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South African Journal of Economic and Management Sciences

On-line version ISSN 2222-3436
Print version ISSN 1015-8812

S. Afr. j. econ. manag. sci. vol.17 n.2 Pretoria Feb. 2014




A First step towards Service-Dominant logic as a new approach to overcome challenges in business intelligence



Pamela Clavier; Hugo Lotriet; Johan van Loggerenberg

Department of Informatics, University of Pretoria




High expectations are set for Business Intelligence (BI), yet it fails to consistently deliver accordingly: there are numerous reports of BI challenges and failures. Existing approaches to address BI challenges are largely found to be ineffective, highlighting the need for a new approach.
This paper examines how BI is perceived or understood and establishes that, firstly, BI is inherently grounded in Goods-Dominant (G-D) logic and secondly, that this can be linked to the challenges that are experienced within BI. A recommendation is made for a shift to Service-Dominant (S-D) logic as a new avenue of exploration to assist in overcoming BI's prevailing challenges. Identifying the inherent G-D logic in BI provides the first step necessary in making this shift.
Research findings are based on an interpretive case study of a South African Banking institution as well as a literature review.

Key words: business Intelligence, service-dominant logic, goods-dominant logic, business intelligence challenges.

JEL: O32, M15



1 Introduction

This paper examines Business Intelligence (BI) - a specialised Information System (IS) (Berstein, Grosof, & Provost, 2011) - at an abstract level, as a series of exchange activities performed with the ultimate purpose of providing actionable information and/or intelligence for use in decision-making (Hočevar & Jaklič, 2010). BI is contextualized in terms of exchange because it is identified that there are various exchange activities that take place within the BI environment throughout the BI process, i.e. processes to transform raw data into useful information for insights and decision-making (Duan & Da Xu, 2012). Understanding BI as an exchange process offers opportunities to understand the various relationships (e.g. BI customer and BI provider), their interactions and their perceptions and understanding of the end-to-end flow that takes place within a BI environment from when data is sourced until when it is used (in another form, e.g. intelligence). This is complemented by application of Service-Dominant (S-D) logic as a lens through which to view the BI exchange process.

S-D logic is a philosophical lens through which economic and social exchange processes can be viewed (Vargo, 2011), including exchange processes that take place within the BI environment. S-D Logic questions traditional views of the exchange of goods and service (Kowalkowski & Ballantyne, 2009), referring to these views as "G-D logic" (Lusch, Vargo & Wessels, 2008). S-D logic urges for a shift from G-D logic; establishing that G-D logic is an inadequate logic that fails to benefit today's exchange process (Vargo & Lusch, 2004a). While S-D logic cannot be proved or disproved (Williams & Aitken, 2011), it can be demonstrated as a viable approach. Various research efforts across disciplines - e.g. Information and communication technology (ICT), economics and marketing - show how G-D logic fails to serve exchange optimally (Vargo & Lusch, 2004a), suggesting S-D logic as a more viable approach.

This paper highlights the inadequacies of GD logic that are apparent within the BI environment, linking these to how BI is perceived or understood as well as to the challenges that are experienced within BI. A perception results in a set of beliefs through which the world is interpreted or interacted with, which results in challenges or opportunities that are created within a specific situation and context (Heylighen, 2000). In this paper, the way that BI is perceived or understood is explored in terms of, firstly, perceptions of BI that emerge from how BI is defined and secondly, the beliefs about BI that emerge in the research material. BI challenges are then examined as possible results of the perceptions and beliefs through which the world of BI is interpreted and interacted with. This provides a broader view under which BI exchange - and the challenges experienced therein - may be understood.

Findings are based on a literature review -including extensive analysis of BI definitions -and a case study. The case study was conducted over a three and a half year period at one of South Africa's largest banks, referred to as Fortune Bank (FB) to protect its anonymity. FB and its BI vendors were involved in the case study.

This paper's principal contribution is identification of BI's inherent G-D logic, providing the necessary first step towards exploring S-D logic as a new approach to overcome BI's prevailing challenges. Research on how BI is typically understood and the relationship between this understanding and the challenges experienced in BI are further contributions. Finally, another contribution is the unique application of S-D logic to BI within the realm of Information Systems (IS) research.

This paper's research questions are:

1) How is BI understood/perceived?

2) Is the way BI is understood grounded in G-D or S-D logic?

3) Can BI challenges be linked to G-D logic or the way BI is understood?


