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THE EFFECT OF BUSINESS INTELLIGENCE AND ANALYTICS (BI & A) IN
ORGANIZATIONAL PERFORMANCE
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CYPRUS INTERNATIONAL UNIVERSITY
INSTITUTE OF GRADUATE STUDIES AND RESEARCH
Management Information Systems Department
THE EFFECT OF BUSINESS INTELLIGENCE AND ANALYTICS
(BI & A) IN ORGANIZATIONAL PERFORMANCE
DATA MINING AND KNOWLEDGE ACQUISITION
(MISY641)
LABARAN ISIAKU
NICOSIA - 2021
ABSRTACT
Business intelligence and Analytics (BI & A) is a concept which consists of methods and
tools for transforming data into useful information for effective and intentional study of a
firm or organization to gain competitive advantage in the long run. Business intelligence
and Analytics (BI & A) assists organizations to deliver better products and services as well
as assist firms in organizational decision making. In today's world, firms collects a massive
quantity of clients data in order to understand their patterns and behaviors, to analyzing
these data sets, it necessitates advanced knowledge on how to do that. Business intelligence
and Analytics tools can help in understanding the necessary data and trends into meaningful
information. The purpose of this research is to examine the effect of Business Intelligence
and Analytics (BI & A) in organizational performance.
KEY WORDS: Business Intelligence (BI), Analytics, Organizational Performance, Firms,
BI & A.
1. INTRODUCTION
The business sector has been gathering momentum and continually becoming more
complex. Public and private organizations are under intense pressure to adapt to the rapidly
changing environments to become more innovative in their operations. Such operations
necessitate companies agility and ability to frequently make rapid strategies, tactics, and
management decisions, which might be difficult in some cases. Although it
necessitate relevant knowledge, information and data to make such types of instant
decisions in an organization. Evaluating these within the context of the required decision
making must be performed fast, oftentimes in real time, and typically with some electronic
assistance. Due to the vast amount of data provided by technological development,
Business Intelligence (BI) is viewed as a core approach to an effective management of
significant organizational data in other to support managers in decision making process. BI
includes tools and procedures which helps to transform unstructured data into valuable
information that helps an organization to purposely examine it's environment and gain
competitive advantage (for example, data marts, data warehouse, including analytical
tools such as reporting systems, forecasting tools, balanced scorecard and data mining
systems). According to Zeng et al. (2007), BI is a way of gathering, processing, and
disseminating information with a specific goal, as well as aimed to reduced uncertainty in
the decision making processes. Maria (2015) argued that BI is known as a concept,
procedures, and strategies for improving strategic decisions that employ data from
numerous sources (both internal and external sources) which are collected from customers,
suppliers, or other affiliates to comprehend business strategy. Elbashir et al. (2008) defined
business intelligence (BI) as a group of data monitoring and reporting tools that assist
lower, middle, and top managers in making better decisions by utilizing timely and accurate
information.
It was during late 2000s that the new term "business analytics (BA)" emerged which mainly
concentrated on analytical parts of Business Intelligence BI. As a result, the term business
intelligence and analytics (BI&A) was coined to encompass detailed principles and
methodologies to improve organizational decision making. Business Intelligence and
Analytics BI&A) was quoted as the advanced method for boosting competitive
advantage among CIOs in recent years (Gartner's Survey 2011). In today's business
environment, almost every successful businesses have integrated (BI & A) systems in their
organization (Chaudhuri et al. 2012). While business intelligence will not instruct
organizational managers on what they should do or what might occur if they follow a
specific path. Business Intelligence is also more than just creating reports, it also
streamlines the process required to search for, consolidate, and query all the required
information to make effective business decisions, allowing individuals to review data to
discern trends and generate insights. According to Hagans (2012), an organization that
wants to optimize their supply chain requires BI capabilities to understand the routes where
delays in product supply is occurring and where variations usually happens in the shipping
process or which kind of transportation usually causes the delay. According to Cindi
Howson, he stated that the possible business applications for BI go beyond the
conventional business success measures of increased sales and cost reduction. She cites
that BI tools are used to investigate a wide range of data points ranging from rates
of attendance to performance of students in order to increase learning. BI applications were
formerly used primarily by IT professionals (Jonathan C. 2011). On the other hand,
BI had expanded to become more accessible and user-friendly, allowing a large number of
people from a range of organizational sectors to have access to BI tools Maria (2018).
