Enablers affecting the adoption of Business Intelligence

286 Pages·2015·2.61 MB·English

Enablers affecting the adoption of
Business Intelligence: a study of Thai small
and medium-sized enterprises

Waranpong Boonsiritomachai
Bachelor of Science (Computer Science)
Kasetsart University, Thailand

Master of Business (Business Information Systems)
The University of Sydney, Australia

Submitted in partial fulfilment of the requirements of the degree of
Doctor of Business Administration

College of Business
Victoria University
Melbourne, Australia

2014
ABSTRACT

Complexities in making effective and timely business decisions in highly competitive markets
have driven many organisations to adopt data-driven, decision-making processes using
Business Intelligence (BI) applications. Despite these applications being suited for use in most
organisations regardless of size, only larger enterprises have reached a stage of maturity in BI
use, while small and medium-sized enterprises (SMEs) still lag behind. Although there is a rich
body of literature on information technology (IT) adoption and implementation, literature
relating to BI adoption, especially in the SME context, remains limited. This study addresses
the lack of a research framework for examining the current state of BI adoption and the
identification of factors influencing decisions for BI adoption in SMEs. To address this
research gap and support the adoption rate of BI in SMEs, the study develops a comprehensive
research framework for categorising SMEs into different levels of BI adoption and explores the
enabling factors that influence BI adoption in SMEs. In order to classify organisations into
different BI levels, this study applies the information evolution model (IEM) used widely by
practitioners to evaluate the levels of BI adoption in organisations. In investigating factors
involved in adoption decisions, the study employs a multiple-perspective framework based on
three adoption models, including the diffusion of innovation (DOI) theory, the technology-
organisation-environment (TOE) model, and the information systems adoption model for small
business. The developed research framework contains eleven enabling factors covering four
characteristics: technological innovation, environment, organisation, and owner-managers.

This study employed a quantitative methodology through a survey technique. The survey
questionnaire was developed based on previous similar studies and relevant literature, and was
reviewed by five BI market specialists. The sample was randomly selected from publicly
accessible lists obtained from the Thailand Office of Small and Medium Enterprise Promotion
(OSMEP) database. Empirical data were collected by using self-administered questionnaires,
and data analysis was based on 427 SMEs in Thailand. The analysis used descriptive statistics
and inferential statistics, including multinomial logistic regression and the Kruskal-Wallis (K-
W) test.

The findings revealed interesting insights into an understanding of BI-adoption decision-
making among Thai SMEs. From the five levels of BI adoption based on the IEM model,
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respondents were categorised into the three lower levels, namely Operate, Consolidate and
Integrate – indicating that Thai SMEs are at an early stage of BI technology adoption. From the
eleven factors, analysis indicated that seven are important in the decision-making in BI
adoption. These factors are: relative advantage, complexity, observability, competitive
pressure, vendor selection, organisational resource availability, and owner-managers’
innovativeness.

The findings of this research can contribute to a better understanding of BI adoption in the
context of SMEs, particularly in the developing countries of South East Asia, and specifically
Thailand. This empirical investigation can lead to a more comprehensive research model for
providing guidance to the Thai government, IT providers and relevant agencies encouraging
Thai SMEs to adopt BI technologies. Moreover, the study model can provide a tool for future
research in the adoption of relevant technologies. Furthermore, as this research has been
conducted in the context of Thailand, further comparative research is needed in other regions of
the world to determine the extent to which BI adoption in SMEs is affected by cultural,
economical, political, and technological patterns.

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DECLARATION

“I, Waranpong Boonsiritomachai, declare that the DBA thesis entitled Enablers affecting the
adoption of Business Intelligence: a study of Thai small and medium-sized enterprises is no
more than 65,000 words in length including quotes and exclusive of tables, figures, appendices,
bibliography, references and footnotes. This thesis contains no material that has been submitted
previously, in whole or in part, for the award of any other academic degree or diploma. Except
where otherwise indicated, this thesis is my own work”.

