Using the balanced scorecard in assessing the impact of BI system usage on organizational performance

Abstract

There is currently a trend towards the integration of business intelligence (BI) systems with existing information systems in order to improve decision-making capabilities in organizations. Even though much attention has been paid to the factors influencing the adoption of BI systems, in practice there is still limited research investigating the business value of BI systems in a post-adoption environment. The motivation for this study is to examine the impact of BI system usage on organizational performance. This study develops a multidimensional measurement for assessing organizational performance, based on the balanced scorecard (BSC) approach developed by Kaplan and Norton. Data for the study were collected from 139 companies in the semiconductor industry in Taiwan and the relationships proposed in the framework were tested using Partial Least Squares method. The results indicate that higher levels of BI system usage will lead to improved financial performance indirectly through enhanced internal process, learning and growth and customer performance (non-financial performance). Moreover, higher levels of BI system usage can also lead to improved internal process, customer, and learning and growth performance in organizations. The results also show that internal process and customer performance have positive significant impact on financial performance. While learning and growth does not directly lead to the improvement of financial performance, it indirectly influences financial performance through the mediating effect of internal process performance. The findings of this study provide initial evidence that the adoption of BI systems leads to increased financial performance. The results indicate that these four BSC performance measures for BI system usage are interrelated, supporting the core premise of the BSC.