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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 Business intelligence; Decision support; Enterprise systems; Evaluation tool.

Abstract Most organizations still experience a lack of Business Intelligence (BI) in their decisionmaking processes when implementing enterprise systems, such as Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM). Consequently, a model and techniques to evaluate and assess the intelligence-level of enterprise systems can improve 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. All rights reserved.

1. Introduction Nowadays, information and knowledge represent the fundamental wealth of an organization. Enterprises try to utilize this wealth to gain competitive advantage when making important decisions. Enterprise software and systems include Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM) systems. These systems convert and store the data in their databases; therefore, they can be used as a pool of data to support decisions and explore applicable knowledge [1,2]. With the potential to gain

Correspondence to: Department of Industrial Engineering, Iran University of Science and Technology, No. 43, Reyhani Pamchi Allay, Allameh Amini St, West Mobarez St, Abouzar Blv 17789-14361, Pirouzi Ave, Tehran, Iran. Tel.: +98 9122034980; fax: +98 2177959502. E-mail address: SRouhani@iust.ac.ir (S. Rouhani).
1026-3098 2012 Sharif University of Technology. Production and hosting by Elsevier B.V. All rights reserved. Peer review under responsibility of Sharif University of Technology. doi:10.1016/j.scient.2011.11.011

competitive advantage when making important decisions, it is vital to integrate decision support into the environment of their enterprise and work systems. Business Intelligence (BI) can be embedded in these enterprise systems to obtain this competitive advantage [3,4]. In the past, Decision-Support Systems (DSS) were independent systems within an organization and had a weak relationship with other systems (island systems). Now, enterprise systems are the foundation of an organization, and practitioners design and may implement BI as an umbrella concept to create a comprehensive decision-support environment for management [1,5]. Based on the ideas of Alter [1], and the research carried out on the non-functional requirements of enterprise software and systems by Jadhav and Sonar [6,7] and also by Sen et al. [8], todays approach to decision support as a separate, individual system, such as DSS, has been replaced by a new approach. This new approach creates an integrated decisionsupport environment, and takes the intelligence requirements of enterprise systems into consideration. Kahraman et al. [9] have also discussed the roles of intelligence techniques to obtain a successful business strategy in enterprise information 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 nonfunctional requirements and criteria. There have been some limited efforts to evaluate BI, but they have always considered

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BI a system that is isolated from other enterprise systems. Taking a global view, Lnnqvist and Pirttimki [5] designed BI performance measures, but before their effort, measurement and evaluation in the BI field were restricted to proving the worth and value of BI investment. Elbashir et al. [10] discussed measuring the effects of BI systems on the business process, and presented effective methods of measurement. Lin et al. [11] have also developed a performance evaluation model for BI systems using ANP, but they have also treated BI as a separate system. A recent research review [6], which reports a systematic review of published papers about evaluating and selecting software packages and enterprise systems, concludes that there is no comprehensive list of criteria for this evaluation. Past research has paid little attention to intelligence criteria and has not created models to evaluate these criteria. Our current research addresses these needs in the field of evaluation of the intelligence of enterprise software and systems. Organizations usually assess their functional and nonfunctional requirements in order to evaluate and select enterprise systems, so consideration of their decision-support needs as a non-functional requirement raises the following questions: RQ1: What are the evaluation criteria for the BI competency of enterprise systems and software? RQ2: What is the fundamental structure of these criteria? RQ3: How can organizations evaluate and select their enterprise systems and software according to intelligence criteria? This research was carried out to find answers to the above questions and to provide an approach and a tool for efficient decision support by evaluating the intelligence of business systems. The rest of this paper is organized as follows: Section 2 consists of a literature review of BI definitions and evaluations from managerial and technical approaches, and as an enabler of enterprise systems. A wide-ranging literature review about BI and decision-support criteria to evaluate enterprise systems is also summarized in Section 2. Section 3 discusses the research objectives and methodology. Section 4 describes the empirical results and an analysis including hypothesis testing of the main research question, of factor extraction and labelling. A practical BI Evaluation Tool was developed to evaluate the intelligence level of enterprise systems, based on the six corresponding factors, and this tool is demonstrated in Section 5. Finally, Section 6 concludes the research work and its main results and limitations, and proposes directions for future research. 2. Literature review Business Intelligence or BI is a grand, umbrella term, introduced by Howard Dresner of the Gartner Group, in 1989, to describe a set of concepts and methods to improve business decision making by using fact-based, computerized support systems [12]. The first scientific definition by Ghoshal and Kim [13] referred to BI as a management philosophy and tool that helps organizations to manage and refine business information for the purpose of making effective decisions. BI was considered to be an instrument of analysis, providing automated decision making about business conditions, sales, customer demand, product preference and so on. It uses huge-database (data-warehouse) analysis, and mathematical, statistical and artificial intelligence, as well as data mining and On-Line Analysis Processing (OLAP) [14]. Eckerson [15] understood that BI must be able to provide the following tools:

