Business Intelligence Effectiveness and Corporate Performance Management: An Empirical Analysis

ABSTRACT

Business intelligence (BI) technologies have received much attention from both academics and practitioners, and the emerging field of business analytics (BA) is beginning to generate academic research. However, the impact of BI and the relative importance of BA on corporate performance management (CPM) have not yet been investigated. To address this gap, we modeled a CPM framework based on the Integrative model of IT business value and on information processing theory. Data were collected from a global survey of senior managers in 337 companies. Findings suggest that the more effective the BI implementation, the more effective the CPM-related planning and analytic practices. BI effectiveness is strongly related to BA, planning and to measurement. In contrast, BA effectiveness is strongly related to planning but less so to measurement. The study suggests that although both BI and BA contribute to corporate management practices, the information needs are different based on the level of uncertainty versus ambiguity characteristic of the management practice.     

A framework for data-driven informatization of the construction company

With the advent of big data era, the construction industry has focused on processing large quantities of engineering data and extracting their value. However, inaccurate manual entries and delayed data collection have created difficulties in making full use of information. Meanwhile, difficulty sharing data and weak interoperability of data among business information systems also leaves company headquarters without the resource integration that can facilitate decision making. To overcome these challenges, we proposed a big data infrastructure called the enterprise integrated data platform (EIDP) for use by construction companies. We discuss a case study, and offer a framework for future business improvement that contributes to closed-loop construction supply chain management, cost management and control, knowledge discovery, and decision making. The proposed informatization solution provides a theoretical basis for realizing data sharing and interoperability between business management and project management. On this basis, it will help construction companies to improve the efficiency of both company operations and project delivery by optimizing the business process and supporting decision making.     

Software quality programmes: a snapshot of theory versus reality

We analyse the software quality programmes of two major UK companies whose software development departments, we feel, are typical of many hundreds in the UK. The analysis is based on an almost exhaustive survey of relevant practitioners at these companies (123 out of a possible 149 individuals) using questionnaires and interviews. We discovered significant differences between senior managers' perceptions and the reality of what quality practices took place. In particular, use of reviews and inspections, which are widely believed to be an extremely cost-effective QA procedure, was very limited even when safety critical software was being developed. On the other hand there was widespread use of development and coding standards whose value is questionable. We also discovered significant differences between practitioners' and managers' views of what the company quality goals really were. While no generalizable conclusions can be drawn from the results of just two companies, the observations do confirm the informal results arising from the more extensive nationwide survey of which this particular study forms a part.     

Information and small companies: Chaos with intent

Small companies face an increasingly turbulent business environment. They are traditionally power cultures, with informal, chaotic, communication flows. This has enabled them to maintain flexibility. However, informal information is no longer enough in the face of complexity. These companies need to concentrate onformal information for traceability. Effective management of both formal and informal information enables these small companies to adapt to change. This paper explores information in a small company, using an in-depth case study. The work is of particular interest and value to the knowledge-intensive small company, one of the emerging types of company in Europe.     

On a Role for Copula's in Jeffrey's Rule with An Application to Decision Making

We introduce Jeffrey's rule of conditioning. We explain how it enables us to determine the current probability of an event using a collection of conditional probabilities of the event determined from past experiences and the current probabilities of the conditioning events. We note the importance of the joint probabilities of the event of interest and the conditioning events in obtaining the required conditional probabilities. We investigate the use of copula's to help obtain these required joint probabilities. We then apply our results to a problem of financial decision making in which the success of the stock issue of a new company depends on the quality of management of company. Here, past history tells information about the success of a typical company based on its quality of management and our own observations provides information about the quality of the current companies management.     

