commit budget, time, and resources. Users training and support play an important role in BI Governance. Training would include all level of users that differs in their tasks and responsibility about data and information needs in organizations [2]. their responses are on voluntary basis. Table 1 below provides a brief overview of the participants in four Telco organizations who take part in the field study. Table 1. Demographics of the Participants
COMP. A (Govowned) PART. P1 P2 P3 PARTS POSITION General Manager Manager Chief Financial Officer Senior Vice President Senior Manager Manager Manager Chief Principal Engineer Principal Engineer Manager PARTS EDUCATION PhD Masters Degree Bachelor Degree Bachelor Degree Masters Degree Bachelor Degree Bachelor Degree Bachelor Degree Bachelor Degree Bachelor Degree BI USE High Medium Low
2.2.2
Other Factors
Apart from above mentioned antecedents, Organizations culture also plays an important role in BI success [23]. Large percentage of BI applications fails not because of technology but organizational culture and infrastructure dysfunctions. Firms that instill the right organizational culture are foreseen to be successful in deploying BI initiatives. Creating a learning organization culture has become an important strategic objective for many firms that hinges on the acquisition of information [7]. Weir [38] added that knowledge sharing culture is also critical in ensuring the success of BI deployments. For BI to work, the entire organization must participate in intelligence gathering and sharing. Utilization of BI tools is also been mentioned in literature as an important criterion in deploying and using BI. Carvalho and Ferreira [8] and Chung et al. [10] defined two classes of BI tools. The first class of tool is used to manipulate massive operational data and to extract essential business information. Examples include Decision Support Systems (DSS), Executive Information Systems (EIS), Online Analytical Processing (OLAP), data warehouse and data mining systems. They are built from database management systems (DBMS) and are used for query and reporting, statistical analysis and to reveal trends and patterns that would otherwise be buried in their huge operational databases [22]. BI tools now have additional functions of forecasting capability that uses mathematical formulas to manipulate historical data [31 and prediction capability [6]. The second class of tools, sometimes called competitive intelligence tools, aims at systematically collecting and analyzing information from the competitive environment to assist organizational decisionmaking. Rao [27] claimed that a combination of BI and data warehouse technologies provide the flexibility to support a dynamically changing competitive environment. However, the factors mentioned above are not empirically tested in the BI literature. Therefore, this calls for further empirical study to assess the factors affecting the successful deployment of BI, especially in Telco industry.
B (Private Merger)
P4 P5 P6
C (Private) D (Multinational)
P7 P8
P9 P10
High High
RESEARCH METHODS
The paradigm of the research is qualitative, in which field study is used as a research method. The field study is appropriate in this context since we are exploring the real industry involved in BI deployment. A convenience non-random method is employed in choosing the samples for the data collection. Semi-structured interview is then performed in getting the required data. The details of our field study are presented below.
3.1 Sample
A convenient non-random type of sampling is used to select 10 executives in all of four service providers in Malaysian Telecommunication industry. According to Zikmund [40], convenience sampling is always undertaken in business research. The main criterion of sample selection is based on their involvement in decision-making and their level of utilizations in BI initiatives. All of the participants are selected based on personal contacts and
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where every single word and sentence is reviewed to uncover key patterns or themes (Step A2). Keywords or phrases are produced at this stage in order to be used later (Step A3). The key words or phrases are given labels or categories (Step A4). High-level factors and corresponding variables are identified. The relationship between factors from each script is identified next (Step A5). A deductive process is performed here where the identified factors are matched with the ones found in the literature previously (Step A6). These factors are revised and updated accordingly without scarifying any factors and variables obtained from the interviews (Step A7). Tables of factors, variables and their links are finally developed for each interview (Step A9). The main aim of the second phase of the content analysis is to develop a finalized BI model based on the factors, variables and links that have been identified in the previous phase. The best way to do it is to integrate all the information gathered so far into one single entity. As shown in Step B1, the similarities and differences of variables under each factor are identified. A mathematical union concept is used at Step B2 in integrating the similar variables. The new combined variable is given a new name and unique variables are retained (Step B3). The same union concept is used to integrate the links among the factors (Step B4). Then, Step B5 developed the final tables of factors, variables and their links. Finally, the new combined BI model is developed.