production reporting, end-user query and reporting, OLAP, dashboard/screen tools, data mining tools, and planning and modelling tools. BI includes a set of concepts, methods and processes to improve business decisions, using information from multiple sources and applying past experience to develop an exact understanding of business dynamics [16]. It integrates the analysis of data with decision-analysis tools to provide the right information to the right persons throughout the organization, with the purpose of improving strategic and tactical decisions. A BI system is a data-driven DSS that primarily supports the querying of a historical database and the production of periodic summary reports [2]. Lnnqvist and Pirttimki [5] stated that the term, BI, can be used when referring to the following concepts: 1. Related information and knowledge of an organization, which describe the business environment, the organization itself, the conditions of the market, customers and competitors and economic issues; 2. Systemic and systematic processes by which organizations obtain, analyse and distribute the information for making decisions about business operations. A literature review around the theme of BI shows division between technical and managerial viewpoints, tracing two broad patterns. The managerial approach sees BI as a process in which data gathered from inside and outside the enterprise, are integrated in order to generate information relevant to the decision-making process. Here, the role of BI is to create an informational environment in which operational data gathered from Transactional Processing Systems (TPS) and external sources can be analysed in order to extract strategic business knowledge to support the unstructured decisions of management. The technical approach considers BI as a set of tools that supports the process described above. The focus is not on the process itself, but on the technologies, algorithms and tools that enable the saving, recovery, manipulation and analysis of data and information [17]. However, in the overall view, there are two important issues. First, the core of BI is the gathering, analysis and distribution of information. Second, the objective of BI is to support the strategic decision-making process. By strategic decisions, we mean decisions related to implementation and evaluation of organizational vision, mission, goals and objectives with medium to long-term impact on the organization, as opposed to operational decisions, which are day-to-day in nature and more related to execution [17]. Bose [18] also describes the managerial view of BI as a process to get the right information to the right people at the right time, so they can make decisions that ultimately improve the performance of the enterprise. The technical view of BI usually centres on the processes or applications and technologies for gathering, storing and analysing data, and for providing access to data to help management make better business decisions. Another important observation in BI evolution is that industry leaders are currently transitioning from operational BI of the past to analytical BI of the future, which focuses on customers, resources and capabilities, to influence new decisions on an everyday basis. They have implemented one or more forms of advanced analytics for meeting these business needs. Ranjan [19] considers BI as the conscious methodical transformation of data from any and all data sources into new forms to provide information that is

M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 Table 1: BI definitions. BI definition Focus References Managerial approach Excellence of management decision-making process [13,2,1618,3] Technical approach Tools that support the process of BI managerial Approach [14,17,20,21] System-enabler approach Value-added features on supporting information [15,5,19,10]