Patterns of software quality management in TickIT certified firms

This study is a type of practice research known as repertoire building. Its aim is to identify patterns in the way software companies approach quality management in pursuit of ISO certification. This study examines eight UK software companies, all of which were early users of TickIT guidance for gaining ISO certification. It uses a research method which combines multiple, embedded case studies with grounded theory in order to identify patterns in the ways in which these companies perform software quality management. The study finds that each company has adopted either a policing, an advisory, or a hybrid approach towards software quality management. A company's attitudes towards both internal and external auditing characterise these approaches. The approach selected by a company affects the structure and the tasks of its quality department. These approaches reflect senior management's reasons for seeking TickIT certification. Once a company adopts an approach, it is unlikely to change unless there is new management. The study concludes that the TickIT guidance provides a suitable baseline for software quality control. This requires a company to attain Level 2 in the Capability Maturity Model. However, once a company obtains certification, TickIT does not encourage further improvement in its processes. As a result, most companies focus on product quality and largely ignore process quality. In fact it appears that none of these approaches include an adequate mechanism for software quality improvement. Hence, the failure to address process innovation in the TickIT guidelines may explain why it was difficult to distinguish among the effectiveness of these three approaches.     

A management framework for systems users

Many business managers today are in need of practical guidance in determining which information systems management practices are appropriate for their particular organization. Of central importance is the management of the information systems development process. A field research study was conducted at five major U.S. corporations to determine those information systems development management practices that had proved successful. The research method consisted of in-depth interviews with managers and technical people at each company. In addition, the reputation of each company as a successful manager of the information systems function was validated using a set of organizational performance criteria developed by a panel of prominent information systems professionals. The results of the research are presented in the form of a planning and control framework of successful management practices. The framework describes and classifies those practices common to all companies and clearly differentiates those practices which varied significantly among the companies studied. The framework is designed to enable management to readily identify those information system development practices that have proved successful and to select from among them those most appropriate to the local situation. It can also serve as a guide for self-study on the part of the individual manager.     

Prioritization and selection of intellectual capital measurement indicators using analytic hierarchy process for the mobile telecommunications industry

Intellectual capital (IC) has prevailed as a measure of core competency and competitive advantage which explains the gap between the market value and book value of an organization at a time of decreasing usefulness of current financial reporting. In spite of the importance of IC management (ICM), few applicable ICM methodologies have been addressed. There has been no basis model for IC statements, nor bottom-line indicators of the value of IC. The selection of effective IC indicators is a major task of the companies that are preparing IC reports. This paper has proposed a decision model based on the analysis of the conceptual framework of the qualitative characteristics of financial information and an examination of information quality of the information system. The application of the analytic hierarchy process makes it possible to extract weights for setting the priority among criteria in the mobile telecommunications industry. During the last decade, this industry has experienced a dramatic growth in its intellectual value, and the value of IC seems to have had a major impact on the value of the mobile telecommunications companies. Based on specified criteria and weighting, this paper presents the results of a case study illustrating the results of selected indicators from candidate indicators in the mobile telecommunications company.     

Information Problems and Company Behaviour vis‐à‐vis Continuous Management Training

The purpose of this study is to examine the degree and type of information the company holds on training, and to what extent the lack‐of‐information firms suffer in two senses, information on managerial resources and information on training supply, tends to condition their behavior vis‐à‐vis management training. Data from more than 300 Spanish companies with 50 or more workers are used to examine the connection between information asymmetries and company behavior in relation to continuous management training. The empirical study revealed that company readiness to engage in continuous management training appears to be significantly conditioned by all variables related to the existence of information on managers and training supply. Based on these results, underinvestment in managerial training would be associated with those cases in which information is unavailable or not distributed uniformly and transparently. This study contributes to the existing training literature by providing a novel link between information asymmetries (firm managers; firm training offerings) and their ability to influence training investment rates. © 2012 Wiley Periodicals, Inc.     

A novel approach to exploring company’s financial soundness: Investor’s perspective

Prediction of company’s life cycle stage change; creation of an ordered 2D map allowing to explore company’s financial soundness from a rating agency perspective; and prediction of trends of main valuation attributes usually used by investors are the main objectives of this article. The developed algorithms are based on a random forest (RF) and a nonlinear data mapping technique “t-distributed stochastic neighbor embedding”.Information from five different perspectives, namely balance, income, cash flow, stock price, and risk indicators was aggregated via proximity matrices of RF to enable exploration of company’s financial soundness from a rating agency perspective. The proposed use of information not only from companies’ financial statements but also from the stock price and risk indicators perspectives has proved useful in creating ordered 2D maps of rated companies. The companies were well ordered according to the credit risk rating assigned by the Moody’s rating agency.Results of experimental investigations substantiate that the developed models are capable of predicting short term trends of the main valuation attributes, providing valuable information for investors, with low error. The models reflect financial soundness of actions taken by company’s management team. It was also found that company’s life cycle stage change can be determined with the average accuracy of 72.7%. Bearing in mind fuzziness of the transition moment, the obtained prediction accuracy is rather encouraging.     

