C & ET Research Paper:Business Intelligence- A decision-making tool

Abstract

The research area is focused on identifying ways in which BI helps in decision making. Organizations on a regular basis, handle complex data, and managers need to make decisions based on the data. Therefore, the need for BI tools shall be explored in this paper. The introduction chapter consists of research background, goal, questions, and barriers of the research. Based on the questions, significant literary sources were identified, and the opinions of the authors have been understood. The methodology chapter comprises an outline of chosen research methods. Collected data has been analyzed and synthesized in the next chapter. Lastly, implications and a few suggestions for further improvement have been cited in the last chapter.

Chapter 1- Introduction

Background/Introduction

The process by which businesses use technologies and architectures and convert only raw data to useful information in order to ensure the profitable business is referred to as business intelligence. The process is automated, and it allows employees to gain access to a rich and useful source of data. The research paper will be divided into five chapters. In the introduction chapter, the purpose of conducting research on BI as a tool of decision making shall be outlined. Research objectives and significance of the paper shall be highlighted. Following that, in the literature review, relevant articles shall be chosen and reviewed. Under the methodology chapter, the research methods shall be incorporated, and thereafter, findings of the research shall be analyzed. Lastly, the scope of future research shall be determined, and a few recommendations shall be illustrated that can solve the issue.

Problem Statement

In today’s business world, complexity has been rising, and there is a need for business leaders to make intelligent choices. Businesses have massive data that require analysis and synthesis. The enormous datasets are often challenging to understand. There is a need for tools that will turn massive information into understandable and short reports (Laursen & Thorlund, 2016). Managers need to have access to the reports, and the decision-making process based on the reports must become smooth as well. Again, while dealing with everyday operations, a chaotic scenario might occur. Information might get disorganized. Research suggests that business issues arise when performance metrics, sales, and financial data are present in different spreadsheets (Forbes.com, 2020). The chance of losing data prevails as well. Hence, research regarding BI tools can be helpful in resolving the issue.

Goal

The goal or purpose of conducting the research is to identify the need for BI in American organizations and the ways in which it can be regarded as a decision-making tool.

Research Questions

• How the present states of BI improve business conditions?
• What is the profitable impact of using BI tools?
• How can BI enhance the managerial decision-making process?
• Are there any negative implications of BI in US-based organizations?

Relevance and Significance

According to the Bureau of Labor Statistics, around 20% of businesses in America fail to conduct its operations strategically, and almost 50% are likely to encounter failure in its fifth year (Mallipeddi, 2019). Issues are present mainly due to disorganized financial and sales reports and the poor state of performance management. The group of business leaders and managers are mostly affected. However, research also suggests that the implementation of BI can improve this condition. It can act as an asset for any small or large business enterprise. Previously, successful attempts have been made, as well. For instance, Walmart used BI excellence and optimized its operational strategies and decision-making process. It reinvented its model and made it customer-centric. It made a profit of $21 million after witnessing a loss of $60 million (Kokina, Pachamanova & Corbett, 2017). The study will look into the other business issues and provide a solution. Results can be generalized, and real-world application might be possible.

Barriers and Issues

Reputed organizations fail at implementing BI, and around 70-80% initiatives are likely to fail (Liu, Han & DeBello, 2018). However, successful implementation involves the usage of relevant tools and techniques. Initially, it is not feasible to claim that BI can solve all operational issues because of other factors such as costs and resource availability matter as well. Nevertheless, the study might shed light on the rate of success and failure of BI in US-based firms. It can resolve our poor understanding regarding the real use of BI. It can be possible to gain practical insights about BI and ensure informed decisions.

Chapter 2- Literature Review

Introduction

A literature review is conducted to identify the relevant sources of pre-existing literature and build a strong base for further research (Machi & McEvoy, 2016). The statements, opinions, and claims of various authors on a related topic shall be explored in this chapter. It will help the researcher to justify the problem statement and the proposed research questions.