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business-driven and results-oriented. It often encompasses a mixture of tools, databases and vendors, in order to deliver an infrastructure that not only delivers the initial solution, but also incorporates the capability of change with business and the current marketplace. Wu et al. [20] defined BI as a business management term used to describe applications and technologies that are used to gather, provide access to, and analyse data and information about the organization to help management make better business decisions. In other words, the purpose of BI is to provide business systems with actionable, decisionsupport technologies, including traditional data warehousing technologies, reporting, ad hoc querying and OLAP. Elbashir et al. [10] refer to BI systems as an important group of systems for data analysis and reporting, which supports managers at different levels of the organization with timely, relevant and trouble-free ways to use information, enabling them to make better decisions. They explain that BI systems are often implemented as enhancements to widely adopted enterprise systems, such as ERP systems. The scale of investment in BI systems reflects its growing strategic importance, highlighting the need for more attention in research studies [10]. In some research, BI is concerned with the integration and consolidation of raw data into key performance indicators (KPIs). KPIs represent an essential basis for business decisions in the context of process execution. Therefore, operational processes provide the context for data analysis, information interpretation, and the appropriate action to be taken [21]. Recently, Jalonen and Lonnqvist [3] wrote that BI generates analyses and reports on trends in the business environment and on internal organizational matters. They explained that analyses may be produced systematically and regularly, or they may be ad-hoc, related to a specific decision-making context. Decision makers at different organizational levels employ this knowledge. The process results in the generation of both numerical and textual information. Two important propositions arise from these definitions of BI. 1. Often approaches to BI are limited by supported functions, systems or system types. 2. BI is aimed primarily at providing decision-relevant analytic information to the management of an organization in support of their management activities. In Table 1, BI definitions are sorted based on three approaches: a managerial approach a technical approach, and an approach to BI as an enabler of enterprise systems. In this study, we follow the system-enabler approach to define BI. Actually, organizations would have a better decisionsupport environment if they were to enhance their enterprise systems with value-added features and functionalities. Following is a review of limited efforts in the past to study the evaluation of BI in enterprise systems. Sharma and Djiaw [4], in their managerial study, stated the effectiveness of Business Intelligence (BI) tools as enablers of knowledge sharing between employees in the organization. They expressed that BI does not stand in isolation from other initiatives for exploiting knowledge in order to drive

performance, and they concluded that BI tools and capabilities are necessary in enterprise systems. Their key message to executives was: We cannot manage what we do not measure! Lin et al. [11] designed a performance assessment model, and concluded that the accuracy of the output, its conformity to requirements and its support of organizational efficiency are the most critical factors in gauging the effectiveness of a BI system. They set forth the necessity of measurement indicators to show the performance of a BI system, but did not provide the means to evaluate the intelligence of the system. Lnnqvist and Pirttimki [5] discussed BI as a set of support processes and stated that most literature focuses on justifying the value of BI. This is an important issue when the usefulness of BI is under initial consideration, and also later when there is a need to determine if BI continues to provide valuable results. They encouraged practitioners and researchers to start applying the measurement of BI to their work. Elbashir et al. [10] developed a new concept, based on an understanding of the characteristics of BI systems in a processoriented framework. They examined the relationship between the performance of business process and organizational performance, finding significant differences in the strength of their relationship in different industrial sectors. They concluded by stressing the need for a better understanding of BI systems through evaluation. Kahraman et al. [9] discussed the roles of intelligence techniques in enterprise information systems, to obtain a successful business strategy. Intelligence techniques are rapidly emerging as new tools in information management systems. They stressed that intelligence techniques can be used in the decision process of enterprise information systems. They concluded that hybrid systems that contain two or more intelligence techniques would be used more in future; therefore, organizations need to take a sophisticated approach to the evaluation of the intelligence of their information systems. Considering recent literature and related work described above, organizations need models and approaches to evaluate and assess the BI capabilities and competencies of their work systems, in order to achieve competitive advantage by making the right decisions at the right time. In this research, we have identified the relevant evaluation criteria and have created an approach to evaluate the intelligence of enterprise systems. To identify these criteria, in current research a comprehensive review of relevant literature was conducted in 2010 and 2011 by authors. Articles from journals, conference proceedings, doctoral dissertations and textbooks were identified, analysed, and classified. It was also necessary to search through a wide range of studies from different disciplines, since numerous criteria are related to the intelligence of a system and to decision support. Therefore, the scope of the search was not limited to specific journals, conference proceedings, doctoral dissertations and textbooks. Management, IT, computing and IS are some common academic disciplines in BI research. Consequently, the following online journals, conference databases dissertation databases and textbooks were searched to provide a comprehensive bibliography of the target literature: ABI/INFORM database, ACM Digital Library, Emerald Fulltext, J Stor, IEEE Xplore, ProQuest Digital