Step B5. Develop finalized tables of factors, variables and their links
Figure 1. Content Analysis Process All the interview transcripts are first carefully analyzed manually (Step A1). An inductive process is first performed on the transcripts,
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Accuracy, Govern Design, Development and Deployment of BI, User Training and Support, Online Real-time Capability, Fully Integrated to Various Data Sources, Warehouse Concept, Satisfied Users, Good Reporting Features and Reviewed Regularly and they are called major significant (not in statistical sense) variables. The responses from the participants confirm the influence of the firms internal resources factor of Quality Information, Quality Users and Effective BI Governance. Variables Accuracy, Accessibility, Completeness and Currency under Quality Information factor receive majority responses by participants. So do variables Technical Skills, Business Skills and Analytical Skills under Quality Users factor and variables Govern design, development and Deployment, User Training, Retraining & Support, Enforcement and Top-Down Directive and Management Support under Effective BI Governance factor. However, there is limited support for the influence of Quality Process Flow although this construct is identified as important factor in the deployment of BI initiatives and IT systems in general [28]. Only two participants, a network manager and a principal engineer from leading Telco Company, mention this factor. There are also very strong supports from amongst the participants for the factor of Usage of BI Tools. In order to successfully deploy BI in organizations, the knowledge acquiring tools of data mining and OLAP are indeed necessary. These tools are considered cant live without by some of the executives in performing their on-going managerial tasks such as performance monitoring, customer profiling, revenue and network forecast, among many other usage. Organizational Culture is one of the most significant variables affecting successful IT and other related technology. In a fast moving world, a culture of learning organization is utmost important where knowledge workers in organizations have to keep up with others especially on new technological inventions and innovations. They also need to acquire the sense of business competition culture in order to stay ahead of the competition. can be used as a guideline for technology vendors in determining which tools are the most beneficial especially in Telco environment.
Quality BI Information
Quality BI Users
Successful
Quality BI System
BI Deployment
Use of BI Tool
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as business analysts and decision makers can also use the model to refine their thinking about BI and their firms other strategic resources. The model will suggest the types of BI investments that are most likely to be the sources of sustained competitive advantage. Our immediate future plan is to study the model further using a structural equation modeling approach. This part of the research will use a quantitative approach, which will test a number of hypotheses and the model itself. Proceedings of the 7th ACM International Workshop on Data Warehousing and OLAP, November 12-13, 2004, Washington, DC, USA. [16] Grooms, T. F. (2001), Marketing Intelligence: Executive Management Perceptions of Value, PhD Thesis, Brunel University, United, Kingdom. [17] Hilty, D. P. (1967), International Business Intelligence For Monitoring Foreign Currency Instabilities, PhD Thesis, California State University, USA. [18] Imhoff, C., & Pettit, R. (2004), The Critical Shift to Flexible Business Intelligence: What Marketers Wants-and-Needs from Technology, Intelligent Solutions, Inc. Retrieved: 19 April 2005 from http://www.intelligentsolutions.com [19] Jarke, M., Jeusfeld, M. A., Quix, C., & Vassiliadis, P. (1999), Architecture and Quality in Data Warehouses: an Extended Repository Approach, Information Systems, 24(3), 229-253. [20] Liebowitz, J. (2005), Business Intelligence Cannot Exist Without Knowledge Management. Retrieved: 16 April 2005 from www.buisnessinteeligence.com [21] Matney, D., & Larson, D. (2004), The Four Components of BI Governance, Business Intelligence Journal, 9(3), 29-36. [22] Miller, T. W. (2005), Data and Text Mining: A Business Applications Approach, Prentice Hall, New Jersey. [23] Moss, L. T. (2005), Organizational Barriers to Business Intelligence, Retrieved: 16 April 2005 from www.buisnessinteeligence.com [24] Mustonen-Ollila, E., & Lyytinen, K. (2003), Why Organizations Adopt Information Systems Process Innovations: a Longitudinal Study Using Diffusion of Innovation Theory, Information Systems Journal, 13, 275-297. [25] Nadeem, M., & Hussain Jaffri, S. A. (2004), Application of Business Intelligence in Banks (Pakistan), CORR the Computing Research Repository, June 2004. [26] Nelson, R. R., Todd, P. A., & Wixom, B. H. (2005), Antecedents of Information and System Quality: An Empirical Examination Within the Context of Data Warehousing, Journal of Management Information Systems, 21(4), 199-235. [27] Rao, S., & Swarup, S. (2005), Business Intelligence and Logistics. White Paper by Wipro Technologies. Retrieved: 19 April 2005 from http://www.wipro.com/ [28] Ravichandran, T., & Lertwongsatien, C. (2005), Effect of Information Systems Resources and Capabilities on Firm Performance: A Resource-based Perspective, Journal of Management Information Systems, 21(4), 237-276. [29] Rogers, E. M. (1995), Diffusion of Innovation, 4th Edition, the Free Press, New York. [30] Saunders, M., Lewis, P., & Thornhill, A. (1997). Research Methods for Business Studies. London: Pitman Publishing. [31] Sullivan, D. (2005), Stop Looking Back: An Introduction to Forecasting for Business Intelligence. Retrieved: 26th December 2002 from http://www.ibm.com [32] Sherman, R. (2005), Four Legs of a Successful Business Intelligence Project Team. Retrieved: 15 April 2005 from www.crm2day.com [33] Spil, T. A. M., Stegwee, R. A., & Teitink, C. J. A. (2002), Business Intelligence in Healthcare Organizations, Proceeding
6. REFERENCES
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