Therefore, the main objective of the research is to evaluate the influence of (BI & A)
systems in organizational performance on utilizing resources and maximizing company
income, increasing customer satisfaction, and enhancing overall organizational
performance
2. AIM OF THE RESEARCH
We now live in a highly competitive world, most especially in business environment. In
our changing economic environment, the capacity and expertise to foresee customer
patterns and market trends is critical. The fact that is not every CEO that will have the
Warren Buffett-like forecasting talent or anything close to that is close to (BI & A). It will
be time wasting for any organization to be manually analyzing these processes, bringing an
expert system to evaluate and forecast these critical patterns using BI systems could
differentiate a successful business and an unsuccessful business. Considering that current
technologies are advancing rapidly at the maximum speed, organizations must innovate or
risk being left behind by their competitors. Business Intelligence and Analytics (BI &
A) Systems are excellent example of such tools that can assist firms in achieving these
objectives. With that being said, the primary goal for this study is to evaluate the influence
of (BI & A) systems in organizational performance on utilizing resources and maximizing
company income, increasing customer satisfaction, and enhancing overall organizational
decision making.
3. Research Questions
Considering the primary goal for this study is to evaluate the influence of (BI & A) systems
in organizational performance on utilizing resources and maximizing company
income, increasing customer satisfaction, and enhancing overall organizational decision
making, the following research questions were constructed to help the researcher in
conducting the research and collect as much information needed as possible.
RQ1. How will Business Intelligence and Analytics (BI & A) effect the level of decision
making in an organization?
RQ2. How will (BI & A) save customers time and increase organizational performance?
4. LITERATURE REVIEW
Business Intelligence
Zeng et al. (2017), Business Intelligence (BI) is a way of gathering, processing, and
disseminating information with a specific goal, as well as aimed to reduced uncertainty in
the decision making processes. Maria (2015) argued that BI is known as a concept,
procedures, and strategies for improving strategic decisions that employ data from
numerous sources (both internal and external sources) which are collected from customers,
suppliers, or other affiliates to comprehend business strategy. Elbashir et al. (2018) defined
business intelligence (BI) as a group of data monitoring and reporting tools that assist
lower, middle, and top managers in making better decisions by utilizing timely and accurate
information. Due to the vast amount of data provided by technological development,
Business Intelligence (BI) is viewed as a core approach to an effective management of
significant organizational data in other to support managers in decision making process.
Bowyer, J. (2013) clearly stated that BI includes tools and procedures which helps to
transform unstructured data into valuable information that helps an organization to
purposely examine it's environment and gain competitive advantage (for example, data
marts, data warehouse, including analytical tools such as reporting systems, forecasting
tools, balanced scorecard and data mining systems).
Business Analytics
Business analytics is said to be a branch of business intelligence and a data management
solution, which can be define as the use of approaches including data mining, big data, and
the use of scientific techniques to evaluate and process data into useful insights, detect and
predict trends, and eventually make better data-driven management decisions.
James P. (2012) stated that the necessary components of business analysis are often
classified as descriptive analyzes that analyzes existing information to measure how a
group of variables react. Whereas predictive analyses examine existing information to
measure the probability of certain outcome in the future (Logan, S. 2011).
Data Analytics
Data analytics is the scientific study of raw data that can help managers or organizations
draw conclusions and make effective decisions (Mathew, K. 2013). Many data analytics
approaches and procedures were automated into mechanical process with techniques that
deal with raw data and are designed for a specific utilization (Jonas, 2013) .
Holsapple, C. (2014) argued that data analytics is critical because it can aid organizations
in in providing better results. Runkler, T. A. (2020) organizations may limit unnecessary
spending by developing highly effective business strategies and method of storing big
volumes of data by incorporating this processes. Data analytics may also be used to assist
a firm operate more efficiently as well as assess consumer patterns and satisfaction, which
may lead to the development of new products and services (Russom, P. 2011).
Organizational Performance
Organizational performance is all about examining firm's performance in relation to its
vision and mission (Palvia, P 2016). Organizational performance can also be referred to
as the comparison of actual results to expected outputs. According to Kanter and
Brinkerhoff (1981), the metrics for organizational performance is based on the person that
want to know it or why the person wants to assess the performance. Experts ought to
measure and evaluate performance of the organization for a variety of reasons, including
justifying the appropriate use of stockholders’ funds, guiding decision making
processes by highlighting problem areas, comparing regional performance, and exercising
control. As a result, the concept of organizational performance can vary depending on its
application (Norman, D. 2011) .
