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Scientia Iranica E (2011) 18 (6), 15791590

Sharif University of Technology


Scientia Iranica
Transactions E: Industrial Engineering
www.sciencedirect.com

A tool to evaluate the business intelligence of enterprise systems


M. Ghazanfari, M. Jafari, S. Rouhani
Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran

Received 28 February 2011; revised 31 July 2011; accepted 10 September 2011

KEYWORDS Abstract Most organizations still experience a lack of Business Intelligence (BI) in their decision-
Business intelligence; making processes when implementing enterprise systems, such as Enterprise Resource Planning (ERP),
Decision support; Customer Relationship Management (CRM), and Supply Chain Management (SCM). Consequently, a
Enterprise systems; model and techniques to evaluate and assess the intelligence-level of enterprise systems can improve
Evaluation tool. decision support. This paper proposes an expert tool to evaluate the BI competencies of enterprise
systems, and combines a comprehensive review of recent literature with statistical methods for factor
analysis. A statistical analysis has identified six factors for the evaluation model: Analytical and
Intelligent Decision-support, Providing Related Experimentation and Integration with Environmental
Information, Optimization and Recommended Model, Reasoning, Enhanced Decision-making
Tools, and finally, Stakeholder Satisfaction. Utilizing the extracted loads of each unique criterion, the
intelligence of the work systems can be measured and depicted on six dashboards, based on corresponding
factors, actualizing an expert tool that can diagnose the intelligence level of enterprise systems. Enterprises
can use this approach to evaluate, select, and buy software and systems that provide better decision
support for their organizational environment, enabling them to achieve competitive advantage.
2012 Sharif University of Technology. Production and hosting by Elsevier B.V.
Open access under CC BY-NC-ND license.

1. Introduction competitive advantage when making important decisions, it is


vital to integrate decision support into the environment of their
Nowadays, information and knowledge represent the funda- enterprise and work systems. Business Intelligence (BI) can be
mental wealth of an organization. Enterprises try to utilize this embedded in these enterprise systems to obtain this competi-
wealth to gain competitive advantage when making important tive advantage [3,4].
decisions. Enterprise software and systems include Enterprise In the past, Decision-Support Systems (DSS) were indepen-
Resource Planning (ERP), Customer Relationship Management dent systems within an organization and had a weak rela-
(CRM), and Supply Chain Management (SCM) systems. These tionship with other systems (island systems). Now, enterprise
systems convert and store the data in their databases; there- systems are the foundation of an organization, and practitioners
fore, they can be used as a pool of data to support decisions and design and may implement BI as an umbrella concept to cre-
explore applicable knowledge [1,2]. With the potential to gain ate a comprehensive decision-support environment for man-
agement [1,5]. Based on the ideas of Alter [1], and the research
carried out on the non-functional requirements of enterprise
Correspondence to: Department of Industrial Engineering, Iran University
software and systems by Jadhav and Sonar [6,7] and also by
of Science and Technology, No. 43, Reyhani Pamchi Allay, Allameh Amini St,
Sen et al. [8], todays approach to decision support as a sepa-
West Mobarez St, Abouzar Blv 17789-14361, Pirouzi Ave, Tehran, Iran. Tel.: +98
9122034980; fax: +98 2177959502. rate, individual system, such as DSS, has been replaced by a new
E-mail address: SRouhani@iust.ac.ir (S. Rouhani). approach. This new approach creates an integrated decision-
support environment, and takes the intelligence requirements
1026-3098 2012 Sharif University of Technology. Production and hosting by of enterprise systems into consideration. Kahraman et al. [9]
Elsevier B.V. Open access under CC BY-NC-ND license.
have also discussed the roles of intelligence techniques to ob-
Peer review under responsibility of Sharif University of Technology.
tain a successful business strategy in enterprise information
doi:10.1016/j.scient.2011.11.011 systems.
The evaluation of enterprise software and business systems
requires models and approaches that consider intelligence
criteria, as well as the enterprise traditional functional and non-
functional requirements and criteria. There have been some
limited efforts to evaluate BI, but they have always considered
1580 M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590

