Leveraging business intelligence systems to enhance management control and business process performance in the public sector

Abstract

Purpose Recent research and policy reports indicate public sector organizations struggle to leverage information technology-based performance measurement systems and fail to effectively evaluate performance beyond financial metrics. This study aims to focus on organizational factors that influence the assimilation of business intelligence (BI) systems into integrated management control systems and the corollary impact on improving business process performance within public sector organizations. Design/methodology/approach The complete Australian client list was acquired from a leading BI vendor; and the authors surveyed all public sector organizations, receiving 226 individual responses representing 160 public sector organizations in Australia. Using latent construct measurement, structural equation modeling (SEM)-partial least squares is used to test the theoretical model. Findings When top management promotes knowledge creation among the organization’s operational level employees and support their activities with strong BI infrastructure, the same knowledge and infrastructure capabilities that are critical to assimilation in private sector hold in the public sector. However, public sector organizations generally have difficulty retaining staff with expertise in new technologies and attracting new innovative staff that can leverage smart systems to effect major change in performance measurement. When top management effectively manages knowledge importation from external entities to counteract deficiencies, public sector organizations effectively assimilate BI knowledge into performance measurement yielding strong process performance. Research limitations/implications When top management promotes knowledge creation among the organization’s operational level employees and support their activities with strong BI infrastructure, the same knowledge and infrastructure capabilities critical to assimilation in the private sector hold in the public sector. However, public sector organizations generally have difficulty retaining staff with expertise in new technologies and attracting new innovative staff that can leverage smart systems to effect major change in performance measurement. The research extends the theory behind organizational absorptive capacity by highlighting how knowledge importation can be used as an external source facilitating internal knowledge creation. This collaborative knowledge creation leads to affective assimilation of BI technologies and associated performance gains. Practical implications The results provide guidance to public sector organizations that struggle to measure and validate service outcomes under New Public Management regulations and mandates. Originality/value The results reveal that consistent with the philosophies behind New Public Management strategies, private sector measures for increasing organizational absorptive capacity can be applied in the public sector. However, knowledge importation appears to be a major catalyst in the public sector where the resources to retain skilled professionals with an ability to leverage contemporary technologies into service performance are often very limited. Top management team knowledge and skills are critical to effectively leveraging these internal and external knowledge creation mechanisms.

A Study on BI System: A Moderating Role of Organizational Learning

“…All of the examined measures of the acquisition dimensions offer a plausible potential benefit for enhancing data acquisition within businesses (Knoppen, Saris, & Moncagatta, 2022). Elbashir et al (2022) assert acquisition of knowledge generates positive knowledge-sharing interaction that positively affects the BI system.…”

“…The acquisition dimension of ACAP allows organizations to recognize and acquire external knowledge for growth and sustainability (Elbashir et al, 2022). Extant literature suggests that firms must invest in R & D to acquire knowledge and make business intelligence systems effective (Chatterjee, Chaudhuri, & Vrontis, 2022).…”

Økonomistyring og digitale verktøy

“…En deskriptiv analyse av balansert målstyring og business intelligence blant norske virksomheter MAGMA 01/2023 FORSKNING OG VITEN F siden det kan gi et viktig bidrag til den voksende litteraturen om interaksjonen mellom digitale verktøy og praksis innenfor økonomistyring (f.eks. Andreassen, 2020;Andreassen & Berg, 2020;Appelbaum et al, 2017;Elbashir et al, 2021;Knudsen, 2020;Rom & Rohde, 2007).…”

“…Samtidig er BI-funksjonen avhengig av at enheter i virksomhetene etterspør og bruker den informasjonen som produseres. Det vil føre til det som i litteraturen omtales som «integrerte informasjonssystemer» (IIS) (Elbashir et al, 2021). Denne typen systemer stiller imidlertid krav til organisatoriske mekanismer for integrering og koordinering av begge funksjonene.…”