Process fusion: An industrial case study on agile software product line engineering

This paper presents a case study of a software product company that has successfully integrated practices from software product line engineering and agile software development. We show how practices from the two fields support the company’s strategic and tactical ambitions, respectively. We also discuss how the company integrates strategic, tactical and operational processes to optimize collaboration and consequently improve its ability to meet market needs, opportunities and challenges. The findings from this study are relevant to software product companies seeking ways to balance agility and product management. The findings also contribute to research on industrializing software engineering.     

Applying case based reasoning for prioritizing areas of business management

Determining the importance of different management areas in a company provides guidance about the needs of increasing the analysis and actions focuses in particular topic. To do it, it is necessary to decompose the management in a coherent set of specific management areas and provide a way that allows the company to determine the importance of these areas for them. This paper presents a novel system that guides companies to obtain a classification of important management areas for them. It is focused on the use of a case based reasoning system because the variability and the evolution of companies as time passes requires using techniques with learning capabilities. The proposed system provides an automatic self-assessment system that provides companies an ordered list of their most important management areas. This system was implemented a year ago for the evaluation of Spanish companies. Currently, it is in production providing relevant information about the management areas of these companies.     

The financial-economic crisis and value of equity capital: A case study of Slovenian public limited companies 2006–2011

The purpose of this paper is to discuss the effect of financial-economic crisis on the equity value of companies, as well as present the importance of fair and honest company valuations. The fundamental value of equity capital of a company is important for both management and external shareholders. The wide disparity between market and fundamental values can lead to high value adjustments, which reduces investors confidence in the capital market. This has had a negative impact on the operations of financial institutions, and individual as well as company investment; especially on developing financial markets during a financial-economic crisis. This research was designed to assess the equity value of Slovenian public limited companies based on the discounted free cash flows to equity and comparing it with market value of equity capital of companies before and during the financial-economic crisis. The fundamental value of equity capital of the selected companies (sample of 25) is calculated using a two-tiered model. The paired-sample t-tests method rejected the hypothesis that the fundamental value of equity capital of Slovenian public limited companies better reflects the market value of equity capital in today’s times of financial-economic crisis (2011) than before the crisis (2006). However, we found that the market value of equity capital in relation to the fundamental value of equity capital of the selected companies was lower in 2011 than in 2006. Various models of the basic calculations are used in the model evaluation. This study shows the problem of company valuation on small and emerging capital markets which have a short history of data.     

A heuristic approach for allocation of data to RFID tags: A data allocation knapsack problem (DAKP)

Durable products and their components are increasingly being equipped with one of several forms of automatic identification technology such as radio frequency identification (RFID). This technology enables data collection, storage, and transmission of product information throughout its life cycle. Ideally all available relevant information could be stored on RFID tags with new information being added to the tags as it becomes available. However, because of the finite memory capacity of RFID tags along with the magnitude of potential lifecycle data, users need to be more selective in data allocation. In this research, the data allocation problem is modeled as a variant of the nonlinear knapsack problem. The objective is to determine the number of items to place on the tag such that the value of the “unexplained” data left off the tag is minimized. A binary encoded genetic algorithm is proposed and an extensive computational study is performed to illustrate the effectiveness of this approach. Additionally, we discuss some properties of the optimal solution which can be effective in solving more difficult problem instances.     