BI a system that is isolated from other enterprise systems. production reporting, end-user query and reporting, OLAP,
Taking a global view, Lnnqvist and Pirttimki [5] designed BI dashboard/screen tools, data mining tools, and planning and
performance measures, but before their effort, measurement modelling tools.
and evaluation in the BI field were restricted to proving the BI includes a set of concepts, methods and processes to
worth and value of BI investment. Elbashir et al. [10] discussed improve business decisions, using information from multiple
measuring the effects of BI systems on the business process, sources and applying past experience to develop an exact
and presented effective methods of measurement. Lin et al. [11] understanding of business dynamics [16]. It integrates the
have also developed a performance evaluation model for BI analysis of data with decision-analysis tools to provide the right
systems using ANP, but they have also treated BI as a separate information to the right persons throughout the organization,
system. with the purpose of improving strategic and tactical decisions.
A recent research review [6], which reports a systematic A BI system is a data-driven DSS that primarily supports the
review of published papers about evaluating and selecting querying of a historical database and the production of periodic
software packages and enterprise systems, concludes that there summary reports [2].
is no comprehensive list of criteria for this evaluation. Past Lnnqvist and Pirttimki [5] stated that the term, BI, can be
research has paid little attention to intelligence criteria and used when referring to the following concepts:
has not created models to evaluate these criteria. Our current
1. Related information and knowledge of an organization,
research addresses these needs in the field of evaluation of the
which describe the business environment, the organization
intelligence of enterprise software and systems.
itself, the conditions of the market, customers and competi-
Organizations usually assess their functional and non-
tors and economic issues;
functional requirements in order to evaluate and select enter-
2. Systemic and systematic processes by which organizations
prise systems, so consideration of their decision-support needs
obtain, analyse and distribute the information for making
as a non-functional requirement raises the following questions:
decisions about business operations.
RQ1: What are the evaluation criteria for the BI competency of
A literature review around the theme of BI shows division
enterprise systems and software?
between technical and managerial viewpoints, tracing two
RQ2: What is the fundamental structure of these criteria?
broad patterns. The managerial approach sees BI as a process
RQ3: How can organizations evaluate and select their en-
in which data gathered from inside and outside the enterprise,
terprise systems and software according to intelligence
are integrated in order to generate information relevant
criteria?
to the decision-making process. Here, the role of BI is to
This research was carried out to find answers to the above create an informational environment in which operational data
questions and to provide an approach and a tool for efficient gathered from Transactional Processing Systems (TPS) and
decision support by evaluating the intelligence of business external sources can be analysed in order to extract strategic
systems. The rest of this paper is organized as follows: Section 2 business knowledge to support the unstructured decisions of
consists of a literature review of BI definitions and evaluations management.
from managerial and technical approaches, and as an enabler The technical approach considers BI as a set of tools that
of enterprise systems. A wide-ranging literature review about supports the process described above. The focus is not on the
BI and decision-support criteria to evaluate enterprise systems process itself, but on the technologies, algorithms and tools that
is also summarized in Section 2. Section 3 discusses the research enable the saving, recovery, manipulation and analysis of data
objectives and methodology. Section 4 describes the empirical and information [17].
results and an analysis including hypothesis testing of the main However, in the overall view, there are two important issues.
research question, of factor extraction and labelling. A practical First, the core of BI is the gathering, analysis and distribution
BI Evaluation Tool was developed to evaluate the intelligence of information. Second, the objective of BI is to support the
level of enterprise systems, based on the six corresponding strategic decision-making process.
factors, and this tool is demonstrated in Section 5. Finally, By strategic decisions, we mean decisions related to im-
Section 6 concludes the research work and its main results and plementation and evaluation of organizational vision, mission,
limitations, and proposes directions for future research. goals and objectives with medium to long-term impact on the
organization, as opposed to operational decisions, which are
2. Literature review day-to-day in nature and more related to execution [17].
Bose [18] also describes the managerial view of BI as a
Business Intelligence or BI is a grand, umbrella term, process to get the right information to the right people at the
introduced by Howard Dresner of the Gartner Group, in 1989, right time, so they can make decisions that ultimately improve
to describe a set of concepts and methods to improve business the performance of the enterprise.
decision making by using fact-based, computerized support The technical view of BI usually centres on the processes
systems [12]. The first scientific definition by Ghoshal and or applications and technologies for gathering, storing and
Kim [13] referred to BI as a management philosophy and analysing data, and for providing access to data to help manage-
tool that helps organizations to manage and refine business ment make better business decisions. Another important ob-
information for the purpose of making effective decisions. servation in BI evolution is that industry leaders are currently
BI was considered to be an instrument of analysis, providing transitioning from operational BI of the past to analytical BI of
automated decision making about business conditions, sales, the future, which focuses on customers, resources and capa-
customer demand, product preference and so on. It uses bilities, to influence new decisions on an everyday basis. They
huge-database (data-warehouse) analysis, and mathematical, have implemented one or more forms of advanced analytics
statistical and artificial intelligence, as well as data mining for meeting these business needs. Ranjan [19] considers BI as
and On-Line Analysis Processing (OLAP) [14]. Eckerson [15] the conscious methodical transformation of data from any and
understood that BI must be able to provide the following tools: all data sources into new forms to provide information that is
M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 1581

Table 1: BI definitions.

