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COMPETITIVE BUSINESS INTELLIGENCE AND ANALYTICS SYSTEMS: A
STRATEGY FOR SMME ORGANIZATIONS
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COMPETITIVE BUSINESS INTELLIGENCE AND
ANALYTICS SYSTEMS: A STRATEGY FOR SMME
ORGANIZATIONS
Nelson Sizwe Madonsela, Kehinde Sobiyi and Bhekisipho Twala
University of Johannesburg, South Africa
ABSTRACT
Today, both the management of organizations and the public sector depend on real-time information, particularly
accurate information, for decision making. Most industries realize that the business environment is so complex
because of the influx of data from multiple sources, which needs to be collected, stored, analyzed, protected and
utilized for better decision making. Industries find it challenging to stay adaptive in such an environment and rely on
information they collect to make executive decisions. From a business perspective, data has become an asset for
competitive advantage. Accordingly, nowadays industries are adopting business intelligence and analytics (BI&A)
systems to mine data from multiple sources in order to make well-informed business decisions. The emphasis on BI&A
systems derives from the ability of BI&A tools, technologies, practices, methodologies and applications to provide
real-time accurate information and predict the future, which leads to better decision making. This information can be
related to customers, competitors and the business environment itself. It is believed that Small, Medium and Microsized Enterprises (SMMEs) are reluctant to adopt such technologies owing to the perception that BI&A systems are
very expensive and require expertise that they lack. The study reported on in this paper suggests a strategy for SMMEs
that will allow them to adopt competitive BI&A systems as a sustainable business strategy. The study demonstrates
different approaches to the adoption of BI&A systems and addresses inaccurate perceptions of BI&A, such as that
BI&A technologies are more costly than other technologies. A scientometrics analysis of BI was conducted using a
theory of knowledge for literature reviews in the IS domain. The findings suggest that competitive BI&A systems exist
in the majority of large-sized businesses, while SMMEs still struggle to implement or adopt BI&A tools. As a result,
these businesses are seeking appropriate ways of integrating BI&A tools that are more applicable to their business
nature. The study also shows the need for developing strategies that can enable SMMEs to adopt BI&A systems.
Therefore, this study proposes strategies for SMMEs to use in adopting BI&A tools to enhance competitiveness.
Keywords: competitive intelligence, business intelligence systems, business analytics, small business enterprises,
decision making, information analysis, decision support systems, knowledge discovery process, knowledge
management.
INTRODUCTION
Organizations’ management and the public sector depend for their decision making on real-time information,
particularly accurate information. Most industries realize that the business environment is as complex as it is because
of the influx of data from multiple sources. This data needs to be collected, stored, analyzed, protected and used for
better decision making. It is certain that industries find it challenging to stay adaptive in such an environment and rely
on information they collect to make executive decisions. From a business perspective, data has become an asset for
competitive advantage. Accordingly, nowadays industries and the public sector are adopting business intelligence and
analytics (BI&A) systems to mine data from multiple sources to make well-informed decisions. Over the past decades
the South African government has addressed issues of unemployment, underemployed and equity, which even today
present a challenge. The perception exists that small, medium and micro enterprises or SMMEs could be key players
in addressing some of these issues. In fact, SMMEs have been emphasized as a pillar for sustaining economic growth
by large economies such as New Zealand, Nigeria, Greece, the Czech Republic, Turkey and Malaysia, to name but a
few. For example, in Turkey 77 percent of the Gross Domestic Product (GDP) is contributed by SMMEs. In South
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Africa SMME contribution is at 63 percent while the private sector contributes 60 percent (Dilver, 2015). It is not
surprising then that South African academics are paying serious attention to SMMEs. This is evident from the
increasing number of studies regarding SMMEs, with a particular emphasis on the adoption and use of Business
Intelligence (BI) to sustain competitive intelligence in the SMME sector. It is almost certain that South Africa is not
lagging behind in terms of understanding the importance of BI. However, while Boonsiritomachai, McGrath and
Burges (2014) strongly argue that in the highly competitive marketplace making effective and instant decisions
requires BI applications, Grabova (2010, in Horakova and Skalska, 2013, p.50) is of the opinion that the “high price
for BI tools, difficult implementation and complex deployment are the reasons, why small and medium-size businesses
are seeking for their solutions” rather than adopting BI tools. With SMMEs in South Africa significant from both the
government and researchers’ perspectives and consensus that SMMEs can play a role in reducing poverty, addressing
