Organizational competences for business intelligence system benefit realization

Business Intelligence & Organisational Change

Research Proposal on Business Intelligence Diffusion in Organizations

Business intelligence (BI) systems comprise one of the largest and fastest growing areas of it expenditure in companies today. Companies? experiences with deriving benefits from these systems are still mixed. One of the differences between BI and other types of information systems is that how BI systems are used, not just whether they are used, can have a major impact on the benefits derived. Therefore the characteristics of BI users and the organizations within which they work can have a disproportionate impact on the benefits derived from investments in BI. Organizational competence is one way to evaluate the characteristics of individuals and organizations relative to their ability to achieve organizational goals. This dissertation examines the characteristics of BI users and their organizations within the framework of organizational competences. Models representing those competences at both the individual and organizational level are presented. A combined competency model and resulting emerging competences are proposed that, if adopted, can improve the likelihood of organizations realizing benefits from their BI investments.

Table of Contents

2 ABSTRACT

4 INTRODUCTION

Background

Research Objectives

Structure of the thesis

Research Questions

7 LITERATURE REVIEW

9 RESEARCH METHODOLOGY

Data Analysis Approach

Developing an Assessment Tool

12 PROPOSED REFERENCES

Research Proposal on Business Intelligence Diffusion in Organizations

INTRODUCTION

Background

Companies spend billions of dollars annually on implementation and maintenance of information systems (IS). Estimates are that IS expenses constitute the largest portion of organizational expenditures (Carr 2004; Nash 2008). Given the size of these expenditures one would hope that companies were gaining benefits commensurate with the money being spent. Unfortunately recent figures estimated that nearly half of IS projects did not result in the anticipated benefits (Nash 2008). It is therefore important to understand what can help companies gain benefits from the investments in these systems.

Early information systems were used to automate otherwise manual processes, such as maintaining accounting ledgers or processing financial transactions. The benefits from these types of systems resulted from increases in efficiency or effectiveness of the underlying processes resulting in measurable cost savings or revenue increases (Zuboff 1988). BI systems provide benefits by supporting analytical processes that provide recommendations for changing products or processes in ways that improve their competitiveness or operational efficiency (Scheps 2008). These benefits are therefore dependent on the ability of the individuals using BI to do so effectively and the organizational ability to support the implementation of the resulting recommendations. Another way to describe organizational abilities to perform tasks or functions effectively is competence (Javidan 1998). This dissertation will develop a model to help understand how an organization can gain benefits via BI systems by understanding the competencies necessary for effective BI use and the relationship between those competencies and realizing BI benefits.

Research Objectives

The main objective of this research will be to understand the characteristics of an organization that allow it to be successful in deriving benefits from business intelligence systems. This research poses the proposition that beneficial use of BI requires certain competences to be present in an organization. There are business books that discuss organizational factors for successful BI. Williams and Williams (2007) identified seven factors defining "business intelligence readiness" as being "Strategic Alignment, Continuous Process Improvement Culture, Culture Around the Use of Information and Analytics, BI Portfolio Management, Decision Process Engineering Culture, BI & DW Technical Readiness, and Business/it Partnership" (Williams et al. 2007, pg 202). They suggested that only when an organization has this BI readiness would they be able to realize the benefits of BI.

Davenport and Harris in their book "Competing on Analytics," looked at the impact of BI systems on organizations. They identified something they called an analytical capability, which was their conception of the ability of an organization to use BI and as consisting of organizational acumen and technology factors (Davenport et al. 2007). They suggest that for an organization to benefit from an analytical capability that both organizational and technology factors must exist in that organization. They provide a high level view of the organizational factors, but they haven't defined the detailed competencies that an organization must possess in order to exploit these capabilities. Research in information systems is generally focused on either developing theories that explain related phenomena or on verifying existing theories (Hevner et al. 2004).

This research will be directed towards developing a theoretical model of BI success. Competence has been shown to be an important element in the success of information systems, and appears to have the potential to be of particular value in explaining the attainment of benefits from BI. However, a framework that explains competence for successful BI does not exist. This research will therefore seek to develop a framework to help explain the organizational competencies that would support the attainment of business value from BI.