Signature……………………………………

Waranpong Boonsiritomachai
28 January 2015

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DEDICATION

To my angel father Peera

To my great mother Arunee

To my wonderful brothers, sister, nephew and friends

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ACKNOWLEDGEMENTS

Many people have contributed to this journey through my doctoral study. I would like to
acknowledge and extend my heartfelt gratitude to those people who have made it all possible.

First and foremost, I wish to express my deepest gratitude to my beloved father, Peera
Boonsiritomachai, for encouraging me to undertake this doctoral degree. You have always
believed in my abilities and encouraged me to pursue my dreams by telling me that nothing can
stand in my way if the will to achieve is there. Even though you passed away before you had
the chance to see me successfully achieve my goal, I am grateful for your encouragement and
hope you are proud of me, where ever you may be now. Your love, teaching and merit will be
in my heart forever.

Second, I would like to thank my principal supervisor, Professor Michael McGrath, for
accepting me as his student. You gave me the freedom to explore on my own and have
simultaneously given me guidance to recover when my steps faltered. My gratitude also goes to
my associate supervisor, Associate Professor Stephen Burgess, for sharing his vast knowledge
of information technology in small and medium-sized enterprises, both theoretical and
practical. You both have always given brilliant insights and feedback that have provided clear
direction for improving my thesis. I also extend my gratitude to Dr Joze Kuzic from the Faculty
of Information Technology at Monash University who devoted his time to introduce and
suggest suitable statistical techniques used for analysis in this thesis. Also, I am deeply
thankful to Dr Petre Santry, who shared her expertise and advice on thesis writing.

Third, I would like to thank the Royal Thai Embassy and the Asia Institute at the University of
Melbourne for their generosity in supplying the 2012 Thai Studies Field Research Grant, the
funding from which supported me while I completed this thesis.

Unforgettably, I must mention my special thanks to all the owner-managers of small and
medium-sized enterprises in Thailand who dedicated their precious time to complete the
questionnaires that led to a satisfactory response rate. Your assistance allowed me to provide
valid and meaningful research.

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Special thanks go to my closest friend, Gerald Lim Tuck-Cheun, who has always been beside
me with moral support. You always give me valuable comments on my study and helped me
proofread and edit my thesis. You have also shown me what Australia offers outside the simple
student life – exploring not only Melbourne, but also many parts of Australia where I had never
been, despite studying in both Sydney and Melbourne. I have learned a lot from our
experiences together.

Finally, I would like to thank my family who has given me great support and positive
encouragement throughout this long endeavour. For my wonderful mother, Arunee
Boonsiritomachai, you are the most important person in my life. You continually give love,
care and support, without which I would never be where I am today. When I lost my beloved
father, you showed me how strong you are without him, and that life needs to continue. That
strength I have since drawn on to persist and complete this doctoral degree. Your kindness and
intelligence amaze me, and for these and many other reasons you are my life’s role model. For
my two elder brothers, Panuwat and Watchara, I am deeply indebted. You have always
supported me and helped me worry less about our mother while I have been overseas. You
have both looked after our mother and taken on the responsibilities of our father during the
toughest time of our lives. For my elder sister, Raweewan, brother-in-law Dr Sujin, and first
nephew Teerawat, you have always been there when I needed you most, and each day I get
inspiration from the great conversations we have.

To the many other people who have contributed positively to my life, I am appreciative of your
encouragement and strongly express my gratitude to each one of you.

Thank you,
Waranpong Boonsiritomachai

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PUBLICATION AND AWARDS

Publication

Boonsiritomachai, W, McGrath, GM, Burgess, S, 2014, ‘A research framework for the
adoption of Business Intelligence by Small and Medium-sized Enterprises’, Proceedings of the
27th Small Enterprise Association of Australia and New Zealand (SEAANZ) conference, 16–18
July, Sydney, Australia, pp. 1–22.

