The roles of BI capabilities and decision environments in Business Intelligence Success
For the past 10 years or so, Business Intelligence (BI) has been high on executive agendas, and the promises of BI are rapidly attracting more proponents. But even though so much research and implementation effort have gone into BI, only about one-third of BI projects report success. Why is the success rate so low? What makes the difference between success and failure in a BI project?
Oyku Isık (Assistant Professor of Information Systems Management at Vlerick Business School), and colleagues Mary C. Jones and Anna Sidorova from the University of North Texas, have conducted a study to examine the role that decision environments play in how well BI capabilities are leveraged to achieve BI success.
In their study, the authors examined the relationship between technological and organisational BI capabilities, decision environment characteristics and BI success. Focusing on BI as a decision-support mechanism, they first offer definitions of the factors under study:
- BI is a system comprised of both technical and organisational elements that presents its users with information for analysis to enable effective decision-making and management support, with the overall purpose of increasing organisational performance.
- BI capabilities are critical technological and organisational functions that help an organisation improve both its performance and its adaptation to change. Technological BI capabilities are sharable technical platforms and databases that ideally include a well-defined technology architecture and data standards. Organisational BI capabilities are assets that support the effective application of BI in the organisation, such as flexibility and shared risks and responsibilities.
- The decision environment is the combination of different types of decisions made and the information-processing requirements of the decision-makers when making those decisions.
Therefore, a key requirement of BI success is the presence of the right BI capabilities, which must be related to the decision environment in which the BI is used.
The aims of the study
Although BI capabilities have been studied from both technological and organisational perspectives, the relationship between the decision environment and BI capabilities has remained largely unexamined. But examining this relationship is important, because BI’s primary purpose is to support decision-making in organisational environments.
Therefore, the authors addressed the following research questions:
(1) What is the relationship between various BI capabilities and BI success? and
(2) What is the influence of the decision environment on the relationship between BI capabilities and BI success?
Key findings for practitioners
The results of the study provide – sometimes surprising – insights into the factors influencing BI success. One overarching theme that surfaced in the research is that the BI used within an organisation must suit the decision environment within which it is used, and that this match is key to BI success.
The authors’ findings suggest that technological capabilities – such as data quality, user access, and the integration of BI with other systems – are necessary for BI success, regardless of the decision environment. However, the decision environment does influence the relationship between BI success and BI capabilities: for example, the extent to which BI supports flexibility and risk in decision-making.
However, previous research and practitioner-oriented publications suggest that users do not necessarily make the connection between their BI capabilities and the decision environment.
Although some BI capabilities are found to be important for BI success regardless of the decision environment, the effects of other capabilities (those that support flexibility and risk in decision-making, for example) are moderated by the decision environment’s characteristics. Still other BI capabilities, such as data quality, appear to have reached an acceptable level, and further improvements to such capabilities may not translate into greater BI success.
From the practitioner’s point of view, this study suggests that it is important to use the right BI capabilities within the proper decision environment in order to allow an organisation to realise maximum benefits from its BI investment. While user access and seamless integration with other systems is critical regardless of the decision environment, as organisations shift to using BI in less structured decision environments, they should pay additional attention to ensuring the adequate flexibility of their BI applications.
Source: “Business intelligence success: The roles of BI capabilities and decision environments” by Oyku Isık (Professor of Information Systems Management, Vlerick Business School), Mary C. Jones and Anna Sidorova (Information Technology & Decision Sciences Department, University of North Texas, Denton, TX, USA). Published in: Information & Management Vol. 50, January 2013, pp. 13–23.