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M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 Table 2: BI evaluation criteria. Criteria ID C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19 C20 C21 C22 C23 C24 C25 C26 C27 C28 C29 C30 C31 C32 C33 C34 Criteria name Group sorting tools and methodology (Groupware) Group decision making Flexible models Problem clustering Optimization technique Learning technique Import data from other systems Export reports to other systems Simulation models Risk simulation Financial analyses tools Visual graphs Summarization Evolutionary prototyping model Dynamic model prototyping Backward and forward reasoning Knowledge reasoning Alarms and warnings Dashboard/recommender Combination of experiments Situation awareness modelling Environmental awareness Fuzzy decision-making OLAP Data mining techniques Data warehouses Web channel Mobile channel E-mail channel Intelligent agent Multi agent MCDM tools Stakeholders satisfaction Reliability and accuracy of analysis Related studies [2225] [2628] [23,29,11] [23,30,31] [3236] [37,19,38,39] [40,1,34,41] [40,42,34] [37,34,41,39] [27,43] [4446] [47,48,37,49,35] [50,51,37,2] [52,50,46,53] [54,50,5557] [58,27,53] [40,59,27] [2,60,53] [61,62,18] [63,61,58,64,60,65] [45,59,66] [6769] [70,29,71,72,28] [7375,42,76,77] [50,42,76,78] [73,7981] [73,82,83,2] [2,84,78] [85,86,84] [46,77,28] [87,88,85] [89,90,25,91] [92,5,27,56] [93,5,94,29,56,2]

Dissertations, Sage, Science Direct, and Web of Science. The literature search was based on the descriptors, BI capabilities, decision support, decision-support criteria, BI evaluation criteria, BI assessment criteria, BI requirements and intelligent tools capabilities. The criteria identified are listed in Table 2 as BI evaluation criteria. 3. Research objectives and methodology To answer the research questions posed in Section 1, several research objectives were determined. The main objective was to study the effect of BI evaluation of enterprise systems on the decision-support environments of organizations. Subordinate research objectives were to determine the main factors in the evaluation of BI competencies and their relative importance. Based on a literature review and similar research [95,96], as well as recent research on BI by the authors, statistical methods were applied and the research structure was developed based on the ten stages shown in Figure 1. The first stage was the literature review of business intelligence specifications and capabilities, i.e. the criteria of a system that defines its BI, as listed in Table 2. In the second stage, a questionnaire was designed with three main parts. The first section of the questionnaire consisted of questions about the characteristics of the interviewees. The content of the second section was based on questions about BI competency, which were asked to determine the importance of the evaluation criteria, and finally, the third section of the questionnaire included questions to learn about the effect of BI evaluation on the decision-support environments of the organizations.

In the third stage, the survey data from the interviewees were collected; to test hypothesis, it was necessary to determine the statistical distribution of the collected data from the second part of the questionnaire. Subsequently, based on the distribution of data, either a parametric or non-parametric test was performed to prove the hypothesis. The main purpose of the fifth stage was to confirm the hypothesis from stage two. The sixth and seventh stages of the research framework are based on factor analysis, and concentrate on the extraction and identification of the BI evaluation criteria affecting the intelligence of enterprise systems. Factor analysis is also a generic name given to a class of multivariate statistical methods whose primary purpose is to define the underlying structure in a data matrix. Using factor analysis, we first identified the separate factors of the structure and then determined the extent to which each variable was explained by each factor. Once these factors and the explanation of each variable were determined, summarization and reduction of the data were carried out. By summarizing the data, the factor analysis derived underlying factors that when interpreted and understood, described the data in a much smaller number of concepts than the original individual variables [97]. Evaluating the suitability of collected data, performing factor analysis, and naming the extracted factors were individual steps. Finally, the most important factors and their effect were made clear through labelling. An expert tool was then designed based on the extracted knowledge of the relationships between BI competencies and the main factors of intelligence levels in enterprise systems. This new tool can help an organization to study and diagnose the intelligence of its business systems.