Integrating business Intelligence to save organization’s time and cost
Storey, V.C (2021) mentioned that cost cannot be reduce without the basic knowledge on
how to do that, and processes will not be improved unless organization identify ways to
do something about it. Company intelligence systems may help organizations
to quickly determine which operations contribute to business performance, by using KPIs,
to proactively determine firms performance in relation to the targets established. Finally,
these instruments have the ability to minimize costs while increasing profitability. Using
business intelligence can assist organizations to determine what are the cost of their present
procedures. You can also examine the management expenses like the inventory and amount
of wage spending (Chen, H. 2021).
Chiang, R.H. (2021) also stated that since expenses are frequently incurred as a result of
manual operations, which not only cause time wasting and has a significant likelihood of
errors that are extremely costly. Sharda, R. (2014) The manual process staff workers
consume time that could have been allocated strategically to have bigger influence on firm.
Several strategies are in place for lowering administrative costs and maximizing
productivity by leveraging Business Intelligence (BI). Leadership team can use (BI) to
gather knowledge and insight in order to start cutting operating expenses and boosting
efficiencies. Moreover, (BI) technologies are also used as a form of monitoring
organizational progress or can also be used as tools for making adjustment to achieve
organizational goals (Turban, E. 2014).
Organizational Decision Making
The ability to make choices among various alternatives that might also involve delay, is
referred to as Decision Making. It is true that management entails decision making, 50 per
cent of decisions taken by organizational managers fail (Ireland & Miller, 2014). As a
result, enhancing your decision-making effectiveness is a key aspect of boosting your
overall business performance (Pakath, R. 2014).
Figure 1: Types of Organizational decision making
Bazeman, M. H. (2019) Categorized decision making into three types:
1. Strategic decisions determine the vision of the organization.
2. Tactical decisions are those that affect how things are done.
3. Operational decisions are those types of decisions that are made on a daily basis by
the employees of an organization to make it operational every day.
Consider a coffee shop that frequently provides a free cup of coffee in response to a client
complaint. The coffee shop managers deliberate made that decision to provide quality
service. The shop owners implemented the free cup of coffee strategy as a means of dealing
with customer concerns, which can be considered to be a tactical decision (Macron, 2019).
5. METHODOLOGY
This study consists of a systematic literature review (SLR) which was carefully carried out
in accordance with the recommendations suggested by Kitchenham. Kitchenham's
guidelines was used because of the organized approach it follows to state the stages
involve in conducting the literature. The activities performed during the systematic review
are outlined in the subsections below.
5.1 The Search strategy
Automatic and manual research was used as the search approach. Web of Science, IEEE,
ScienceDirect, Tailor and Francis online, Springer-Link, JSTOR and Emerald Insight are
the databases used to conduct the search. The selected databases were chosen because they
were thought to be the most relevant and provide the most useful journals when it comes
to the discipline of BI&A. The criteria that was used to select the databases was using the
Impact Factor of each Journal. It calculates the amount of citations earned in a given year
by papers published in the journal in the previous two years. This method was known to be
a decent way to scientifically evaluate a journal (Eugene Garfield, 1975). The search terms
that were used to obtain the papers are (BI, BI&A, Business Analytics, Business
i
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Intelligence, Business Performance, and Organizational Performance) these specific
keywords help the researcher obtain relevant articles from the specified journals. After
gathering the information needed, the papers were then reviewed in accordance with the
i
objectives of the study. Likewise, EndNote was also utilized to store all citations and to
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avoid duplicating studies. A manual search was conducted in addition to the computerized
i
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search to guarantee that no studies were missed out.
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Table 1: Search Strategy
Search Period:
2011-2021
Search Terms:
Business Intelligence, Business Analytics, Organizational
Performance, Cost reduction, Maximizing revenue, Customer
satisfaction, Decision making.
Search
Web of Science, IEEE, ScienceDirect, Tailor and Francis
Databases:
Online, Springer-Link, JSTOR, Emerald Insight
The search terms in table one were used in the selected databases to identify scholarly
publication that are relevant Business intelligence and analytics in organizational
performance, cost reduction, decision making were among the search terms. In addition to
simple search phrases, AND/OR Boolean operation were used by the researcher as an
added possibility to collect much information needed. Year 2011 was the chosen as the
starting point for the search since it was discovered that more relevant publications
connected to (BI & A) were released in the year of 2011.