BI definition Managerial approach Technical approach System-enabler approach

Focus Excellence of management Tools that support the process of BI Value-added features on
decision-making process managerial Approach supporting information
References [13,2,1618,3] [14,17,20,21] [15,5,19,10]

business-driven and results-oriented. It often encompasses a performance, and they concluded that BI tools and capabilities
mixture of tools, databases and vendors, in order to deliver an are necessary in enterprise systems. Their key message to
infrastructure that not only delivers the initial solution, but also executives was: We cannot manage what we do not measure!
incorporates the capability of change with business and the cur- Lin et al. [11] designed a performance assessment model,
rent marketplace. and concluded that the accuracy of the output, its conformity
Wu et al. [20] defined BI as a business management to requirements and its support of organizational efficiency are
term used to describe applications and technologies that the most critical factors in gauging the effectiveness of a BI
are used to gather, provide access to, and analyse data and system. They set forth the necessity of measurement indicators
information about the organization to help management make to show the performance of a BI system, but did not provide the
better business decisions. In other words, the purpose of means to evaluate the intelligence of the system.
BI is to provide business systems with actionable, decision- Lnnqvist and Pirttimki [5] discussed BI as a set of support
support technologies, including traditional data warehousing processes and stated that most literature focuses on justifying
technologies, reporting, ad hoc querying and OLAP. the value of BI. This is an important issue when the usefulness
Elbashir et al. [10] refer to BI systems as an important group of BI is under initial consideration, and also later when there is
of systems for data analysis and reporting, which supports man- a need to determine if BI continues to provide valuable results.
agers at different levels of the organization with timely, rele- They encouraged practitioners and researchers to start applying
vant and trouble-free ways to use information, enabling them the measurement of BI to their work.
to make better decisions. They explain that BI systems are often Elbashir et al. [10] developed a new concept, based on an
implemented as enhancements to widely adopted enterprise understanding of the characteristics of BI systems in a process-
systems, such as ERP systems. The scale of investment in BI sys- oriented framework. They examined the relationship between
tems reflects its growing strategic importance, highlighting the the performance of business process and organizational perfor-
need for more attention in research studies [10]. mance, finding significant differences in the strength of their
In some research, BI is concerned with the integration and relationship in different industrial sectors. They concluded by
consolidation of raw data into key performance indicators stressing the need for a better understanding of BI systems
(KPIs). KPIs represent an essential basis for business decisions through evaluation.
in the context of process execution. Therefore, operational Kahraman et al. [9] discussed the roles of intelligence
processes provide the context for data analysis, information techniques in enterprise information systems, to obtain a suc-
interpretation, and the appropriate action to be taken [21]. cessful business strategy. Intelligence techniques are rapidly
Recently, Jalonen and Lonnqvist [3] wrote that BI generates emerging as new tools in information management systems.
analyses and reports on trends in the business environment They stressed that intelligence techniques can be used in the
and on internal organizational matters. They explained that decision process of enterprise information systems. They con-
analyses may be produced systematically and regularly, or they cluded that hybrid systems that contain two or more intel-
may be ad-hoc, related to a specific decision-making context. ligence techniques would be used more in future; therefore,
Decision makers at different organizational levels employ this organizations need to take a sophisticated approach to the eval-
knowledge. The process results in the generation of both uation of the intelligence of their information systems.
numerical and textual information. Considering recent literature and related work described
Two important propositions arise from these definitions above, organizations need models and approaches to evalu-
of BI. ate and assess the BI capabilities and competencies of their
work systems, in order to achieve competitive advantage
1. Often approaches to BI are limited by supported functions,
by making the right decisions at the right time. In this re-
systems or system types.
search, we have identified the relevant evaluation criteria
2. BI is aimed primarily at providing decision-relevant analytic
and have created an approach to evaluate the intelligence
information to the management of an organization in
of enterprise systems. To identify these criteria, in current
support of their management activities.
research a comprehensive review of relevant literature was
In Table 1, BI definitions are sorted based on three conducted in 2010 and 2011 by authors. Articles from jour-
approaches: a managerial approach a technical approach, and nals, conference proceedings, doctoral dissertations and text-
an approach to BI as an enabler of enterprise systems. books were identified, analysed, and classified. It was also
In this study, we follow the system-enabler approach to de- necessary to search through a wide range of studies from dif-
fine BI. Actually, organizations would have a better decision- ferent disciplines, since numerous criteria are related to the in-
support environment if they were to enhance their enterprise telligence of a system and to decision support. Therefore, the
systems with value-added features and functionalities. Follow- scope of the search was not limited to specific journals, confer-
ing is a review of limited efforts in the past to study the evalu- ence proceedings, doctoral dissertations and textbooks. Man-
ation of BI in enterprise systems. agement, IT, computing and IS are some common academic
Sharma and Djiaw [4], in their managerial study, stated the disciplines in BI research. Consequently, the following online
effectiveness of Business Intelligence (BI) tools as enablers of journals, conference databases dissertation databases and text-
knowledge sharing between employees in the organization. books were searched to provide a comprehensive bibliogra-
They expressed that BI does not stand in isolation from phy of the target literature: ABI/INFORM database, ACM Digital
other initiatives for exploiting knowledge in order to drive Library, Emerald Fulltext, J Stor, IEEE Xplore, ProQuest Digital
1582 M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590