job creation and strengthening economic growth – it is important to address the hindrances that prevent SMMEs from
using BI systems. In 1995, the South African government released a White Paper on National Strategy for the
Development of Small Business in South Africa, which suggested that the hindrances to SMME sustainability are a
lack of skills and admittance to suitable technology along with poor infrastructure and policies. Chimucheka and
Mandipaka investigated the challenges faced by SMMEs, discovered that there is a “lack of support from key
stakeholders” (2015, p.309). There is sufficient evidence that these issues need a collective approach from all
stakeholders such as government and the private and public sectors, along with academics, who we believe are experts
in understanding some of these hindrances. This paper addresses the technological aspect by proposing a strategy for
SMME organizations through the lens of competitive BI&A systems or applications. The study intended to establish
approaches that SMMEs can utilize to take advantage of these advanced tools to forecast or predict the future to
strategize on how to drive improvement. The paper also addresses the perception that BI&A tools are expensive and
complex to deploy. The paper has been structured into five main parts, beginning with the introduction, which
highlights the importance of SMMEs in both developed and developing economics and presents the problem statement
and the rationale for the study. The second part, the literature review, provides the theoretical framework that informs
the proposed competitive BI&A systems. The third part of the paper concerns the methodology adopted for this study.
The fourth part highlights the findings and the paper concludes with recommendations for future research.
PROBLEM STATEMENT
SMMEs appear unable to sustain business in South African despite the support provided by government, such as
incubator programs and financial assistance. This inability can be associated with the lack of knowledge management
and use of advanced technologies as evidenced by the high failure rate, with Chimucheka and Mandipaka observing
in 2015 that 70 percent of SMMEs fail within three years. Clearly this raises a serious concern as well as the question:
where are the stakeholders? As academia what can we do to assist the SMME sector? Because in the 21st century era
the business environment is volatile and “pressures to accelerate performance have led many organizations to enhance
their performance management practices and adopt Business Intelligence and Analytics technology to improve
decision making process” (Abi, Yahaya & Deraman, 2015, p.5), it is vital to play our part as BI&A experts with the
belief that the proposed strategy might address some of the issues. In addition, the paper enlightens SMMEs about
several approaches that can be of assistance with regard to competitive intelligence and sustainable business
advantage.
SIGNIFICANCE OF THE STUDY
The study is vital for the development of strategy that will enable SMMEs to strengthen their competitive advantage
and for innovation to generate new ideas that will lead to sustainability. Equally, this approach might have a significant
impact on job creation and poverty alleviation and consequently enhance economic growth. It has been noted that
some business owners fall short of adequate skills for managing for quality and performance excellence. Thus, the
proposed strategy aims at incorporating experts that will empower SMMEs. The University of Johannesburg
academics have already started a project that puts this into practice in Soweto, the largest township in South Africa.
In this project, university graduates are involved in their community, empowering the business owners of sewing
cooperatives. On the basis of the growth of researchers in BI, it can be said that South African researchers can
definitely provide the necessary expertise to strengthen SMMEs.
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LITERATURE REVIEW
The literature review was conducted in the form of a scientometric analysis in which the researchers mapped the
progression of BI over the past 40 years using the Scopus database. Prakash and Nirmala (2015) define scientometric
analysis as an empirical study of a field’s literature, which entails the quantification of the published knowledge.
Cronin, Ryan and Coughlan (2008, p.39) concede the usefulness of such an approach but specify that “systematic
review should detail the time frame within the literature was selected, as well as the methods used to evaluate and
synthesize findings of the studies in question”. Mapping the progression of BI broadens the understanding of the BI
application usage and establishes what industries are using BI&A systems. In addition, the scientometric analysis
indicates the areas that have been adequately addressed and the aspects that have been overlooked or understudied, in
order to identify a gap in the literature. The study adopted Levy and Ellis’s (2006) systematic approach to conducting
an effective literature review within the IS domain, which was incorporated within the scientometric analysis. These
authors argue that an effective literature review “creates a firm foundation for advancing knowledge. It facilitates
theory development, closes areas where a plethora of research exists, and uncovers where research is needed” (2006,
p.182). As a result, this “input-processing-output” approach of Levy and Ellis (2006) was integrated into the
scientometric analysis.