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Figure 1: Research structure and stages.

Table 3: Demographic profiles of interviewees. Description Male Female 22 Sum Governmental Private Sum Under BS BS MS or higher education Sum Structured Semi structured Unstructured Sum Less than 5 years 5 to less than 10 years 10 to less than 15 years 15 to less than 20 years 20 years and above Sum Number of interviewees 154 12.5 176 102 74 176 20 83 73 176 14 55 107 176 7 69 64 25 11 176 Percent 87.5 100 100 58 42 100 11.4 47.2 41.5 100 8 31.2 60.8 100 4 39.2 36.4 14.2 6.2 100 Cumulative (percentage) 87.5

Gender

Organization type

58 100 11.4 58.5 100 8 39.2 100 4 43.2 79.6 93.8 100

Educational degree

Decision-type

Seniority

3.1. Design of the questionnaire A questionnaire was designed and structured in three sections (Appendix). Information related to the basic profile of the interviewees was requested at the beginning of the questionnaire. In the second part, 34 questions were asked to measure their attitudes, based on the importance of the BI evaluation criteria listed in Table 2. The selected responses were evaluated on a Likert Scale [98] and the responses could be: very strongly disagree, strongly disagree, disagree, no opinion, agree, strongly agree, or very strongly agree. In other words, the second part of the questionnaire measures their opinions about the importance of each BI competency of the enterprise system. Following these 34 questions, one question (Y ) in the third part of the questionnaire was designed to measure the effect of BI evaluation on the decision-support environments of their organizations: Y . Is the evaluation of BI for enterprise systems important to the decision-support environment in the organization? 3.2. Methodology of the data collection Following the research objectives, the main targets of the study were stakeholders in organizations, who were involved

in decision making and were familiar with BI and IT tools. Therefore, the main targets of the sampling were CIOs (Chief Information Officers), IT Managers, and IT Project Managers, who are involved in IT efforts and decision making. Based on [99,96], the data-collection method was based on a simple random selection of targets in the list of Fortune 500 companies. 4. Empirical results and analysis 4.1. Data collection The research targets were CIOs (Chief Information Officers), IT Managers and IT Project Managers. The number of questionnaires sent out was 420 and the number returned was 185, which showed a return rate of 44.04%. Of the returned questionnaires, twenty-six were incomplete and thus discarded, making the number of valid questionnaires 176, or 41.90% of the total number sent out. 4.2. Demographic profiles of interviewees The demographic profiles of the interviewees who participated in the survey have been summarized in Table 3. The results show that most participants (87.5%) are male and are from

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Table 4: Wald-Wolfowitz test results (H1 prove test). Question Cluster 1 2 N 15 161 Number of runs 2 Z Asymp. Sig. (1-tailed) 0.000