Identification of the real BI users and recommendations

Drushku et al. (2019), in their research paper, identified the actual users of BI. Based on their interests and their role in the organization, BI users can be categorized into various types. One of the professional players in the Data Analyst. They conduct deep research on the available data and provide new business insights. Similarly, IT users maintain the infrastructure of the business and the company head such as CXO or CEO can improve the efficiency of the operations using BI. Lastly, business users also use BI while to analyze a complex set of databases. They can be categorized into power users and casual users. The former ones work with challenging data sets while the latter one works with dashboards and evaluate data sets. The authors suggested that based on the interest of the users, they can switch their roles and improve interactivity with BI systems.

The present state of BI model in organizations

According to Rouhani et al. (2016), businesses can thrive only after giving stiff competition to each other. Their survival rate is directly proportional to their competitive strategies. In that case, BI implementation becomes a necessity rather than an exception. As per the authors, BI has managed to make a presentable impression in modern organizations. At present, there is a growing trend of implementing BI functions and conducting research on BI tools. Organizations are focused on using a range of BI tools and enhancing the process of managerial decision-making. The authors have conducted a survey of 228 firms across various countries and wanted to identify the BI capabilities used by the firms. The findings suggest that firms implement BI to ensure profitable outcomes and survival in a competitive market. The managers have adopted BI to increase sales, functions of the executive management, and day-to-day operations as well. The 228 firms adopted BI in 2018-2019, and BI apps have re-defined their business output. Other areas of improvement include self-service of end-users, automated reporting, advanced visualization as well as data warehousing. These BI technologies have been adopted and implemented successfully.

Impact of implementing BI tools and initiatives

As stated by Rajnoha et al. (2016), business management requires an organized approach, and BI tools can ensure strategic management. Research suggests that earlier organizations used to focus on performance management, and the results solely depend on various financial indicators. However, nowadays, economic indicators are not the sole criteria in performance management. Corporate performance is no longer measured on the basis of the traditional commercial approach. Organizations are now looking forward to implementing information systems that are BI-based. This initiative will ensure the strategic management of organizational performances. Organizations that have adopted the modern system and BI initiatives are more successful now. The firms have focused on analytics and refined their business results. Again, the study shows that collaborative BI has enhanced team performance. Members are keen to share and make collaborative decisions by using the social media tools as well. Modern businesses that have already shifted to cloud analytics technology are gaining momentum and competitive advantage. Similarly, in BI, the trend of using machine learning and AI is ensuring profitable results. Complex tasks are undertaken by these tools and it is surpassing human intelligence. Dashboard reporting and data analysis in real-time has leveraged as well.

Role of BI capabilities in improving the quality of decision making

According to Visinescu, Jones, & Sidorova (2017), the quality of decisions has a direct impact on business output. Large or small business leaders need to make complex decisions every day while analyzing vast sets of data and market trends. Here, the innovative BI capabilities have enhanced the quality. Intelligent and automated reports provide information to the managers quickly. They can calculate and ensure stronger ROI or Return on Investment. Costs reduce significantly and margins tend to improve. Consequently, both customer and employee satisfaction enhance as well. The available business-related information using BI tools are timely and accurate. Hence, reporting is accurate as well. Leaders can make quality decisions because they can compare the historical performances with current results within minutes. Customer behavior and expected needs or demands can be identified as well.

Issues encountered while implementing BI in small US-firms

According to Llave (2017), BI implementation might get challenging for small businesses because they might lack IT specialists, connected data centers and experienced consultants. Big companies tend to enjoy the privileges of BI more. Although 90% of business leaders and entrepreneurs believe that BI can revolutionize their business, 50% actually fail at it. Poor skill force is one of the major reasons behind the failure. Moreover, small businesses cannot hire full-time experts and administrators like IBM or Oracle. Maintenance issues are common, and employees are unwilling to spend 24 hours on ensuring reports and dashboard availability to corporate networks.