a) Business Intelligence and Analytics
Kumari (2013, p.969) defines BI “as the ability for an organization to take all its processes and capabilities
and then convert these into knowledge, ultimately getting right information for the right people, at the right time,
through the right channel”. The key words in the above definition are knowledge and information. We are of the
opinion that SMMEs lack knowledge management and the ability to access accurate information for better decision
making. Concerning the progression of the BI field, there has been a significant progression in terms of the empirical
studies in different sectors such as finance, agriculture, health, the public sector and the private sector, to name but a
few.
Different meanings have been assigned to BI. For example, according to Nedelcu (2013, p.12), BI “presents
a wide area of applications and technologies for collecting, sorting, analyzing and providing access to information for
improving process modeling quality”. Joseph (2013) is of the opinion that BI encompasses the technologies and
applications that enterprises can use for data collection, storing and analyzing for better decision making. In contrast,
Dawson and Belle argue that BI is more than the multiple tool but “the effective deployment of organizational
practices, processes, and technology to create knowledge base that supports the organization” (2013, p.2). In other
words, BI focuses on exploring a vast amount of data from multiple sources and analyzing it for accurate decision
making. However, it cannot predict the future. The complexity of the economic environment is constant changing
thanks to the “accelerating pace of change, globalization, information flow, new economy, networking and
proactivity” (Pirttimaki, 2007, p.2). Such an evolving environment requires advanced tools that can forecast the future,
so it is not surprising that the IS domain introduced the concept of analytics. Analytics “refers to the skills,
technologies, applications and practices for continuous iterative exploration and investigation of data to gain insight
and drive business planning” (2015, p.2). As BI is limited to addressing these drivers, recent studies advocate the
merging of BI and analytics to achieve BI&A in order to address the deficiency. It is certain that the BI field has
progressed significantly and has integrated other fields such as business analytics and advanced analytics. The graph
depicted in Figure 1 below shows the cumulative growth of the BI field over the past 40 years according to the Scopus
database, which indicates that 4,807 journals were published in the field. Attachment 1 presents a table of the
cumulative data. In recent years, BI has gained popularity in academia as well as the industries.
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Figure 1: The cumulative growth of BI over the past 40 years
The cumulative growth shows that there is an increasing interest in BI; hence, these studies have been
conducted from various industries as mentioned earlier. Today businesses focus on BI&A for sustainable competitive
advantage or for survival. According to Chen, Chiang and Storey (2012), over the past two decades the academic and
business communities have been paying serious attention to the concept of big data, which is linked to BI&A. These
authors define BI&A “as the techniques, technologies, systems, practices, methodologies, and applications that
analyze critical business data to help an enterprise better understand its business and market and make timely business
decisions” (2012, p.1166). The BI&A approach is useful because it advocates that SMMEs integrate these key
elements, considering that the unpredictable business environment requires real-time data. In fact, accurate data failure
can be detrimental. Therefore, this study argues that competitive BI&A systems are the appropriate strategy for the
SMME sector to adopt in order to flourish in the current economic environment and to build a culture of sustainable
competitiveness.