Table 2: BI evaluation criteria.

Criteria ID Criteria name Related studies

C1 Group sorting tools and methodology (Groupware) [2225]


C2 Group decision making [2628]
C3 Flexible models [23,29,11]
C4 Problem clustering [23,30,31]
C5 Optimization technique [3236]
C6 Learning technique [37,19,38,39]
C7 Import data from other systems [40,1,34,41]
C8 Export reports to other systems [40,42,34]
C9 Simulation models [37,34,41,39]
C10 Risk simulation [27,43]
C11 Financial analyses tools [4446]
C12 Visual graphs [47,48,37,49,35]
C13 Summarization [50,51,37,2]
C14 Evolutionary prototyping model [52,50,46,53]
C15 Dynamic model prototyping [54,50,5557]
C16 Backward and forward reasoning [58,27,53]
C17 Knowledge reasoning [40,59,27]
C18 Alarms and warnings [2,60,53]
C19 Dashboard/recommender [61,62,18]
C20 Combination of experiments [63,61,58,64,60,65]
C21 Situation awareness modelling [45,59,66]
C22 Environmental awareness [6769]
C23 Fuzzy decision-making [70,29,71,72,28]
C24 OLAP [7375,42,76,77]
C25 Data mining techniques [50,42,76,78]
C26 Data warehouses [73,7981]
C27 Web channel [73,82,83,2]
C28 Mobile channel [2,84,78]
C29 E-mail channel [85,86,84]
C30 Intelligent agent [46,77,28]
C31 Multi agent [87,88,85]
C32 MCDM tools [89,90,25,91]
C33 Stakeholders satisfaction [92,5,27,56]
C34 Reliability and accuracy of analysis [93,5,94,29,56,2]

Dissertations, Sage, Science Direct, and Web of Science. The lit- In the third stage, the survey data from the interviewees
erature search was based on the descriptors, BI capabilities, were collected; to test hypothesis, it was necessary to
decision support, decision-support criteria, BI evaluation cri- determine the statistical distribution of the collected data from
teria, BI assessment criteria, BI requirements and intelligent the second part of the questionnaire. Subsequently, based on
tools capabilities. The criteria identified are listed in Table 2 as the distribution of data, either a parametric or non-parametric
BI evaluation criteria. test was performed to prove the hypothesis. The main purpose
of the fifth stage was to confirm the hypothesis from stage
3. Research objectives and methodology two.
The sixth and seventh stages of the research framework are
To answer the research questions posed in Section 1, several based on factor analysis, and concentrate on the extraction
research objectives were determined. The main objective was and identification of the BI evaluation criteria affecting the
to study the effect of BI evaluation of enterprise systems on the intelligence of enterprise systems. Factor analysis is also a
decision-support environments of organizations. Subordinate generic name given to a class of multivariate statistical methods
research objectives were to determine the main factors in the whose primary purpose is to define the underlying structure
evaluation of BI competencies and their relative importance. in a data matrix. Using factor analysis, we first identified the
Based on a literature review and similar research [95,96], as separate factors of the structure and then determined the extent
well as recent research on BI by the authors, statistical methods to which each variable was explained by each factor. Once these
were applied and the research structure was developed based factors and the explanation of each variable were determined,
on the ten stages shown in Figure 1. summarization and reduction of the data were carried out. By
The first stage was the literature review of business summarizing the data, the factor analysis derived underlying
intelligence specifications and capabilities, i.e. the criteria of a factors that when interpreted and understood, described the
system that defines its BI, as listed in Table 2. data in a much smaller number of concepts than the original
In the second stage, a questionnaire was designed with three individual variables [97]. Evaluating the suitability of collected
main parts. The first section of the questionnaire consisted of data, performing factor analysis, and naming the extracted
questions about the characteristics of the interviewees. The factors were individual steps.
content of the second section was based on questions about BI Finally, the most important factors and their effect were
competency, which were asked to determine the importance made clear through labelling. An expert tool was then designed
of the evaluation criteria, and finally, the third section of the based on the extracted knowledge of the relationships between
questionnaire included questions to learn about the effect of BI competencies and the main factors of intelligence levels in
BI evaluation on the decision-support environments of the enterprise systems. This new tool can help an organization to
organizations. study and diagnose the intelligence of its business systems.
M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 1583

