Business intelligence systems and operational capability: an empirical analysis of high-tech sectors

Abstract

Purpose

In this research, we empirically examine the impact of Business Intelligence (BI) systems on operational capability in high-tech sectors. We also seek to understand the contextual factors that facilitate the adoption of BI systems.

Design/methodology/approach

We adopt Propensity Score Matching (PSM) and event study methodology, and analyze the financial data for a sample of 144 US firms which adopted BI systems from 2005–2014, and compare them to control firms without BI systems.

Findings

We find that the implementation of BI systems leads to higher operational capability, particularly for large high-tech firms with high technology intensity. We further show that technology intensity and firm size are important contextual factors for firms to reap the benefits of BI systems.

Practical implications

We demonstrate how benefits from the adoption of BI systems are likely to be strengthened. The benefits of BI systems depend on firms' technology intensity and firm size of high-tech firms. Accessing relevant and timely reports for decision-making is particularly important in the highly dynamic, volatile and competitive high-tech sectors.

Originality/value

We contribute to the literature by providing empirical evidence that the adoption of BI systems can improve firms' operational capability and show that technology intensity and firm size are important contextual factors for firms to reap the benefits of BI systems. We advance the understanding regarding the contextual factors in which firms are more likely to gain additional benefits from their adoptions of BI systems.

Citation

Yiu, L.M.D., Yeung, A.C.L. and Jong, A.P.L. (2020), "Business intelligence systems and operational capability: an empirical analysis of high-tech sectors", Industrial Management & Data Systems, Vol. 120 No. 6, pp. 1195-1215. https://doi.org/10.1108/IMDS-12-2019-0659