b) Business Intelligence and Analytics in SMMEs
The SMME sector is one of the multiple pillars of economic growth in both developed and developing
economies. In particular, the South African government has been promoting the development of SMMEs through
incubator programs that foster entrepreneurship in most of the country’s townships. This is evidenced by the release
of the White Paper on National Strategy for the Development and Promotion of Small Business in South Africa, which
highlights the policy and strategy framework for the sustainability of SMMEs. In addition, the White Paper
acknowledges the challenges that have been hindering the advancement of this sector, equally, proposing a collective
strategy that will strengthen it along with the economic growth of the entire country. In fact, many economies such as
Turkey, Nigeria, the Czech Republic, Spain, Malaysia and Australia are paying serious attention to the SMME sector,
with a particular focus on the adoption of technology and specifically BI (Cuyvers et al., 2008; Horakova & Skalska,
2013; Boonsiritomachai, McGrath & Burgess, 2014; Dilver, 2015;Chimucheka & Mandipaka, 2015; Hatta, Mikson,
Ali, Abdullah, Ahmad, Hshim, Alias, Maarof, 2015; Antoniadis, Tsiakiris & Tsopogloy, 2015). Accordingly,
Cuyvers, Dumount, Viviers, Pelsmacker, Muller, Jegers and Saayman (2008) claim that competitive intelligence
associated with BI enables businesses to predict competitors and gain strategic advantage. Horakova and Skalska
(2013) suggest that crucial to the adoption of BI by SMMEs is job creation. These authors contend that “usage of BI
among the small and medium enterprises is going to increase in the future as software vendors start to focus on this
market segment”(2013, p.51). Meanwhile those SMMEs that adopt BI will be able to enhance productivity and
innovation. Interestingly, BI is covered by a broad spectrum of industries such as manufacturing, health services,
telecommunication, and IT companies, the banking sector and insurance industry to name but a few (Horakova &
Skalska, 2013). As a result, researchers have provided sufficient framework and theories for the adoption and usage
of BI&A by SMMEs, which shows that those theories have been thoroughly covered, in fact, in both developed and
developing economies.
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Yet, there are still challenges with the sustainability of SMMEs, which we believe are associated with the
inability of SMMEs to incorporate an enabling infrastructure that embodies elements of continuous and relevant
improvement. At this point, we would like to subscribe to the KPMG (2016) notion that businesses adopt BI&A tools
to establish a better understanding of the economic environment they operate in. In fact, a better understanding of the
economic environment can be expected to enhance the knowledge diffusion and the BI capabilities, in particular with
the assistance of BI experts.
METHODOLOGY
An empirical study design of a literature review using a scientometric analysis of the BI field over the past 40 years
was adopted. This is viewed as a systems approach to conducting an effective literature review within the IS domain.
These methods are covered in the previous section. The Scopus database was selected as one of the largest databases
in the world to establish the progression of BI and to identify the underpinned theories and the gaps in the literature.
According to Scheryen, Wagner and Benlian (2015), it is imperative to build theory from an epistemological model
of a domain. Likewise, the study employed a theory of knowledge for literature reviews, which derives from the IS
discipline. These methods were used to triangulate the study and to ensure relevancy by considering journals published
under the IS domain.
Figure 2: Epistemological model
Figure 2 depicts the epistemological model adopted for the literature review. The synthesis stage entails the
establishment of the concepts, sub-concepts and variables of the understudied field, with particular focus on the
domain to institute the relationships. The “adopting a new perspective” stage interprets the relationships of the concept
to articulate the findings with the aim of generating a new perspective of what has been overlooked. A researcher can
thereafter build new theories and test them. The next stage is to identify research gaps, which is vital for adding value
to the body of knowledge and the domain. Lastly, the providing of a research agenda entails suggestions for future
research that the study could not cover. In accordance with the aims of the study, the epistemological model was
applied.
RESULTS AND DISCUSSION
The SMME sector has become a main pillar of economic growth for both developed and developing economies, with
the notion that this sector can address issues associated with poverty, unemployment and underemployment. We have
observed the significant increases of study aimed at determining strategies, framework, policies, and regulations to
create an enabling environment for the development and promotion of SMMEs in South Africa. In fact, worldwide,
economies are paying serious attention to SMMEs for sustainable economic growth. Equally, academia has been
investigating best practices, technologies, and techniques that are appropriate for the sector as well as identifying the
shortfalls of the sector and proposing solutions. However, these solutions need to be contextualized by country due to
environmental dynamics, which involve constraints that economies must address locally. Thereafter, it will be
appropriate to integrate new approaches such as BI&A with the acquisition of talent and nurturing of entrepreneurship.
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In terms of the adoption and usage of BI&A, seemingly there has been extensive awareness and emphasis on these
within SMMEs and businesses generally. Studies have shown that competitive intelligence enables enterprises to make
better decisions and improve business performance. However, there are still challenges with the required skills, limited
policy, and knowledge management by SMMEs. From this perspective, we propose the engagement of academia to
address some of these challenges as we believe that academic institutions have the capabilities to provide the
appropriate solutions. It has been shown that business environments and economic environments are constantly
changing thanks to the advancement of technology. Therefore, SMMEs need to adapt or they will become obsolete.