Figure 1: Research structure and stages.

Table 3: Demographic profiles of interviewees.

Description Number of Percent Cumulative


interviewees (percentage)

Male 154 87.5 87.5


Gender Female 22 12.5 100
Sum 176 100
Governmental 102 58 58
Organization type Private 74 42 100
Sum 176 100
Under BS 20 11.4 11.4
BS 83 47.2 58.5
Educational degree
MS or higher education 73 41.5 100
Sum 176 100
Structured 14 8 8
Semi structured 55 31.2 39.2
Decision-type
Unstructured 107 60.8 100
Sum 176 100
Less than 5 years 7 4 4
5 to less than 10 years 69 39.2 43.2
10 to less than 15 years 64 36.4 79.6
Seniority
15 to less than 20 years 25 14.2 93.8
20 years and above 11 6.2 100
Sum 176 100

3.1. Design of the questionnaire in decision making and were familiar with BI and IT tools.
Therefore, the main targets of the sampling were CIOs (Chief
A questionnaire was designed and structured in three Information Officers), IT Managers, and IT Project Managers,
sections (Appendix). Information related to the basic profile who are involved in IT efforts and decision making. Based
of the interviewees was requested at the beginning of the on [99,96], the data-collection method was based on a simple
questionnaire. In the second part, 34 questions were asked to random selection of targets in the list of Fortune 500 companies.
measure their attitudes, based on the importance of the BI
evaluation criteria listed in Table 2. The selected responses were 4. Empirical results and analysis
evaluated on a Likert Scale [98] and the responses could be:
very strongly disagree, strongly disagree, disagree, no opinion, 4.1. Data collection
agree, strongly agree, or very strongly agree. In other words, the
second part of the questionnaire measures their opinions about
The research targets were CIOs (Chief Information Officers),
the importance of each BI competency of the enterprise system.
IT Managers and IT Project Managers. The number of question-
Following these 34 questions, one question (Y ) in the third naires sent out was 420 and the number returned was 185,
part of the questionnaire was designed to measure the effect which showed a return rate of 44.04%. Of the returned question-
of BI evaluation on the decision-support environments of their naires, twenty-six were incomplete and thus discarded, making
organizations: the number of valid questionnaires 176, or 41.90% of the total
Y . Is the evaluation of BI for enterprise systems important to the number sent out.
decision-support environment in the organization?
4.2. Demographic profiles of interviewees
3.2. Methodology of the data collection
The demographic profiles of the interviewees who partici-
Following the research objectives, the main targets of the pated in the survey have been summarized in Table 3. The re-
study were stakeholders in organizations, who were involved sults show that most participants (87.5%) are male and are from
1584 M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590

Table 4: Wald-Wolfowitz test results (H1 prove test).

Question Cluster N Number Z Asymp. Sig.


of runs (1-tailed)

1 15
Y 2 12.985 0.000
2 161
Note: cluster 1 includes very strongly disagree, strongly disagree, disagree
and cluster 2 includes agree, strongly agree or very strongly agree.

both governmental and private organizations. Most of the in-


terviewees (88.7%) have a Bachelor of Science (BS) or a higher
degree, as shown in Table 3. On the subject of decision-type, the
majority of interviewees make semi-structured and unstruc-
tured decisions in their work. Table 3 also shows the seniority
of the participants. As can be seen, 20.4% have over fifteen years
of seniority, 36.4% have ten to fifteen years, and 43.2% have less
than ten years seniority.