Moving beyond the direct impact of using CRM systems on frontline employees' service performance: The mediating role of adaptive behaviour

Despite substantial investments in customer‐relationship‐management (CRM) systems, companies continue to experience pain rather than profit. Meanwhile, the concept of “adaptive behaviour” of frontline employees has received little attention in the literature related to CRM systems in which the frontline employees are the primary users. In this study, we propose that with the aid of CRM systems, individual employees are able to immediately access information about customers and service offerings, thus enabling their adaptive behaviours to provide personalized service to individual customers. Based on coping theory, we develop a CRM system‐driven adaptive behaviour model that explains how CRM systems facilitate individual employees' service performance by enabling adaptive behaviour during their service encounters. Multisourced data from a financial company in China largely support our proposed model, showing that employees' postadoption of CRM systems (routinization and infusion of use) enables interpersonal and offering adaptive behaviours, which in turn enhance employees' service performance. In addition, forming a postadoption behaviour of CRM systems relies on the frequent use. We discuss the theoretical and practical implications of adaptive behaviour in service encounters with the aid of CRM systems.     

Competitive advantage of enterprise resource planning vendors in Iran

Enterprise Resource Planning (ERP) has become one of the competitive advantages for companies around the globe and the dynamic force driving the process of global integration through information. Governmental organizations are increasing their adoption of these systems for various benefits such as integrated real-time information, better administration, and result-based management. Reaching the standard level of being a global company, organizations are concerned about this application and invest in this project for many years and, as a result, help the company reduce the cost and increase the efficiency and effectiveness. Iranian organizations, along with multi-national companies, attempt to be a good player in the flow of this change. The primary purpose of this study is to investigate and determine the competitive environment of ERP vendors implementing their product in Iranian context. The authors investigated the activities of both international and local ERP vendors established in the country and analyzed them by their advantages and potentials.     

Decisions on optimal adoption time for new technology

The rapid development of science and technology has brought a lot of convenience to the industry, and allowed companies to enhance their competitive advantages in the market. However, at some point in the growth stage, companies often reach a bottle neck of efficiency and effectiveness in production due to a saturated scale of economy, leading managers to face a decision of adopting more advanced technologies with consideration of market requirements and related costs. In this study, the adoption of a new technology is modeled as a decision problem in which related uncertain factors are considered to determine the optimal adoption time for the new technology. Bayesian decision analysis is used to integrate the subjective judgment of the decision maker and the objective information of the market. A practical case from a food and beverage company is illustrated to demonstrate the effectiveness of the proposed approach.     

Developing a Financial Statement-Based Effectiveness Measure of Interorganizational Systems' Contribution

Measuring the contribution of interorganizational systems (IOS) is challenging, and mainly based on subjective surveys. The purpose of this study is to objectively examine the effectiveness of IOS, through data from corporate financial statements. We developed a novel performance measure: an effectiveness ratio that reflects changes in average inventory level in comparison with change in annual sales. This measure reflects a certain aspect of improvement in supply chain management achieved by the evident developments of IOS, while considering external events that affected the companies. Two samples of American and Israeli companies were used for developing and empirically examining the suggested effectiveness ratio over 20 years (1993-2012). The results show considerable improvement as measured by the average effectiveness ratio of randomly selected American international companies in the cosmetics and toiletry products sector. However, the Israeli sample of food suppliers and importers, showed average marginal improvement, and major variance among the companies.     

基于数据融合的企业综合信息管理系统的研究

企业信息系统建设从办公自动化升级到业务承载,企业需要管理的数据越累越多.企业信息系统建设需要更加综合化和开放化.本文描述了数据融合的特征,及数据融合对企业经营管理的影响.并提出了基于数据融合的企业信息系统建设的措施建议.     

A study on security strategy in ICT convergence environment

In the knowledge and information society, the value of utilizing ICT technology in companies is being newly interpreted upon the convergence of business and information technology of companies. Accordingly, companies are ensuring corporate competitiveness by improving product productivity and reducing the consumption of human/physical resources through the change of strategic management environment using ICT technology. On the other hand, companies’ core information is being leaked outside of company from the convergence with ICT technology and its scale is increasing each year. Accordingly, the need for improving the level of security according to companies’ informatization level is increasing. However, studies are lacking on the composition of security strategy in suitable forms according to the scale of company and level of retaining resources. Accordingly, this study examined the security advancement steps to verify the present condition of companies’ security and design security strategy from a macroscopic perspective by improving the level of security according to the scale of company and present condition of resources.