Literature gap

The missing link of the reviewed literature can be regarded as a literature gap. The gap occurs mainly due to time shortage and unavailability of research papers that can be accessed only after purchasing the papers online. Therefore, in this paper, a gap exists as well.

Chapter 3- Methodology Specifics (comparative analysis)

Introduction

The research methodology is a vital part of any research study as it involves a detailed analysis and justification behind using the research methods. In this chapter, the organized method of data collection and evaluation are highlighted. Researchers either use a secondary approach, primary approach or a mixture of both the techniques to collect data. Based on the needs, scope, time limit, resources and research objectives, the research methods are chosen (Gray, 2019). Critical evaluation of the research reliability and validity is possible in this chapter.

Comparative analysis

In this section, the researcher has compared the basic methods of data collection and then decided to choose one technique over another. The primary method mainly involves the collection of field-based data. Here, the researcher prepares a questionnaire based on research objectives and conducts a survey of a target population. The findings are thereafter analyzed using the quantitative method of data analysis. However, another method of data collection exists known as the secondary method in which the researcher solely depends on pre-existing scholarly papers and government reports (Kumar, 2019). In certain instances, both techniques are employed, and it is referred to as a mixed method. In the case of the secondary method, the retrieved data can be collected faster and analyzed without bearing huge expenses. However, the method can be disadvantageous because obtaining research-centric specific information might be difficult or challenging. Primary method ensures the collection of original information; however, it is comparatively much costlier and time-consuming than the secondary method. The researcher needs to prepare a questionnaire and select a suitable sample. Moreover, gaining consent from participants can be challenging and participants often provide inaccurate information during the survey if questions seem too lengthy or personal. Spending months on data collection is a drawback of the primary method.

Research methods

The study has been conducted using the secondary method because it required less cost and quicker results (Walliman, 2017). Based on the research questions and initial goal, suitable peer-reviewed journals have been selected. The purpose was to link as many objectives as possible with the articles and journals. Hence, the approach was less time-consuming. The chosen materials helped in building the basis of research. Only relevant databases such as PubMed, Proquest, and Google Scholar were used because these sites publish only academically valid and rich research papers. The sources are original and published in reputed journals as well. Moreover, it was easy to find appropriate topics related to the main theme of the research by using keywords and phrases such as “Business Intelligence”, “BI capabilities”, “Impact of BI on small and large enterprises”, “Risks in BI implementation” and “BI trends 2019-2020.” However, separating only the relevant sources was challenging because millions of search results were available. It was possible to find the link and shared opinions among authors. Accessing some relevant articles and books was not possible because those can be accessed only after making a purchase. Nevertheless, the chosen ones are all reliable. After completing the selection process, the researcher has summarized, compared and analyzed the data.

Chapter 4- Findings and Results

Data analysis

The collected information is secondary in nature, and it highlights a link between the proposed research questions and problem statements. For instance, it is evident that traditional methods of performance management and report preparation no longer yield suitable results. Organizations nowadays are keen to use BI tools and techniques for ensuring proper operations. Earlier financial information, sales information, and market trends were kept and prepared separately. However, BI allows integration of these techniques and allows its users to manage complex data sets. Strategic management is possible due to the improvement of end-user self-service, dashboard, database reporting, advanced visualization, and so on. Managers and business leaders can make decisions quickly without spending hours analyzing complex datasets.

Findings & discussion

The main highlights of the present study have been outlined below-

• BI users mainly include professional or casual users, data analysts, IT teams, and CEOs. They use BI tools based on business interests and professional needs.
• At present, business leaders have realized that the usage of BI tools will help firms to gain a competitive edge. Most importantly, BI apps quicken daily operations, and it has become a necessity instead of an exception.
• BI-based approaches such as collaborative BI using social media tools enhance team performance and increases interactivity as well as decision-making capabilities.
• Recent trends of BI also incorporates machine learning or AI, and it is surpassing the human intelligence
• Efficiency levels of firms have improved along with employee productivity.
• The overall quality of decision making leveraged after BI adoption in US-based firms.
• Small businesses fail at BI implementation due to a lack of finances and expert administrators.

