ASSESSMENT OF BUSINESS INTELLIGENCE SYSTEMS APPLICATION ON PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN LAGOS STATE, NIGERIA

Abstract

The implementation of Business Intelligence Systems (BIS) in Small and Medium Enterprises (SMEs) has been challenged by the lack of understanding and knowledge of its critical success factors and this affects the performance of SMEs. This study investigated the effect of the critical success factors of SMEs in BIS application on SMEs performance in the Lagos State, Nigeria. Survey research design was adopted for this study. A sample size of three hundred and eighty- seven (387) respondents was randomly selected using the simple random sampling technique from the population through the Yamane’s formula. Primary data were collected through questionnaire, and analysed through the descriptive and inferential methods by using both Statistical Package for Social Sciences (SPSS) version 22 and Partial Least Square Structural Equation Modelling (PLS- SEM) SmartPLS3. The results of the descriptive analysis showed that the most critical success factor of SMEs is the environment factor which has a mean value of 4.22, followed by the technology factor with a mean value of 4.04, and the process factor with a mean value of 4.01. The organisation factor has a mean value of 3.99 and represents the least critical success factor of SMEs in business intelligence application. The result further showed that the major challenge of Business Intelligence (BI) application among SMEs in Lagos State is its high cost of implementation (mean = 3.85). The result of the hypothesis tested at 0.05 level of significance (p≤0.05) showed that the environment factor has a significant effect on SMEs performance (p = 0.000), technology factor has a significant effect on SMEs performance (p = 0.000), and process factor has a significant effect on SMEs performance (p = 0.003). In addition, the result showed that organisation factor has no significant effect on SMEs performance (p = 0.066). The study concluded that environment factor, technology factor, and process factor are the prominent success factors that affect SMEs performance. It was recommended among others that the management of SMEs should establish a business intelligence vision and communicate it to their stakeholders.