Exploring the value of business intelligence using a second generation balanced scorecard approach

Abstract

As with many new technology implementations before, Business Intelligence (BI) implementations have come under scrutiny in terms of the value added to organisations. The latest academic research uses various different ‘traditional financial methods’ such as the Return on Investment (ROI) calculations to determine the value of investments. In some instances customized measurement tools are proposed as a result of empirical studies conducted.

The main objective of this study is to perform qualitative investigation on the theoretical value of BI implementations in organisations. If it is assumed that BI does add value to organisations, the primary research question aims to investigate how this value is added. A balanced scorecard second generation approach is used as theoretical framework in order to address the question. This approach is also known as strategy mapping.

The research process starts with an extensive literature review on the topic of BI value evaluations and BI related balanced scorecards and strategy maps. As a result, various theoretical and practical research contributions are produced. One of the theoretical contributions includes an inventory of previous academic literature on the topic of BI value evaluations. This inventory is also presented diagrammatically. A preliminary version of the BI balanced scorecard is developed and used as foundation for a semi-structured interview template to investigate the value of BI in organisations.\ The semi-structured interview template was used as primary data generation instrument to gather data for this multiple-case study project. Four organisations participated in the study. The data obtained from the study was analysed and presented using an updated version of the theoretical framework of the study and was labelled as the intermediate version of the scorecard. The intermediate version of the BI balanced scorecard provided valuable input towards investigating how value was achieved as a result of BI implementations. These results were verified as part of a final verification process through a consultation process with the same study participants. A final version of the BI balanced scorecard is presented and included in a complete BI value solution. This version of the balanced scorecard is also a valuable practical contribution of the study. The verified results of the investigation indicated the following:- (1) BI adds value to organisations in all four perspectives of the organisation, namely the business value perspective, user orientation perspective, operational excellence perspective as well as the future orientation perspective. (2) Furthermore, the study confirmed that BI adds value to organisations through a number of benefits including an increase in sales and compliance to regulatory requirements (to name a few). (3) However, the study also indicated that value-related studies must adopt a holistic approach in an attempt to cater for the many facets of the topic. (4) Despite the challenge of implementing BI in organisations, the perceived value of BI implementations amongst senior management remained positive. This was supported by the continuous implementation of new BI projects in organisations. (5) There was a definite relationship between BI implementations and organisational performance. This is evident through the positive impact on sales figures, risk and compliance management and operational management. The study contributes to the broader field of Information Systems (IS) in numerous ways. Firstly the research discovers gaps in existing research, then proposes a method to investigate the research question as a result of the gaps identified, and -iiiuses this method as a tool to investigate the problem. The main contribution of the study is to contribute to the body of knowledge by investigating the value of business intelligence to organisations.