Amplifying organizational performance from business intelligence: Business analytics implementation in the retail industry

Abstract

PURPOSE: The concept of business analytics (BA) and business intelligence (BI) is just emerging in the Philippines. Since these are new concepts, it is important to investigate their impact on organizational performance and the performance metrics in business industry. The aim of this study is to examine the impact of business analytics generating business intelligence and how it affects organizational performance by developing a structural model. Consequently, the impact of organizational performance on other performance metrics was also established. METHODOLOGY: The partial least squares – structural equation modeling was utilized, which proposed a model that shows how business intelligence, generated by business BA, affects organizational performance, which consequently leads to improved marketing, financial, and business process performance. A survey was conducted on business analysts and executive managers of retail companies that have already been implementing BA for at least three years. FINDINGS: BA capabilities have a significant positive effect on the level of BI. BI has a significant positive effect on organizational performance. However, the result of the moderation analysis indicated that the level of readiness for BA implementation could not be considered a moderating factor on the relationship between BI and organizational performance. IMPLICATIONS: Out of the different BA capabilities, the decision support system and business process management were found to be the most beneficial functions in generating BI. BI amplifies organizational performance and consequently improves the marketing and business process performance of retail firms. However, the readiness for BA implementation does not significantly affect how BI improves organizational performance. Overall, it is recommended that in order to enhance marketing and business process performance, retail firms should focus on the BA capabilities of decision support system and business process management. ORIGINALITY AND VALUE: This would be the first empirical study in the Philippines which has assessed how business analytics and business intelligence impact organizational performance. This study is original in determining what BA capabilities generate BI, which translates to improved organizational performance. This study is also unique in defining what key performance metrics are much improved as a result of its implementation. This may serve as a viable reference for other researchers interested in business analytics and other technology about data management applied in business operations.