Assessment of Pre- and Post-adoption Factors of Business Intelligence and Analytics Systems in Saudi SMEs

Abstract

In Small and medium-sized enterprises (SMEs), the usage of data has been rapidly increasing. Thus, the need to implement and use Business Intelligence and Analytics (BI&A) systems is crucial in order to enhance organisational performance. BI&A has attracted the attention of decision-makers, as these systems significantly impact forecasts of current and prospective views of the decision process in business operations. This impact will be realised only when BI&A is widely used. The literature suggests that more than 87% of BI&A projects in organisations fail to achieve their expected returns and benefits. However, literature reviews show that there is a need for more studies on BI&A systems adoption and use both in general and in SMEs in particular. Also, there is a dearth of studies relating to developing nations. Furthermore, little is known about how well the factors that influence the intention to adopt (pre-adoption) also predict extensive use (post-adoption) of the same technology.

There have been huge changes in Saudi Arabia’s (SA’s) economic perspective in recent years. Instead of relying on oil alone as a source of income, there is now more than ever a growing need for SA to diversify into other economic sectors. SMEs have received special attention from the Saudi government, as this sector makes a great contribution to the gross domestic product (GDP). Therefore, much of the government funding and support is directed to tech-related sectors to enhance technology usage at Saudi SMEs.

This study aims to examine the pre- and post-adoption factors that influence owners’/managers’ decisions to adopt and use BI&A systems in SMEs in SA and compare these factors' effects on both sides. To achieve this, an integrated model is proposed and empirically tested. This model integrates established theories, including the TOE framework, IS adoption for small businesses, and DOI theory. Ten factors are proposed under these theories, which are relative advantage, complexity, compatibility, observability, owners’/managers’ IT knowledge, owners’/managers’ innovation, organisational resource availability, enterprise size, competitive pressure, and external support.

Using an explanatory sequential mixed method approach, data have been collected, starting with a survey and followed by an interview with the owners/managers of SMEs located in SA. The results showed that Saudi SMEs are still in the initial stage of adopting and using BI&A systems. Relative advantage, complexity, observability, enterprise size, resource availability, external support, IT knowledge, and innovativeness are proven to be significant factors in the pre-adoption stage. while compatibility and competitive pressure are not significant in the survey results, yet inconclusive results for these two factors appear in the interviews. In the post-adoption stage, our results show that observability, resource availability, competitive pressure, external support, and innovativeness are significant factors, while a relative advantage, complexity, enterprise size, and IT knowledge are not. Also, compatibility in the post-adoption stage appears insignificant in our survey results, but inconclusive interview results appear for these factors.

The present study’s unique contribution can be found in its context. SMEs play a major role in economic progress. However, it is widely acknowledged that the use of advanced technology in SMEs, such as BI&A systems, is rare and has received limited attention in the literature. Moreover, this study investigates pre- and post-adoption for BI&A systems in SMEs, matters which are rarely discussed in the same context. In addition, this study provides support regarding the pertinence and usability of the TOE framework and DOI theory in predicting and explaining owners’/managers' adoption and use of BI&A systems in Saudi SMEs. The findings of this study can be used to help introduce BI&A systems adoption strategies with the goal of achieving a more extensive use of BI&A systems, which will result in a higher return on SME investment in SA and other developing countries. It creates a reliable and valid BI&A systems adoption model that can be used by IT vendors, governments, and SME owners to increase BI&A systems adoption and usage in their businesses.