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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 interviewees (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 unstructured 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, one question was posed at the end of the survey that presented the hypothesis: H1. Evaluation of the BI of enterprise systems is vital to the creation of a decision-support environment in an organization. One of the most popular ways to identify the distribution of the data, statistically, is the one-sample KolmogorovSmirnov test. The KolmogorovSmirnov test compares the observed cumulative distribution function for a variable with a specified theoretical distribution, which may be normal, uniform, Poisson or exponential. Many statistical parametric tests require normally distributed variables. The one-sample KolmogorovSmirnov test can be used to test whether or not a variable is normally distributed [100]. According to our test results, the p-value of all questions was less than 0.05, which shows that their distribution was abnormal. As the statistical distribution of variables of Y was also abnormal, a statistical non-parametric test must be used to prove H 1. For this, a Wald-Wolfowitz test was used to determine the difference between the agree and disagree results. Wald-Wolfowitz is a test that examines whether two independent samples (clusters) come from the same population or not. The Wald-Wolfowitz test combines and ranks the observations from both groups. If the selected groups are from the same population, they should be randomly scattered throughout the ranking and result in many runs. A significance level below 0.05 indicates that the two groups differ, as also shown in Table 4. With reference to a significance-level of less than 0.05 in the Wald-Wolfowitz test results, and reaching a consensus for the main question (Y ), evaluation of the BI of enterprise systems is vital to the creation of a decision-support environment in an organization. In this way, we can say that an organization needs to evaluate the BI specifications of its systems and this evaluation can improve their decision-support environment. Therefore, from the result of this test of the hypothesis, it can be concluded that organizations should evaluate their systems with BI criteria. 4.4. Extraction of factors Factor analysis is a technique that is mainly suitable for exploring the patterns of complex, multidimensional relationships encountered by researchers. Factor analysis can

Table 5: Results of the rotated factor analysis. Factor Initial eigen values Rotation sums of squared loadings Total 1 2 3 4 5 6 16.114 3.173 1.850 1.457 1.348 1.188 7.264 6.244 5.044 2.977 2.048 1.553 Percentage of variance 21.366 18.366 14.836 8.755 6.025 4.568 Cumulative percentage 21.366 39.732 54.568 63.324 69.349 73.917

be utilized to examine the underlying patterns or relationships for a large number of variables, and determine whether the information can be condensed or summarized into a smaller set of factors or components [97]. An important tool in interpreting factors is factor rotation. The term rotation means exactly what it implies. Specifically, the reference axes of the factors are turned about the origin until some other position has been reached. The un-rotated factor solutions extract factors in the order of their importance. The first factor tends to be a general factor, with almost every variable loading significantly, and it accounts for the largest amount of variance. The second and subsequent factors are then based on the residual amounts of variance. The ultimate effect of rotating the factor matrix is to redistribute the variance from earlier factors to later ones to achieve a simpler, theoretically more meaningful factor pattern. The simplest case of rotation is an orthogonal rotation in which the axes are maintained at 90 [97]. In order to determine whether the partial correlation of the variables is small, the KaiserMeyerOlkin (KMO) test to measure sampling adequacy [101] and the Bartletts 2 test of sphericity [102] were used before starting the factor analysis. The result was a KMO of 0.925 and the Bartlett test p-value less than 0.05, which showed good correlation. The factor analysis method is the principle component analysis in this research, which was developed by Hotteling [99]. The condition for selecting factors was based on the principle proposed by Kaiser [101]: An Eigen value larger than one, and an absolute value of factor loading greater than 0.5. The 34 variables were grouped into six factors and the results can be seen in Table 5. Six factors had an Eigen value greater than one, and the

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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 according to the Varimax rotation method. 4.5. Naming the factors The factors were given short labels indicating their content. Based on the meaning and functionalities of the criteria that are related to each factor, a conceptual label was assigned to them. The names and content of the six factors are shown in Table 6. The names that have been assigned to the extracted factors are Analytical and Intelligent Decision-support, Providing Related Experiment and Integration with Environmental Information, Optimization and Recommended Model, Reasoning, Enhanced Decision-making Tools, and finally Stakeholders

Satisfaction. Extracted factors and their loading on the main concept or BI evaluation are shown in Figure 2. According to the expectations of the research [5,11,9,4], the decision-support capabilities and BI competencies of enterprise and work systems can be measured and evaluated for each factor. Therefore, there is good conformity between the research objectives and the results obtained. 5. Designing the BI evaluation tool The results of the factor analysis indicate that the intelligence of enterprise systems can be evaluated based on six main factors. To measure the intelligence of these factors, the system should be evaluated by 34 criteria through questions about

