Business Intelligence for Sustainable Competitive Advantage

346 Pages·2011·3.74 MB·English

Curtin Graduate School of Business

Business Intelligence for Sustainable Competitive Advantage:
The Case of Telecommunications Companies in Malaysia

Azizah Ahmad

This thesis is presented for the Degree of
Doctor of Philosophy
Of
Curtin University of Technology

June 2011
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Declaration

To the best of my knowledge and belief this thesis contains no material previously published
by any other person except where due acknowledgement has been made.

This thesis contains no material which has been accepted for the award of any other degree
or diploma in any university.

Signature:

Date:

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ACKNOWLEDGMENTS

I got the scholarship from University Utara Malaysia for continuing my doctoral degree at
the Curtin University of Technology in 2005. When I arrived at Curtin, I realized that I had a
big responsibility ahead of me for being a doctoral student and from thereon I spent five
stressful and meaningful years to achieve my degree. My study, however, was not
accomplished on my own. I wish to express my sincere gratitude and appreciation to all the
people who had helped me throughout my journey to achieve this goal.

My deepest appreciation goes to Prof Mohammed Quaddus, my supervisor. Thanks for
opening my view to the world of doing a quantitative research. Your continuous
supervision, kindness, patience, encouragement, support, understanding, and invaluable
guidance in carrying the process and in writing, reading and rereading my thesis could not
be expressed in words. My gratitude also goes to Dr. Norshuhada for her guidance,
friendship, proofing and enthusiasm in her encouragement, counsel, support, and direction
that guided me through the study.

Acknowledgement is also made for Curtin Business School, Graduate School of Business and
the staffs for their provision of knowledge, support and facilities. Special appreciation goes
to Ms. Jo Boycott for their caring and helps during my stay at Curtin. I also would like to
express my deep appreciation to my fellow members at fourth floor of Curtin Graduate
School of Business especially Eta, Keezah, Li Su, Eunice, Puspa, Nasir and Enayet. Without
their steady support and encouragement, this process would not have been materialized.
One of my greatest successes in taking a doctoral degree in Curtin was our friendships.

I sincerely extend my thanks to the participants of the field study and the Malaysian
telecommunication companies’ respondents as the research would not have been possible
without their valuable input.

Last but not least, my deepest thanks for my mom, mom-in-law and all my brothers and
sisters for being so understanding.

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DEDICATION

To Dad, Awon, Adek and Im….. whom I know that forever will love me… Your pure hearts
always motivate me to pursue our dream. I love you guys….. THIS is for US!

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Abstract

The concept of Business Intelligence (BI) as an essential competitive tool has been widely
emphasized in the strategic management literature. Yet the sustainability of the firms’
competitive advantage provided by BI capability is not well explained. To fill this gap, this
study attempts to develop a model for successful BI deployment and empirically examines
the association between BI deployment and sustainable competitive advantage.

Taking the telecommunications industry in Malaysia as a case example, the research
particularly focuses on the influencing perceptions held by telecommunications decision
makers and executives on factors that impact successful BI deployment. The research
further investigates the relationship between successful BI deployment and sustainable
competitive advantage of the telecommunications organizations. Another important aim of
this study is to determine the effect of moderating factors such as organization culture,
business strategy and use of BI tools on BI deployment and the sustainability of firm’s
competitive advantage.

This research uses combination of theoretical foundation of resource-based theory and
diffusion of innovation theory to examine BI success and its relationship with firm’s
sustainability. The research adopts the positivist paradigm and a two-phase sequential
mixed method consisting of qualitative and quantitative approaches are employed. A
tentative research model is developed first based on extensive literature review. Qualitative
field study then is carried out to fine tune the initial research model. Findings from the
qualitative method are also used to develop measures and instruments for the next phase of
quantitative method. A survey is carried out with sample of business analysts and decision
makers in telecommunications firms and is analyzed by Partial Least Square-based
Structural Equation Modeling.

The findings revealed that some internal resources of the organizations such as BI
governance and the perceptions of BI’s characteristics influence the successful deployment
of BI. Organizations that practice good BI governance with strong moral and financial
support from upper management will have better chance in realizing their dreams of having
successful BI initiatives in place. The scope of BI governance includes providing sufficient
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support and commitment in BI funding and implementation, laying out proper BI
infrastructure and staffing and establishing a corporate-wide policy and procedures
regarding BI. The perceptions about the characteristics of BI such as its relative advantage,
complexity, compatibility and observability are also significant in ensuring BI success. It
thus implied that the executives’ positive perceptions towards BI initiatives are deemed
necessary. Moreover, the most important results of this study indicated that with BI
successfully deployed, executives would use the knowledge provided for their necessary
actions in sustaining the organizations’ competitive advantage in terms of economics, social
and environmental issues.