A KPMG study recommends that businesses need to “keep track of the operational aspects of running the business,
while continuously innovating and striving for new business models to change and renew the business in order to say
ahead” (KPMG, 2015, p.1). Being able to incorporate these views means that SMMEs need to adopt competitive
BI&A systems as a strategical management policy. Abai, Yahaya and Deraman (2015, p.5) concede that managing
business performance requires BI&A to “ensure management is constantly alert of any instability of achievements”.
It is possible that BI&A tools address the high failure rate of SMMEs because, with the warning systems they
incorporate, the owner can predict challenges and implement interventions. Furthermore, these authors assert that
performance management practices are the key to business sustainability. At this point, we would like to raise some
objections that might come to mind for skeptical readers. They may think, for example, that we have overlooked the
objection that these BI&A tools are expensive. In fact, there are open source programs that the SMMEs can adopt,
which simply require customization. With the involvement of academics, experts in BI&A may be a successful
intervention that might cost less. Meanwhile these graduates have the opportunity to highlight their talent. This
approach has been adopted by many developed economies such as Britain and the United States of America in their
manufacturing sectors. Accordingly, the SMME sector could adopt the same approach rather than relying on strategies
that are not sustainable. Of course, researchers might challenge this philosophical thinking while neglecting the deeper
problem of decolonization of knowledge. We need to reassess the relevance of our theories rather than replicating
practices and policies without enabling infrastructure. In this particular study, what informed the researchers was the
progression of studies of BI adoption and usage within SMMEs in South Africa. Reverting to our methodology,
specifically the epistemological model, we noted a research gap in the experimental or simulation aspects of these
BI&A tools in SMMEs. Hence, a study within the public sector has been initiated in which open source software has
been identified for simulation to encapsulate the view of the citizen in terms of service delivery. To summarize, the
current economic era is an era of competitive BI&A. Experts inform us that BI&A derives from analytics that have
been revised to advanced analytics with capabilities of automatic knowledge discovery from structured and
unstructured data (RapidMiner, 2015). While that is a high level of analytics, which might be difficult for SMMEs to
comprehend now, it is an excellent tool for future prediction.
CONCLUSION AND RECOMMENDATIONS
This paper aimed at exploring the competitive BI&A systems as a strategy for South African SMMEs. The
adoption and usage of BI&A are imperative for these SMMEs in order for them to establish a broader
understanding of business environment dynamics and to identify advanced strategies that address the
challenges associated with business sustainability. Considering the high failure rate of startup SMMEs and
the fact that SMMEs are one of the main contributors to GDP in a large number of countries, a
comprehensive literature review was conducted using a scientometric analysis of the BI field with the notion
that SMMEs around the globe are turning to these advanced technologies for competitive advantage.
Findings suggest that, with BI, SMMEs can integrate multiple processes and business capabilities into
knowledge for better decision making. The current unpredictable business environment demands the right
information at the right time. Along these lines, applications and technologies have the capabilities of
collecting, sorting and analyzing for better decision making as they focus on exploring vast amounts of data
from multiple sources and analyzing it for accurate decision making. However, these systems cannot predict
the future. The study also revealed that there has been a significant progression in terms of empirical studies
in different industries such as finance, agriculture, health, and the public sector and private sector, to name
but a few. We have also noted the emerging of BI and analytics, introducing the new concept of BI&A to
address the limitations of BI. It is worth mentioning that the study showed an increase in South African
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research on BI&A, in particular within SMMEs. However, these are shortcomings pertaining to the
execution of the implementation of BI&A in a South African context. Therefore, future research should
focus on the technical and skills deployment aspects of BI&A with the incubator programs to empower
SMMEs with adequate skills to use these technologies. This strategy might address the high failure rate of
SMME startups as well as sustaining the existing ones. Although the South African government has been
building enabling infrastructure for SMMEs, skills deployment still presents a challenge, especially
regarding the use of BI&A. In fact, there has been a lot said about the advantages of BI&A, with less
mentioned about practical implementation, which could be the reason for the high failure rate of BI&A
implementation. This still needs to be investigated.
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