5.2 Research Selection Process
After the search procedures was completed, the researcher discovered 76 articles that are
considered to be important to the field of (BI & A). We extracted the most relevant articles
from the search procedure by applying inclusion and exclusion approach shown in table
2. As a result, 39 articles were then eliminated, decreasing the number of the articles to 37.
Subsequently the remaining articles were screened again by reading the complete text of
the papers to ensure that they are relevant to (BI & A) in organizational performance. As a
result, another 16 publications were deducted from the 37 papers leaving behind only 21
articles that happened to be the most important to research topic that helps the researcher
to conduct the study.
5.3 Research Inclusion / Exclusion Criteria
By applying the inclusion and exclusion search strategy was to ensure that only the
important papers were used in this research. Electronic Databases were searched for
research publications in the English language from some of the important journals after
considering their Impact factor for ten years. E-books and other internet sources were also
used to collect some relevant information. Papers and other information that are considered
as not important or have little to no connection to the research question and BI&A were
discarded. Duplicate reports on the same research topic were instantly discarded as well.
Table 2. Inclusion and Exclusion
Inclusion Criteria
Exclusion Criteria
1. Scholarly publications that were Publications that are not related to (BI & A)
published from 2011-2021
2. Publications that are related to the Highly technical perspective papers and
Impact of (BI & A)
3. Completed
books that are not scholarly publications
peer
reviewed Uncompleted peer reviewed research
research
4. Publications in English as a Publications
Language
that
are
not
in
English
Language
5. Publications available in the Duplicates
research selected databases
5.4 Quality Assessment
Aside from the inclusion and exclusion criteria technique, evaluating the integrity of the
primary research was also deemed as very important. The main objective of this quality
assessment was to check the peculiarity of each selected research paper. The following
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quality assessment questions were iused ito help the interpretation of the findings and
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determine the strength of the inferences of the selected studies:
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QA1: The addressed research topic of the papers, are they related to (BI&A)?
QA2: Is the context of the research paper clearly relevant to the effects of (BI & A)?
i
DISCUSSION
The research findings that were obtained from this systematic research, advises that future
researchers should undertake more systematic and empirical analyses on the impact of (BI
& A) on organizational performance and to investigate various elements that enable
organizations to magnify the adoption of (BI & A) to enhance business performance.
Future researchers can broaden their search for Business Intelligence and Analytics in
other field of business and management to include more studies that were missing in our
search result which are considered to be important that needs systematic review.
FINDINGS
Generally, the research study resulted to Three findings. Firstly, base on the
bibliographic analysis of the research, we noticed that scholarly publications on
Business Intelligence and Analytics (BI & A) are growing substantially from 20112021. The Second finding was that, Business Intelligence and Analytics (BI & A)
are systems that uses machine learning approaches to improve an organization's
efficiency and effectiveness by assisting in the process of decision-making in an
organization. Thirdly Business Intelligence analyzes data in real time. It works by
alerting the company of any expense or budget-related issues. It provides the
information required to capitalize on events as they occur. As a result, customer
relation can be strengthen, reduces cost and maximizing revenue. This is one of the
critical components of BI that is quite beneficial to cost reduction and increasing
organizational performance.
CONCLUSION
To conclude, we have learned from the systematic literatures that Business Intelligence and
Analytics (BI & A) are primarily used to assist organizations, management, decision
makers and other senior executives in making better-informed decisions based on correct
data. Potentially, the systems also have the abilities to assist top decision makers in
identifying new business prospects, cost savings, and inefficient processes which have to
be reengineered. BI is a method of extracting meaningful information out of company’s
big data to make strategic choices using some specific algorithm and softwares.
Dashboards and reports are used by BI users to evaluate and display data, making
complicated information more approachable and accessible. Because it merely exposes the
past and current condition, BI is sometimes known as "descriptive analytics." It doesn't tell
you what to do, but rather tells you what has happened before and what is happening at that
very moment. Therefore, the CEOs continue to bear responsibility for taking the final
decision using the information displayed to them the systems. With that said, organizations
should adapt the practices of (BI & A) if they really wants to survive and have a knowledge
of what their customers wants, what are their trends, and how to serve them better. These
strategies will help a firm stay ahead of their competitors in this competitive business
environment.
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