The BI model well explained how BI was deployed in Malaysian telecommunications
companies. This study thus contributes significantly to the existing literature that will assist
future BI researchers especially in achieving sustainable competitive advantage. In
particular, the model will help practitioners to consider the resources that they are likely to
consider when deploying BI. Finally, the applications of this study can be extended through
further adaptation in other industries and various geographic contexts.

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TABLE OF CONTENTS
Chapter Page
1 INTRODUCTION 1
1.1 OVERVIEW 1
1.2 PROBLEM STATEMENT AND RESEARCH QUESTION 3
1.3 RESEARCH OBJECTIVES 5
1.4 SIGNIFICANCE OF RESEARCH 5
1.5 SCOPE OF RESEARCH 6
1.6 DEFINITIONS OF TERMS 6
1.7 STRUCTURE OF THE THESIS 7
1.7 SUMMARY 9
2 RESEARCH FOUNDATION: LITERATURE REVIEW 10
2.1 INTRODUCTION 10
2.2 BUSINESS INTELLIGENCE 12
2.2.1 Definition of Business Intelligence 16
2.2.2 Classification of Business Intelligence 21
2.2.3 The Intelligence Process 23
2.2.4 Business Intelligence Frameworks 24
2.3 BUSINESS INTELLIGENCE DEPLOYMENT 26
2.3.1 Successful BI Deployment 29
2.3.2 User Satisfaction as a Measurement of BI Success 30
2.4 ANTECEDENTS OF SUCCESSFUL BI DEPLOYMENTS 32
2.4.1 Firm’s Internal Resources 32
2.4.1.1 Quality BI Information 37
2.4.1.2 Quality BI Users 41
2.4.1.3 Quality BI Systems 42
2.4.1.4 BI Governance 44
2.4.2 Perceived Characteristics of the Innovation 47
2.4.2.1 BI’s Relative Advantage 48
2.4.2.2 BI’s Compatibility 49
2.4.2.3 BI’s Complexity 49
2.4.2.4 BI’s Triability 51
2.4.2.5 BI’s Observability 51
2.5 OTHER FACTORS RELATED TO BI SUCCESS 51
2.5.1 Organizational Culture 52
2.5.2 Use of BI Tools 53
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2.5.3 Business Strategy 55
2.6 BI-BASED KNOWLEDGE AND SUSTAINABLE COMPETITIVE ADVANTAGE 58
2.6.1 Sustainable Competitive Advantage and Social Responsibility 61
2.7 REVIEW OF UNDERLYING THEORIES 62
2.7.1 Resource-Based Theory (RBT) 63
2.7.2 Innovation Diffusion Theory 67
2.8 MALAYSIAN TELECOMMUNICATIONS INDUSTRY 69
2.8.1 Competition within Telecommunications Industry in Malaysia 70
2.8.2 Telecommunications Players 73
2.9 TELECOMMUNICATIONS INDUSTRY AND SUSTAINABLE COMPETITIVE
ADVANTAGE 75
2.9.1 Telecommunications Industry and Corporate Social Responsibility 76
2.9.2 Telecommunications Industry and Business Intelligence 77
2.10 SUMMARY 82
3 CONCEPTUAL FRAMEWORK AND PRELIMINARY RESEARCH MODEL 84
3.1 INTRODUCTION 84
3.2 CONCEPTUAL FRAMEWORK 84
3.3.1 THE PRELIMINARY RESEARCH MODEL 86
3.4 SUMMARY 90
4 RESEARCH METHODOLOGY AND DESIGN 91
4.1 INTRODUCTION 91
4.2 RESEARCH PARADIGM 91
4.3 RESEARCH METHOD 94
4.3.1 The Research Process 94
4.4 QUALITATIVE FIELD STUDY METHOD 98
4.4.1 Sample Selection 98
4.4.2 Data Collection 99
4.4.3 Analyses of Qualitative Data 100
4.5 QUANTITATIVE STUDY METHOD 101
4.5.1 Developing the Questionnaire 102
4.5.2 Pre-Test the Questionnaire 103
4.5.3 Sample Selection 103
4.5.4 Quantitative Data Collection 104
4.5.5 Response Rate and Data Examination 105
4.5.6 Quantitative Data Analysis 106
4.5.7 Partial Least Squares (PLS) Procedures 107