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

BI competencies. Using the extracted loads of each criterion within its factor, the intelligence of the system can be measured and depicted on six dashboards (for the six factors). Finally, the most important factors and their effect become clear through labelling. The authors have implemented the expert evaluation tool in a VB.NET environment. This tool has three functionalities: to evaluate a new system, to edit/view an evaluated system and to compare evaluated systems. The first page of this expert evaluating tool is shown in Figure 3. The tool requests the systems-type of the enterprise system (ERP, SCM, CRM, Office Automation, etc.) and the organization-type (private, government or public). It also asks about overall specifications of the enterprise system, such as its functions and the number of users. It also requests specifications of the organization, such as decision-types. This tool utilizes the 34 BI criteria as questions for diagnosis, and receives answers in a Likert Scale format; very low to

very high. A sample page is shown in Figure 4. Computations are done based on the factors and their loading, on the 34 criteria that were discussed in Section 4. Reports which include the overall level of BI and its intelligence level in the six areas are depicted on the dashboards. A comparison of the factors that share in the intelligence of enterprise systems are also shown in charts. A sample of the intelligence-level of a sample system and its comparison charts are illustrated in Figure 5. 6. Conclusion This research confirmed the necessity to evaluate BI competencies and the specifications of enterprise systems, and demonstrated that this evaluation can advance decisionsupport environments. To accomplish this, a survey was carried out and the responses of the interviewees were grouped into categories of agree (agree, strongly agree, very strongly agree)

M. Ghazanfari et al. / Scientia Iranica, Transactions E: Industrial Engineering 18 (2011) 15791590 Table 6: The names and related criteria of factors explored. Factor Factor name ID. C12 C18 C24 C25 C26 C27 C28 C30 C31 C13 C29 C1 C3 C4 C7 C8 C20 C21 C2 C22 C5 C6 C9 C10 C14 C15 C19 C11 C16 C17 C23 C32 C33 C34 Criteria Visual graphs Alarms and warnings OLAP Data mining techniques Data warehouses Web channel Mobile channel Intelligent agent Multi agent Summarization E-mail channel

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F1

Analytical and Intelligent Decision-support

F2

Providing related experiment and integration with environmental information

Group sorting tools and methodology (Groupware) Flexible models Problem clustering Import data from other systems Export reports to other systems Combination of experiments Situation awareness modelling Group decision-making Environment awareness Optimization technique Learning technique Simulation models Risk simulation Evolutionary prototyping model Dynamic model prototyping Dashboard/recommender Financial analyses tools Backward and forward reasoning Knowledge reasoning Fuzzy decision-making MCDM tools Stakeholders satisfaction Reliability and accuracy of analysis

F3

Optimization and recommended model

F4

Reasoning

F5 F6

Enhanced Decision-making Tools Stakeholders satisfaction

and disagree (no opinion, disagree, strongly disagree and very strongly disagree). The Wald-Wolfowitz test was used to determine the significant differences between the two groups. The results show that the agrees were consistent for the final question (Y ), meaning that organizations should evaluate the BI competencies of systems, which can improve their decisionsupport environment. From a wide-ranging literature review, 34 criteria for BI evaluation were gathered and embedded in the second part of the research. The interviewees determined the relative importance of the criteria from these 34 variables by assigning ranks to them. The research then applied factor analysis to extract the six main factors for evaluation. These factors were Analytical and Intelligent Decision-support, Provision of Related Experimentation and Integration with Environmental Information, Optimization and Recommendation of a Model, Reasoning, Enhanced Decision-making Tools, and, finally, Stakeholder Satisfaction. These are structural factors that show the scope of the intelligence of enterprise systems and their relationship with BI competence. The identification of these criteria represents an important contribution of this research. Utilizing these criteria, evaluating them in work systems and consequently determining the intelligence of systems can help organizations to improve decision support for decision makers and enable companies to achieve competitive advantage. Using the results of the factor analysis, the intelligence of 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 BI competencies. Using the extracted loads of each criterion