Analysis

Earlier US-based firms had to manage a vast amount of information without proper resources, and it resulted in mismanagement, data loss, and lower profit margins. Nowadays, leaders started to prioritize technological advancements that save time and effort. Hence, BI managed to play a vital role. It can be ranked alongside useful techniques like outsourcing, strategic planning, customer segmentation, or benchmarking. Conducting a profitable business was challenging earlier. It was due to the mismanagement of data, inferior leadership, and misalignment between real initiatives and actual needs. However, BI can now be regarded as an asset, particularly for large businesses.

Synthesis

Professionals such as Data Analysts and CEOs are increasingly implementing BI for evaluating the data sets and predicting market trends within minutes. It has increased collaboration and interactivity among teams. BI has been adopted for solving HR issues, sales, and marketing issues. BI adoption has improved the existing operations and revenues of firms. Customer service has been enhanced, along with risk management and compliance. The top initiatives adopted include reporting, dashboards, data warehousing, and advanced visualization (Kasemsap, 2018). The executives are now increasingly employing data catalog, data storytelling, and data mining initiatives. Traditional budgeting and planning have been getting replaced. Using analytics and BI apps, executives, and leaders are getting excellent outcomes.

Discussion

BI tools are mainly used in enhancing the operations of the firms. The functional areas such as marketing, sales, risk management, and human resource management are the operational components. In the case of small firms, BI implementation can be challenging as they lack experienced IT consultants, engineers, and expert administrators. Hence, 50% of small businesses are likely to encounter failure in the initial years of BI implementation. Nevertheless, managers improve business efficiency and ROIs only after using BI tools (Grytz & Krohn-Grimberghe, 2017). The analysis and categorization of available data became automated, and it enhanced the decision-making quality. Business output has been re-defined, and the incidence of data loss reduced as well. Corporate performance enhanced by using collaborative BI.

Chapter 5- Conclusion and Future Recommendations

Conclusions

The study concludes that BI tools are an asset for large enterprises, and it enhances the decision-making capabilities of firms. In the age of the internet, relying on traditional methods for budgeting, planning, and market research will no longer yield profitable results. Traditional financial management has become invalid. Modern-day firms need to manage huge amounts of data sets, and BI tools and initiatives can certainly leverage the process. The study objectives have been fulfilled, as well as most of the relevant secondary sources claim that business intelligence has a positive impact. Analytics, data mining, and data cataloging enhance business productivity. The collected data supported the fact that BI is a useful decision-making tool for managers. On the other hand, one of the negative sides of BI is its expense and degree of expertise required for proper implementation. Consequently, it is challenging for small firms, and alternative solutions are needed to address the issue.

Implications

The research conducted to gain the real-life usefulness of BI for the managers and CEOs has significantly contributed towards the future development of the topic. The targeted community, as in this case, business operators, can be benefitted after implementing BI in their firms. Though a shortage of time has limited the scope of the study, and future considerations for further development are present. Professionals such as Data analysts, CEOs, and IT experts will be benefitted. If future research is conducted on the same issue, it is possible to identify more usefulness and practical applications for small businesses. The present study is secondary in nature and in future, the possibility of conducting primary research is present as well.

Recommendations

BI can be undoubtedly profitable for quick decision making in large businesses. However, in the case of small firms, limitations are present. Therefore, a list of recommendations has been provided below to improve current research methods and limitations of BI-

• In future, the primary method of data collection can be used and a positivist approach would ensure the gathering of first-hand information
• Small businesses can use a BI tool known as Zoho Analytics to save time and expenses. It is available at $225-$445,5 based on business size and needs (Atriwal et al., 2016)
• Similarly, Tableau Desktop provides end-to-end results and offers free training. Small businesses can gain the advantage of the subscription option and identify data trends easily.

References

Appendices