Adoption of Business Intelligence Tools by Small and Medium-Scale Enterprises in North Central Province, Sri Lanka

Abstract

Business Intelligence (BI) is one of the decision support tools that offer the ability to gather, store, access and analyze huge amounts of data and support for making effective decisions. There is a rich body of literature relating to BI adoption and their related benefits over the Small and Medium Enterprises (SMEs) in developed countries. But the researcher's pilot survey depicts that in developing countries, especially in Sri Lanka, even if larger companies adhere to the new technologies, it's remaining very low to the SMEs. Therefore, those companies are still taking a long time to analyze data, interpret data and present data. The objective of this study was to address this research gap by examining the factors affecting BI adoption by SMEs in the North Central Province in Sri Lanka. North Central Province was selected due to ease of access to the sample for data collection. By initiating the deductive approach, a research model was developed using independent variables of relative advantages, complexity, organizational resource availability, competitive pressure and the dependent variable of BI adoption by SMEs. 150 SMEs considered the sample out of 7461 SMEs of the total population which the details obtained through the Divisional Secretariat Offices in Anuradhapura and Polonnaruwa. An administrative questionnaire was distributed to collect data adhering to the Stratified Sampling technique. The collected data were analyzed using SPSS version 21.0 and the results revealed that relative advantages, complexity, organizational resource availability and competitive pressure showed a high effect on BI adoption and the mean value is higher than 3.0. According to correlation analysis, three factors showed a significant and positive relationship with the dependent variable except for complexity with BI adoption. According to that three hypotheses were accepted and one was rejected. The research findings elaborate and statistically proved the reasons for minor adoption of new technologies including Business Intelligence by SMEs in North Central Province. Further, this study highlighted the actions that need to be taken by the Sri Lankan government and IT/IS vendors while providing direction for future researchers.