within its factor, the intelligence of the system is measurable and is depicted on the six dashboards (for the six factors). An expert tool was designed, which utilizes these criteria to formulate survey questions that reveal the intelligence of each area of an enterprise system. This new tool has the functionalities to evaluate a new system, as well as to compare existing systems, and it produces intelligence-level dashboards and comparison charts of the intelligence areas. The authors believe that this research will enable organizations to make better decisions for designing, selecting, evaluating and buying enterprise systems, using criteria that help them to create a better decision-support environment in their work systems. The main limitations of this research include the localization of interviewees, differences between the functionalities of enterprise systems and the novelty of BI in business and industry. Of course, further research is needed. One important topic for the future is the design of expert systems (tools) to compare vendor products. Another is application of the criteria and factors that we have identified and defined in an MCDM framework, in order to select and rank enterprise systems based on BI specifications. The complex relationship between these factors and the satisfaction of managers with the decisionmaking process should also be addressed in future research. Appendix. The survey instrument As explained previously a questionnaire as follows has been designed and structured in Tables A.1A.3.

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Table A.1: Profile of the interviewees. Gender Organization type Educational degree Decision-type Seniority Male Governmental Under BS Structured Less than 5 years 15 to less than 20 years Female Private BS Semi-structured 5 to less than 10 years 20 years and above

MS or higher education Unstructured 10 to less than 15 years

Table A.2: Criteria for evaluation of BI. The following are your attitude about BI capabilities and competencies in enterprise systems Very strongly disagree Group sorting tools and methodology (Groupware) Group decision-making Flexible models Problem clustering Optimization technique Learning technique Import data from other systems Export reports to other systems Simulation models Risk simulation Financial analyses tools Visual graphs Summarization Evolutionary prototyping model Dynamic model prototyping Backward and forward reasoning Knowledge reasoning Alarms and warnings Dashboard/Recommender Combination of experiments Situation awareness modelling Environmental awareness Fuzzy decision-making OLAP Data mining techniques Data warehouses Web channel Mobile channel E-mail channel Intelligent agent Multi agent MCDM tools Stakeholders satisfaction Reliability and accuracy of analysis 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Strongly disagree 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 Disagree 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 No opinion 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Agree 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 Strongly agree Very strongly agree 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7

Table A.3: The necessity of BI evaluation. Very strongly disagree Y . Is the evaluation of BI, for enterprise systems, important to the promotion of decision-support in your organization? 1 2 Strongly disagree 3 Disagree No opinion 4 5 Agree 6 Strongly agree Very strongly agree 7

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Mehdi Ghazanfari is full Professor in the Industrial Engineering Department at Iran University of Science and Technology (IUST). He received his Ph.D. degree in System Analysis and Production Planning from NSW University, Australia, in 1996. He is currently Editor-in-Chief of the New Economy and Commerce (JNEC) Journal, and has had more than 30 papers published in the areas of data mining, artificial intelligence and information systems.

Mostafa Jafari has a B.E. degree in Mechanical Engineering, a M.E. degree in Productivity Engineering and a Ph.D. degree in Industrial Engineering from IIT, Delhi. He is currently Assistant Professor in the Industrial Engineering Department at Iran University of Science and Technology (IUST), Tehran, Iran, working in areas of strategic planning, business process reengineering, and knowledge management. He has had more than 20 research papers and five books published in the field of Industrial Engineering.

Saeed Rouhani is a Ph.D. degree candidate of System Engineering at Iran University of Science and Technology, Tehran, Iran. He received his B.S. degree in Industrial Engineering, in 2003, from Iran University of Science and Technology, Tehran, Iran, and a MA degree in Information Technology Management, in 2005, from Allame Tabatabiee University, Tehran, Iran. His research interests are enterprise resource planning systems, business intelligence, information technology, and decision making. He has had three books and more than 10 papers published in different conferences and journals.