4.3. Hypothesis test


Figure 2: Factors of the evaluation model and their loading.
In order to accomplish the main objective of the research, the
results should prove the hypothesis. As previously mentioned, Table 5: Results of the rotated factor analysis.
one question was posed at the end of the survey that presented
Factor Initial eigen Rotation sums of squared loadings
the hypothesis:
values
H1. Evaluation of the BI of enterprise systems is vital to the creation
Total Percentage of Cumulative
of a decision-support environment in an organization. variance percentage
One of the most popular ways to identify the distribution of
1 16.114 7.264 21.366 21.366
the data, statistically, is the one-sample KolmogorovSmirnov
2 3.173 6.244 18.366 39.732
test. The KolmogorovSmirnov test compares the observed 3 1.850 5.044 14.836 54.568
cumulative distribution function for a variable with a spec- 4 1.457 2.977 8.755 63.324
ified theoretical distribution, which may be normal, uni- 5 1.348 2.048 6.025 69.349
form, Poisson or exponential. Many statistical parametric tests 6 1.188 1.553 4.568 73.917
require normally distributed variables. The one-sample Kol-
mogorovSmirnov test can be used to test whether or not a vari-
able is normally distributed [100]. According to our test results, be utilized to examine the underlying patterns or relationships
the p-value of all questions was less than 0.05, which shows that for a large number of variables, and determine whether the
their distribution was abnormal. As the statistical distribution information can be condensed or summarized into a smaller set
of variables of Y was also abnormal, a statistical non-parametric of factors or components [97]. An important tool in interpreting
test must be used to prove H1. For this, a Wald-Wolfowitz factors is factor rotation. The term rotation means exactly what
test was used to determine the difference between the agree it implies. Specifically, the reference axes of the factors are
and disagree results. Wald-Wolfowitz is a test that examines turned about the origin until some other position has been
whether two independent samples (clusters) come from the reached. The un-rotated factor solutions extract factors in the
same population or not. The Wald-Wolfowitz test combines and order of their importance. The first factor tends to be a general
ranks the observations from both groups. If the selected groups factor, with almost every variable loading significantly, and it
are from the same population, they should be randomly scat- accounts for the largest amount of variance. The second and
tered throughout the ranking and result in many runs. A signif- subsequent factors are then based on the residual amounts of
icance level below 0.05 indicates that the two groups differ, as variance. The ultimate effect of rotating the factor matrix is to
also shown in Table 4. redistribute the variance from earlier factors to later ones to
With reference to a significance-level of less than 0.05 in the achieve a simpler, theoretically more meaningful factor pattern.
Wald-Wolfowitz test results, and reaching a consensus for the The simplest case of rotation is an orthogonal rotation in which
main question (Y ), evaluation of the BI of enterprise systems the axes are maintained at 90 [97].
is vital to the creation of a decision-support environment in In order to determine whether the partial correlation of
an organization. In this way, we can say that an organization the variables is small, the KaiserMeyerOlkin (KMO) test to
needs to evaluate the BI specifications of its systems and this measure sampling adequacy [101] and the Bartletts 2 test of
evaluation can improve their decision-support environment. sphericity [102] were used before starting the factor analysis.
Therefore, from the result of this test of the hypothesis, it can The result was a KMO of 0.925 and the Bartlett test p-value
be concluded that organizations should evaluate their systems less than 0.05, which showed good correlation. The factor
with BI criteria. analysis method is the principle component analysis in this
research, which was developed by Hotteling [99]. The condition
4.4. Extraction of factors for selecting factors was based on the principle proposed by
Kaiser [101]: An Eigen value larger than one, and an absolute
Factor analysis is a technique that is mainly suitable value of factor loading greater than 0.5. The 34 variables
for exploring the patterns of complex, multidimensional were grouped into six factors and the results can be seen in
relationships encountered by researchers. Factor analysis can Table 5. Six factors had an Eigen value greater than one, and the
M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 1585

Figure 3: Functionalities and the first page of the designed tool.

Figure 4: A sample of a questioning step for the diagnosis.

interpretation variable was 73.917%. The factors were rotated Satisfaction. Extracted factors and their loading on the main
according to the Varimax rotation method. concept or BI evaluation are shown in Figure 2. According to
the expectations of the research [5,11,9,4], the decision-support
4.5. Naming the factors capabilities and BI competencies of enterprise and work sys-
tems can be measured and evaluated for each factor. Therefore,
The factors were given short labels indicating their content. there is good conformity between the research objectives and
Based on the meaning and functionalities of the criteria that are the results obtained.
related to each factor, a conceptual label was assigned to them.
The names and content of the six factors are shown in Table 6. 5. Designing the BI evaluation tool
The names that have been assigned to the extracted factors are
Analytical and Intelligent Decision-support, Providing Re- The results of the factor analysis indicate that the intelli-
lated Experiment and Integration with Environmental Informa- gence of enterprise systems can be evaluated based on six main
tion, Optimization and Recommended Model, Reasoning, factors. To measure the intelligence of these factors, the sys-
Enhanced Decision-making Tools, and finally Stakeholders tem should be evaluated by 34 criteria through questions about
1586 M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590

Figure 5: Intelligence dashboards and comparison charts of the designed tool.