4.5.7.1 Assessment of Measurement Model 107
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4.5.7.2 Assessment of Structural Model 112
4.6 SUMMARY 113
5 THE FIELD STUDY AND MODIFIED RESEARCH MODEL 115
5.1 INTRODUCTION 115
5.2 THE OPERATION OF THE FIELD STUDY 116
5.2.1 Qualitative Research Paradigm 116
5.2.2 Interview Sample Demographics 117
5.2.3 Data Collection 118
5.3 DATA ANALYSIS VIA CONTENT ANALYSIS APPROACH 119
5.4 RESULTS AND INTERPRETATIONS 121
5.4.1 Factors and Variables 121
5.4.2 Perceived Relationships between Factors 130
5.4.3 The Construction of BI for Sustainable Competitive Advantage Model 131
5.5 THE FINAL COMBINED BI MODEL 134
5.5.1 Factors of Firm Internal Resources 136
5.5.1.1 Quality BI Information 137
5.5.1.2 Quality BI Users 139
5.5.1.3 Quality BI Systems 141
5.5.1.4 BI Governance 143
5.5.2 Perception of Innovation’s Characteristics 144
5.5.2.1 Perceived BI’s Relative Advantage 145
5.5.2.2 Perceived BI’s Complexity 145
5.5.2.3 Perceived BI’s Compatibility 146
5.5.2.4 Perceived BI’s Triability 147
5.5.2.5 Perceived BI’s Observability 147
5.5.3 Other Factors of Successful BI Deployment 148
5.5.3.1 Organizational Culture 149
5.5.3.2 Business Strategy 150
5.5.3.3 Utilization of BI Tools 151
5.5.4 Successful BI Deployment 153
5.5.5 Utilization of BI-Based Knowledge for Sustainable Competitive Advantage 154
5.6 SUMMARY 155
6 HYPOTHESES AND QUESTIONNAIRE DEVELOPMENT 156
6.1 INTRODUCTION 156
6.2 CONSTRUCTION OF HYPOTHESES 156
6.2.1 Hypotheses related to Firms Internal Resources 156
6.1.1.1 Quality BI Information 158
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6.1.1.2 Quality BI Users 159
6.1.1.3 Quality BI Systems 160
6.1.1.4 BI Governance 160
6.2.2 Hypotheses relating to Perceptions of Innovation Characteristics 162
6.2.2.1 Perceived BI’s Relative Advantage 163
6.2.2.2 Perceived BI’s Complexity 164
6.2.2.3 Perceived BI’s Compatibility 165
6.2.2.4 Perceived BI’s Triability 166
6.2.2.5 Perceived BI’s Observability 167
6.2.3 Hypotheses Relating to Successful BI Deployment 168
6.2.4 Moderating Influence of Organizational Culture, BI Tools
and Business Strategy 169
6.2.4.1 Hypotheses Relating to Organizational Culture 169
6.2.4.2 Hypotheses Relating to Business Strategy 171
6.2.4.3 Hypotheses Relating to Use of BI Tools 172
6.3 DEVELOPMENT OF RESEARCH INSTRUMENT 173
6.3.1 BI for Sustainable Competitive Advantage Questionnaire 174
6.3.2 Measurement of the Instruments 174
6.3.2.1 Quality BI Information 175
6.3.2.2 Quality BI Users 176
6.3.2.3 Quality BI Systems 177
6.3.2.4 BI Governance 178
6.3.2.5 Successful BI Deployment 179
6.3.2.6 Organizational Culture 180
6.3.2.7 Use of BI Tools 180
6.3.2.8 Perceived BI’s Observability 182
6.3.2.9 Perceived BI’s Triability 182
6.3.2.10 Perceived BI’s Complexity 183
6.3.2.11 Perceived BI’s Compatibility 184
6.3.2.12 Perceived BI’s Relative Advantage 185
6.3.2.13 Use of BI-based Knowledge for Sustainable Competitive
Advantage 186
6.3.2.14 Business Strategy 187
6.4 PRE-TESTING OF THE RESEARCH INSTRUMENT 189
6.5 SUMMARY 190
7 RESULTS OF ANALYSIS VIA STRUCTURAL EQUATION MODELING 191
7.1 INTRODUCTION 191
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