Structure of the thesis

This dissertation will be divided into seven chapters. The first chapter will introduce some key concepts that provide the motivation for this research and introduces the basic objective of this work. The second chapter will contain a review of the literature that informs the research and provides a foundation for the remainder of the work. Chapter three will provide the theoretical underpinnings and research methodology taken in studying the key research questions and provides a summary of the key questions to be addressed. Chapter four will provide an exposition of the evidence collected during the research and presents the initial models that relate the key concepts that emerge from the evidence. In chapter five a framework for evaluating the fundamental research question will be presented and evaluated. Chapter six will provide a synthesis of all of the findings in this research, and chapter seven summarizes the entire document and outlines limitations and potential future directions.

Research Questions

The specific questions that describe this proposition based on the model with which we are starting would therefore be:

Question one: What are the characteristics of individual know-how and skill for BI?

Question two: What are the characteristics of purposeful and heedful interactions for BI?

Question three: What is the relationship between individual know-how and skills and BI success?

Question four: What is the relationship between purposeful heedful interactions and BI success? Given the researcher-s ontological and epistemological perspective, a retroductive methodology will be used as realized though a case study method.

RESEARCH METHODOLOGY

This research will use a retroductive methodology. Retroduction "refers to the process of building hypothetical models of structures and mechanisms that are assumed to produce empirical phenomena" (Blaikie 2007, pg 83). Bhaskar (1998) suggests that retroduction is the appropriate method to use when exploring social phenomena from a realist perspective. Retroduction starts with a model of the constructs to be studied. These models are then tested to determine if they represent the reality that the researcher is attempting to uncover. These tests are then used to modify the model based on understanding developed through testing. Finally a new model is postulated based on the revisions suggested by the evidence discovered during testing (Blaikie 2007).

This research will seek to understand the specific competencies that would allow an organization to gain business value from business intelligence systems. The question being studied is concerned with "how" and "why" questions regarding the relationship between competencies and BI. These types of questions can most effectively be addressed, especially in the early phases of a stream of research, via a case study approach (Benbasat et al. 1987; Yin 2003). A case study approach also allows one to examine a real world phenomenon in detail in a real life setting. Such an examination can lead to insights that could subsequently be used to develop generalized theories about the phenomenon in question.

Data Analysis Approach

In order to ensure validity of the data collected in this case study it will be necessary to follow a structured approach to data analysis. While the data collection will be done from the perspective of existing theory, it will still be important to structure analysis that ensures a deep understanding of underlying meanings. This will be accomplished by using the techniques of open and axial coding (Strauss et al. 1998). Open coding is the process by which "concepts are identified and their properties and dimensions are discovered in data" (Strauss et al. 1998, pg 102). Through this process underlying themes embodied in the interviews should emerge. These themes will be evaluated within the theoretical constructs of individual know-how and skills and purposeful heedful interactions. Once themes have emerged from the data, axial coding will be performed to align emergent themes within the overall theoretical model. Axial coding relates the categories identified through open coding "to subcategories along the lines of their properties and dimensions" (Strauss et al. 1998, pg 124). From these coding steps should emerge a model of competencies that will begin to explain successful BI.

As the coding of data will be performed new concepts may emerge that are not necessarily represented in the original theoretical model. These concepts will be explored by referring back to the literature to examine whether they have been studied. This iterative review of the research data and associated literature should provide insights that can be used to develop a theoretical model (Strauss et al. 1998).

Developing an Assessment Tool

An additional goal of this research will be to develop a preliminary assessment tool that can be used to determine an organization-s level of competence for BI. The tool will be created using the individual elements of competence that emerge from the coding of the interview data. These elements should represent the various items that will be identified as antecedents to BI competence in our evaluation. Respondents will be asked to evaluate each of the elements in terms of the status of their organization on each item and the importance of each item. This process will allow the evaluation of the potential for this tool to be used by an organization to determine their current likelihood of attaining BI benefits and provide direction for steps to take to increase their BI success. Evaluating how respondents use this tool can provide insight into how it can be used and its potential impact.

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