How Business Intelligence Creates Value: An Empirical Investigation

How Business Intelligence Creates Value: An Empirical Investigation

Nir Yogev (Department of Industrial Engineering and Management, Ben-Gurion University of the Negev, Beer-Sheva, Israel), Adir Even (Department of Industrial Engineering and Management, Ben-Gurion University of the Negev, Beer-Sheva, Israel) and Lior Fink (Department of Industrial Engineering and Management, Ben-Gurion University of the Negev, Beer-Sheva, Israel)
Copyright: © 2013 |Pages: 16
DOI: 10.4018/ijbir.2013070102
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Abstract

This study examines the business value associated with business intelligence (BI) systems, based on the premise that business value is largely contingent on system type and its unique contribution. The study adopts a process-oriented approach to evaluating the value contribution of BI, arguing that it stems from improvements in business processes. The study develops and tests a research model that explains the unique mechanisms through which BI creates business value. The model draws on the resource-based view to identify key assets and capabilities that determine the impact of BI on business processes and, consequently, on organizational performance. Analysis of data collected from 159 managers and IT/BI experts, using structural equation modeling (SEM) techniques, shows that BI largely contributes to business value by improving both operational and strategic business processes.
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Theoretical Development

DSS for aiding organizational and managerial decision-making processes started to emerge in the 1960s and 1970s. BI, as an overarching term for DSS that are based primarily on integrated organizational data resources, was introduced as a set of concepts and methods to improve fact-based decision making. BI tools aim at improving the quality and accuracy of information used in decision making processes by simplifying the storage, identification, and analysis of information (Negash, 2004). BI systems let users at all organizational levels access data, interact with it, and analyze it toward improving business performance, discovering new opportunities, and increasing efficiency. Well-designed BI systems offer a global view of the entire organization, permit analysis of business activities from multiple perspectives, and enable rapid reactions to changes in the business environment (Matei, 2010).

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