BI competencies. Using the extracted loads of each criterion very high. A sample page is shown in Figure 4. Computations are
within its factor, the intelligence of the system can be mea- done based on the factors and their loading, on the 34 criteria
sured and depicted on six dashboards (for the six factors). Fi- that were discussed in Section 4. Reports which include the
nally, the most important factors and their effect become clear overall level of BI and its intelligence level in the six areas are
through labelling. The authors have implemented the expert depicted on the dashboards. A comparison of the factors that
evaluation tool in a VB.NET environment. This tool has three share in the intelligence of enterprise systems are also shown
functionalities: to evaluate a new system, to edit/view an eval- in charts. A sample of the intelligence-level of a sample system
uated system and to compare evaluated systems. The first page and its comparison charts are illustrated in Figure 5.
of this expert evaluating tool is shown in Figure 3. The tool re-
quests the systems-type of the enterprise system (ERP, SCM, 6. Conclusion
CRM, Office Automation, etc.) and the organization-type (pri-
vate, government or public). It also asks about overall specifi- This research confirmed the necessity to evaluate BI com-
cations of the enterprise system, such as its functions and the petencies and the specifications of enterprise systems, and
number of users. It also requests specifications of the organiza- demonstrated that this evaluation can advance decision-
tion, such as decision-types. support environments. To accomplish this, a survey was carried
This tool utilizes the 34 BI criteria as questions for diagnosis, out and the responses of the interviewees were grouped into
and receives answers in a Likert Scale format; very low to categories of agree (agree, strongly agree, very strongly agree)
M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 1587

Table 6: The names and related criteria of factors explored.

Factor Factor name ID. Criteria

C12 Visual graphs


C18 Alarms and warnings
C24 OLAP
C25 Data mining techniques
C26 Data warehouses
F1 Analytical and Intelligent Decision-support C27 Web channel
C28 Mobile channel
C30 Intelligent agent
C31 Multi agent
C13 Summarization
C29 E-mail channel
C1 Group sorting tools and methodology (Groupware)
C3 Flexible models
C4 Problem clustering
C7 Import data from other systems
F2 Providing related experiment and integration with environmental information C8 Export reports to other systems
C20 Combination of experiments
C21 Situation awareness modelling
C2 Group decision-making
C22 Environment awareness
C5 Optimization technique
C6 Learning technique
C9 Simulation models
F3 Optimization and recommended model C10 Risk simulation
C14 Evolutionary prototyping model
C15 Dynamic model prototyping
C19 Dashboard/recommender
C11 Financial analyses tools
F4 Reasoning C16 Backward and forward reasoning
C17 Knowledge reasoning
C23 Fuzzy decision-making
F5 Enhanced Decision-making Tools
C32 MCDM tools
C33 Stakeholders satisfaction
F6 Stakeholders satisfaction
C34 Reliability and accuracy of analysis