Awards

1. Thai Studies Field Research Grant, the Royal Thai Embassy and the Asia Institute at the
University of Melbourne, 2012

2. The Secomb Conference and Travel Fund, Victoria University, 2014
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TABLE OF CONTENTS

ABSTRACT............................................................................................................................... i
DECLARATION ..................................................................................................................... iii
DEDICATION ........................................................................................................................ iv
ACKNOWLEDGEMENTS ......................................................................................................v
PUBLICATION AND AWARDS .......................................................................................... vii
TABLE OF CONTENTS ...................................................................................................... viii
LIST OF ABBREVIATIONS ............................................................................................... xiii
LIST OF TABLES .................................................................................................................xiv
LIST OF FIGURES ...............................................................................................................xvi
CHAPTER 1: INTRODUCTION .............................................................................................1
1.0 Background ........................................................................................................1
1.1 Research problem ...............................................................................................3
1.2 Research aim and objectives...............................................................................4
1.3 Contribution to research knowledge ...................................................................4
1.4 Significance of the study ....................................................................................6
1.5 Scope of the study ..............................................................................................7
1.6 The structure of the research ..............................................................................7
1.7 Chapter summary ...............................................................................................9
CHAPTER 2: INFORMATION TECHNOLOGY AND COMPETITIVE ADVANTAGE 10
2.0 Introduction ..................................................................................................... 10
2.1 Information technology as a competitive advantage.......................................... 10
2.2 Framework for using IT as a competitive advantage ......................................... 11
2.3 Framework for a value chain in IT ................................................................... 13
2.4 Growth of strategic opportunities in IT ............................................................. 15
2.5 IT as a resource for increasing firm performance .............................................. 18
2.5.1 The resource-based view (RBV) perspective ........................................... 18
2.5.2 IT competencies and capabilities ............................................................. 20
2.5.3 Dissenting perspectives ........................................................................... 20
2.6 Chapter summary ............................................................................................. 22
CHAPTER 3: BUSINESS INTELLIGENCE ........................................................................ 23
3.0 Introduction ..................................................................................................... 23
3.1 The evolution of business intelligence systems ................................................. 23
3.1.1 Management information systems (MIS) ................................................. 24
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3.1.2 Decision support systems (DSS) ............................................................. 25
3.1.3 Executive information systems (EIS) ...................................................... 26
3.2 Definitions of business intelligence .................................................................. 27
3.3 Key components of the BI system .................................................................... 31
3.4 The benefits of BI ............................................................................................ 33
3.4.1 Tangible benefits of BI ............................................................................ 34
3.4.2 Intangible benefits of BI .......................................................................... 36
3.5 Barriers to widespread use of BI ....................................................................... 39
3.5.1 Data integration and sharing .................................................................... 39
3.5.2 Communicating BI value......................................................................... 39
3.5.3 Complexity of BI .................................................................................... 40
3.5.4 Cost of BI ............................................................................................... 40
3.6 The levels of BI adoption ................................................................................. 41
3.7 Business intelligence maturity models .............................................................. 42
3.8 Information evolution model (IEM) ................................................................. 44
3.9 BI as a source of competitive advantage ........................................................... 53
3.10 Chapter summary ............................................................................................ 55
CHAPTER 4: SMALL AND MEDIUM-SIZED ENTERPRISES ........................................ 57
4.0 Introduction ..................................................................................................... 57
4.1 Small and medium-sized enterprises’ background ............................................ 57
4.2 Definitions of SMEs ......................................................................................... 58
4.3 SMEs characteristics ........................................................................................ 59
4.4 Information Technology and BI as competitive advantage for SMEs ................ 61
4.5 The implementation of BI in SMEs .................................................................. 62
4.6 The situation of IT in Thai SMEs ..................................................................... 64
4.7 Chapter summary ............................................................................................. 64
CHAPTER 5: THEORETICAL FRAMEWORK ................................................................. 66
5.0 Introduction ..................................................................................................... 66
5.1 Definition of ‘innovation’................................................................................. 66
5.2 Theoretical background of the diffusion of innovation theory ........................... 67
5.3 Adoption of innovation theory.......................................................................... 68
5.3.1 Theory of reasoned action (TRA) ............................................................ 69
5.3.2 Theory of planned behaviour (TPB) ........................................................ 69
5.3.3 Technology acceptance model (TAM)..................................................... 70
5.3.4 Diffusion of innovation (DOI) theory ...................................................... 71
5.3.5 Evaluation of theories in the context of this thesis ................................... 74
5.4 Multiple perspectives in diffusion of innovation ............................................... 76
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