2 Literature review

2.1 Literature review methodology

A systematic literature review was conducted iteratively over four years, with the bulk of the review being completed in 2012. Steps based on Vom Brocke, Simons, Niehaves, Riemer, Cleven and Plattfaut (2009) were executed to advance knowledge on BI and S-D logic and to identify gaps in the existing body of knowledge presenting research opportunities (Henning, Van Rensburg & Smit, 2004). Steps included: 1) define scope 2) conceptualise the topic 3) gather literature 4) analyse and synthesise literature 5) compile literature review. The literature review was then used as a foundation for the case study, which is detailed in Section 3 of this paper. Literature from South African and international academic and practitioner sources was reviewed to gain representative coverage of current and historical as well as conceptual and practical research on BI and S-D logic.

Webster and Watson's (2002) guidelines to identify research material by sourcing material cited in primary material (backwards) and material that cites the primary material (forwards) were followed to gather literature. Findings were summarised and categorised using keywords to facilitate identification of relationships, trends and discord in gathered material and to facilitate comparison with case study findings.

To analyse literature on BI perceptions, the approach taken by Payne and Frow (2005) was applied. Payne and Frow analyse Customer relationship management (CRM) definitions to understand perceptions of CRM. This entailed collation of BI definitions followed by analysis thereof. 70 BI definitions - reflective of academic/ practitioner and South African/global literature spanning from 1986 to 2012 - were selected for analysis based on the definition's relevance and the source's academic or professional credibility. Analysis was performed by summarising and categorising keywords to flag patterns and discord that emerged in the data that was gathered. In addition to Payne and Frow's approach, discourse on BI definitions (e.g. from Ackerman, 2005; Herschel, 2011; Pirttimäki, 2007) was analysed in the same way.

The literature review as a whole was refreshed in 2013 to confirm current relevance. The 2013 review was performed through research of a representative sample rather than a repeat of previous in-depth reviews.

2.2 BI expectations versus BI success

BI is consistently ranked as a top business priority in global Gartner surveys (Hočevar & Jaklič, 2010) and is identified as the most essential technology for the organisation to purchase (Chuah & Wong, 2011) resulting from the benefits the organisation is described to gain after purchasing a BI solution. Nearly 90 per cent of organisations across the world have implemented a BI capability, with BI seeing a global spend of around USD$60 billion annually (Coulonval, Curitz & Finkelstein, 2010). South African banks, in particular, are reported to have invested significantly in BI after realising its importance for strategic and tactical decision-making (Vanmare, 2006).

This sustained intense investment in BI should indicate that investors (organisations) are receiving benefits from their investment. Instead, there are reports that BI Return on Investment (ROI) is difficult to measure (Vanmare, 2006) and still further reports of major BI challenges and failures. In South Africa, financial institutions struggle to realise value from their BI investments due to challenges in unlocking actionable BI for decision-making (Ackerman, 2005). In fact, over 50 per cent of BI projects are reported to fail worldwide (Atre, 2011; LaValle, Hopkins, Lesser, Shockley & Kruschwitz, 2010).

2.3 BI challenges and existing approaches to overcome BI challenges

The word "challenge" may be understood as: a new or difficult task that tests ability and skill (e.g. "schools must meet the challenge of new technology", i.e. "deal with it successfully") or; to question a statement/action or; an invitation to enter a competition, fight, etc. (Hornby, 2005). The understanding presented in the first definition is applicable to BI challenges as discussed in this paper. Furthermore, a literature review of BI challenges (Clavier, Lotriet & Van Loggerenberg, 2012) establishes that BI challenges are seen as difficulties experienced within or impacting on the BI environment that, if overcome, contribute towards achieving successful use of BI.

Previous research (Clavier, 2012) discusses and categorises BI challenges and existing attempts to resolve them in a literature review.

To build on rather than duplicate, only key findings are now repeated.

Key findings on BI challenges include: firstly, as a specialised type of IS (Berstein et al., 2011), BI faces many of the same challenges that ISs do (e.g. absence of adequate sponsorship (Hočevar & Jaklič, 2010), in addition to specific BI challenges (e.g. BI is an ill-defined discipline in an ambiguous environment (Ackerman, 2005; Pirttimaki, 2007; Herschel, 2011); secondly, while there are many ways in which BI challenges may be categorised, clear categories emerge consistently in academic and practitioner literature, namely: use, data, integration, alignment, personnel and skills, and sponsorship.

Table 1




While the importance of all these BI challenge categories is recognised, this paper focuses on "use" and "data" to enable greater depth within the bounds of the paper's space constraints. These are incorporated in Table 3 to enable a comparison of literature and case study findings. "Use" and "data" are selected as, during the literature and case study review, it was discovered that much overlap exists between these categories, added to which, the case study resulted in a rich data set on these specific categories. It is the intention to follow-up on this paper in the future with subsequent papers that discuss the other challenge categories in similar depth.

