BENEFITS AND CHALLENGES OF BUSINESS INTELLIGENCE
ADOPTION IN SMALL AND MEDIUM-SIZED ENTERPRISES
Scholz, Patrick, HOERBIGER Holding AG / Chemnitz University of Technology,
Hannawaldweg 12, 09405 Zschopau, Germany, patrick.scholz@hoerbiger.com /
patrick.scholz@wirtschaft.tu-chemnitz.de
Schieder, Christian, Chemnitz University of Technology, Thueringer Weg 7, 09126
Chemnitz, Germany, christian.schieder@wirtschaft.tu-chemnitz.de
Kurze, Christian, Chemnitz University of Technology, Thueringer Weg 7, 09126 Chemnitz,
Germany, christian.kurze@wirtschaft.tu-chemnitz.de
Gluchowski, Peter, Chemnitz University of Technology, Thueringer Weg 7, 09126 Chemnitz,
Germany, peter.gluchowski@wirtschaft.tu-chemnitz.de
Boehringer, Martin, Chemnitz University of Technology, Thueringer Weg 7, 09126
Chemnitz, Germany, martin.boehringer@wirtschaft.tu-chemnitz.de

Abstract
Leveraging information is a key success factor for companies. Over the last two decades Business
Intelligence (BI) has evolved to become a foundational cornerstone of enterprise decision support.
However, prior research shows that small and medium-sized enterprises (SMEs), in particular, lag
behind in the proliferation of BI. In this exploratory study we examine BI adoption within German
SMEs in the state of Saxony (n = 214). We explore perceived benefits and challenges in their efforts to
implement BI. By applying cluster analysis to these results we suggest four types of BI SMEs, each
with an individual profile concerning potential benefits as well as a certain set of challenges that are
to be expected when it comes to adopting BI solutions. Results can create value for enterprises that
plan to implement a BI solution, BI consultants as well as BI suppliers.

Keywords: Business Intelligence (BI), exploratory factor analysis, cluster analysis, IT adoption, small
and medium-sized enterprises (SMEs).

1 INTRODUCTION
Small and medium-sized enterprises (SMEs) are the spine of the world’s economy. More than 95 per
cent of the enterprises in most economies belong to the group SME (European Commission 2008;
Kotelnikov 2007). Sixty-five percent of the total labour force is employed by about 140 million SMEs
in 130 countries (World Bank 2006). Particularly in times of global economic crisis, the vulnerability
of the so-called global players seems to become apparent. Since most SMEs support large enterprises
or provide specialty or outsourcing capabilities for larger companies (Huin 2004) as well as their
adaptive capabilities (Ritchie & Brindley 2005), they also provide the backbone for global economic
structures.
Business Intelligence (BI) as a concept provides a means to obtain crucial information to improve
strategic decisions and therefore plays an important role in current decision support systems (Inmon
2005). According to Kimball et al. (2008), the data warehouse industry – as the technological basis of
BI – has reached full maturity and acceptance in the business world. Additionally, a shift can be
observed towards putting the initiative to act into the hands of business users rather than Information
Technology (IT). Due to its complexity and – as a consequence – the high costs of implementation and
maintenance of BI and data warehouse solutions, the technology itself is used preferably by large
enterprises (Levy & Powell 1998; Hwang et al. 2004; Bergeron 2000). To the best of our knowledge,
there have not been any analyses focussing on the exploration of major BI benefits and challenges
with a special focus on SMEs on the level as covered below. Due to their importance to the global
economy and the benefits they could derive from proper utilisation of BI, we concentrate on this
special BI target group.
Our research questions are as follows: What are the general benefits perceived by SMEs and what
groups of challenges are to be expected when adopting BI? Which patterns characterise types of SMEs
that can benefit most from BI and which types of specific obstacles exist for these companies? To
answer these questions, we conducted an exploratory factor analysis as well as cluster analysis on a set
of companies based in the German state of Saxony. With a subject base of n = 214 we expect our
results to be well-founded. Answering our research questions is relevant to both academia and
practice. Academics gain a deeper insight into BI characteristics of SMEs and can align their research
to better support SMEs in decision making processes. Practitioners benefit from our research by
becoming aware of different enterprise types. These types may be used as a basis for developing new
BI solutions or adopting current solutions to better fit the company and better support its (strategic)
decisions. Overall, our research will help SMEs to better tackle problems with BI systems and specify
the benefits that they can expect from these kinds of systems.
2 RELATED WORK
2.1 Information systems success factors in SMEs
SMEs are defined by usage of qualitative and quantitative measures. We took the European Union
(EU) definition as our basis. The EU describes an SME as a company that has fewer than 250
employees and has either an annual turnover not exceeding €50 million or an annual balance sheet
total not exceeding €43 million (European Union 2003).
Information systems (IS) in SMEs have been addressed by a number of past works. They are mostly
based on special IS problems such as Internet adoption (Mehrtens et al. 2001; Dholakia & Kshetri
2004), system integration (Themistocleous & Chen 2004), or IS management (Bhagwat & Sharma
2006). In a more general approach, Lefebvre, Harvey, and Lefebvre (1991) identified four general
factors that influence the adoption of a new technology by SMEs: (1) the characteristics of the firm;
(2) the competitiveness and management strategies of the firm; (3) the influences of internal and
external parties on the adoption decision process; and (4) the characteristics of new technologies