and disagree (no opinion, disagree, strongly disagree and very within its factor, the intelligence of the system is measurable
strongly disagree). The Wald-Wolfowitz test was used to de- and is depicted on the six dashboards (for the six factors).
termine the significant differences between the two groups. An expert tool was designed, which utilizes these criteria
The results show that the agrees were consistent for the final to formulate survey questions that reveal the intelligence of
question (Y ), meaning that organizations should evaluate the each area of an enterprise system. This new tool has the
BI competencies of systems, which can improve their decision- functionalities to evaluate a new system, as well as to compare
support environment. From a wide-ranging literature review, existing systems, and it produces intelligence-level dashboards
34 criteria for BI evaluation were gathered and embedded in the and comparison charts of the intelligence areas.
second part of the research. The interviewees determined the The authors believe that this research will enable organiza-
relative importance of the criteria from these 34 variables by as- tions to make better decisions for designing, selecting, evaluat-
signing ranks to them. The research then applied factor analysis
ing and buying enterprise systems, using criteria that help them
to extract the six main factors for evaluation. These factors
to create a better decision-support environment in their work
were Analytical and Intelligent Decision-support, Provision
systems. The main limitations of this research include the lo-
of Related Experimentation and Integration with Environmen-
calization of interviewees, differences between the functional-
tal Information, Optimization and Recommendation of a
ities of enterprise systems and the novelty of BI in business and
Model, Reasoning, Enhanced Decision-making Tools, and,
finally, Stakeholder Satisfaction. These are structural factors industry. Of course, further research is needed. One important
that show the scope of the intelligence of enterprise systems topic for the future is the design of expert systems (tools) to
and their relationship with BI competence. The identification compare vendor products. Another is application of the crite-
of these criteria represents an important contribution of this ria and factors that we have identified and defined in an MCDM
research. Utilizing these criteria, evaluating them in work sys- framework, in order to select and rank enterprise systems based
tems and consequently determining the intelligence of sys- on BI specifications. The complex relationship between these
tems can help organizations to improve decision support for factors and the satisfaction of managers with the decision-
decision makers and enable companies to achieve competitive making process should also be addressed in future research.
advantage.
Using the results of the factor analysis, the intelligence of
Appendix. The survey instrument
enterprise systems can be evaluated according to six main
factors. To measure the intelligence of these factors, the
system is evaluated by 34 criteria, using questions about As explained previously a questionnaire as follows has been
BI competencies. Using the extracted loads of each criterion designed and structured in Tables A.1A.3.
1588 M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590

Table A.1: Profile of the interviewees.

Gender Male  Female 


Organization type Governmental  Private 
Educational degree Under BS  BS  MS or higher education 
Decision-type Structured  Semi-structured  Unstructured 
Less than 5 years  5 to less than 10 years  10 to less than 15 years 
Seniority
15 to less than 20 years  20 years and above 

Table A.2: Criteria for evaluation of BI.

The following are your attitude about BI capabilities and competencies in enterprise systems
Very strongly Strongly Disagree No opinion Agree Strongly Very strongly
disagree disagree agree agree

Group sorting tools and 1 2 3 4 5 6 7


methodology (Groupware)
Group decision-making 1 2 3 4 5 6 7
Flexible models 1 2 3 4 5 6 7
Problem clustering 1 2 3 4 5 6 7
Optimization technique 1 2 3 4 5 6 7
Learning technique 1 2 3 4 5 6 7
Import data from other systems 1 2 3 4 5 6 7
Export reports to other systems 1 2 3 4 5 6 7
Simulation models 1 2 3 4 5 6 7
Risk simulation 1 2 3 4 5 6 7
Financial analyses tools 1 2 3 4 5 6 7
Visual graphs 1 2 3 4 5 6 7
Summarization 1 2 3 4 5 6 7
Evolutionary prototyping model 1 2 3 4 5 6 7
Dynamic model prototyping 1 2 3 4 5 6 7
Backward and forward reasoning 1 2 3 4 5 6 7
Knowledge reasoning 1 2 3 4 5 6 7
Alarms and warnings 1 2 3 4 5 6 7
Dashboard/Recommender 1 2 3 4 5 6 7
Combination of experiments 1 2 3 4 5 6 7
Situation awareness modelling 1 2 3 4 5 6 7
Environmental awareness 1 2 3 4 5 6 7
Fuzzy decision-making 1 2 3 4 5 6 7
OLAP 1 2 3 4 5 6 7
Data mining techniques 1 2 3 4 5 6 7
Data warehouses 1 2 3 4 5 6 7
Web channel 1 2 3 4 5 6 7
Mobile channel 1 2 3 4 5 6 7
E-mail channel 1 2 3 4 5 6 7
Intelligent agent 1 2 3 4 5 6 7
Multi agent 1 2 3 4 5 6 7
MCDM tools 1 2 3 4 5 6 7
Stakeholders satisfaction 1 2 3 4 5 6 7
Reliability and accuracy of analysis 1 2 3 4 5 6 7

Table A.3: The necessity of BI evaluation.

Very strongly Strongly Disagree No opinion Agree Strongly Very strongly


disagree disagree agree agree

Y . Is the evaluation of BI, for 1 2 3 4 5 6 7


enterprise systems, important to the
promotion of decision-support in
your organization?

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towards an event-fed solution for slowly changing dimensions in data Department at Iran University of Science and Technology (IUST), Tehran, Iran,
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[84] Wen, W., Chen, Y.H. and Pao, H.H. A mobile knowledge management Tehran, Iran, and a MA degree in Information Technology Management, in
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