Key findings on existing approaches to resolve BI challenges are that they: largely fail to consistently and comprehensively resolve BI challenges; do not focus on addressing BI's prevailing challenges as they are not directly associated with challenges; tend to focus on BI up to the end of implementation of an IT solution - neglecting use of BI or the full data life cycle; are typically restricted to the environmental and organisational parameters of designing a BI system.

These key findings highlight the need for a new approach that overcomes existing approaches' limitations. In response, this paper recommends taking a step back to first understand BI conceptually and then examining findings gained from this understanding using G-D and S-D logic. To understand BI conceptually, this paper examines how BI is perceived or understood, examining BI definitions and discourse on BI definitions. G-D and S-D logic are then applied.

Literature review sections that follow provide context for G-D and S-D logic, position BI in terms of G-D and S-D logic and then present literature review findings on how BI is perceived.

2.4 G-D and S-D logic

G-D and S-D logic fit within the multi-disciplinary research area of service science (Maglio & Spohrer, 2008). Service Science is supported by S-D logic as a philosophical foundation, service systems theory as a theoretical foundation and practical developments such as service management and service computing among others (Maglio & Spohrer, 2008). Vargo and Lusch's ground-breaking SD logic paper (2004a) put S-D logic in the spotlight, attracting much dialogue (Randall, 2007). Since then, there have been at least six S-D logic focused conferences, twelve S-D logic special issues or journal sections, hundreds of papers and presentations grounded in S-D logic and thousands of citations and cross citations to S-D logic related work - from various disciplines and countries across the world (Vargo, 2011; Williams & Aitken, 2011). This paper therefore unashamedly uses what has already been established in the philosophy of S-D logic as a point of departure. A brief introduction is now provided for the purpose of context for this paper.

G-D and S-D logic are lenses or philosophies to view "exchange" (Vargo, 2011). Exchange is the act of giving and receiving (Hornby, 2005), which also applies to economic or social acts of giving (e.g. selling, leasing) and receiving (e.g. buying, renting). Exchange centres on relationships and interactions (Schultz & Gnoth, 2008) to give provider and customer (and others involved) access to resources that provide them with benefit (Chandler & Vargo, 2011).

The traditional view of exchange - G-D logic - promotes value-in-exchange and a separation of producer and consumer (Gummesson, 1995; Vargo & Lusch, 2006), it focuses on the product (including its embedded features), means, producer and production (Vargo & Lusch, 2006; Edvardsson, Ng, Zhi Min, Firth & Yi, 2011). G-D logic typically sees exchange as a linear series of activities of sourcing, producing and distributing tangible saleable goods, designed and built by a producer who embeds the goods with utility and value during the production and distribution processes with a consumer in mind Vargo & Lusch, 2004a; Edvardsson et al., 2011). In cases where no tangible product is exchanged, e.g. having a haircut, attending a class or consulting with a lawyer, G-D logic refers to a service, where service is seen as unproductive and, although not useless, as failing to contribute to the creation of wealth (Vargo, 2011; Kowalkowski & Ballantyne, 2009). Further examples of G-D logic characteristics are tabulated in Table 3, where they are used to show the inherent G-D logic that can be observed in BI.

It may be argued that G-D logic is now a thing of the past as a result of postindustrialisation and the rise of the service sector (World Bank, 2013). However, S-D logic is significantly broader than the traditional view of service (Vargo & Lusch, 2008) and, as will be demonstrated in this paper, G-D logic is not a thing of the past; there are profound implications of a G-D logic based mindset that can be seen within BI today (Clavier, 2012).

S-D Logic questions G-D logic's traditional views of service and recognises traditional service as "direct service" and goods as "indirect service" (Kowalkowski & Ballantyne, 2009). It recognises the service that is inherent in goods and, conversely to G-D logic, defines goods in terms of service. Service is seen as the application of competences (skills and knowledge) through deeds, processes and performances for the benefit of another entity or the entity itself (Vargo & Lusch, 2004b). Skills and knowledge are seen to be embedded in goods, where goods are the transport mechanism for distributing these skills and knowledge (Vargo & Lusch, 2004a).

S-D logic's central tenet is that service is the basis of all exchange (Vargo & Lusch, 2004a). It's primary definition being that service is the application of competences for the benefit of another entity (Vargo & Lusch, 2004a). It sees exchange (including the exchange of goods) as a flow of service where customer and provider collabora