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Business intelligence and BI and OP:

alignment with
organizational performance BPM

The role of alignment with business process

management
Dalia Su
sa Vugec, Vesna Bosilj Vuk
sic and Mirjana Pejic Bach Received 27 August 2019
Department of Informatics, Faculty of Economics & Business, University of Zagreb, Revised 10 January 2020
Accepted 20 January 2020
Zagreb, Croatia, and


Jurij Jakli
c and Mojca Indihar Stemberger
Academic Unit for Business Informatics and Logistics,
School of Economics and Business, University of Ljubljana, Ljubljana, Slovenia

Abstract
Purpose – Organizations introduce business intelligence (BI) to increase their performance, but often, this
initiative is not aligned with the business process management (BPM) initiative, which also aims to improve
organizational performance. Although some findings from the literature indicate that BI implementation has a
positive impact on organizational performance, the impact seems to be indirect. Therefore, the purpose of this
study is to enhance the understanding of how BI maturity is translated into organizational performance.
Alignment of BI and BPM initiatives seems one possible way for creating business value with BI, particularly
because BI enables process performance measurement and management, which allows the BI initiative to
become more business focused.
Design/methodology/approach – A questionnaire was prepared and used to collect data in Croatian and
Slovenian organizations with more than 50 employees. A BI–BPM alignment measurement instrument was
developed for the purpose of this study using the recommended process of scale development and validation. A
total of 185 responses were analyzed by the structural equation modeling technique.
Findings – Our results provide evidence that the effect of BI on organizational performance is fully mediated
by alignment of BI and BPM initiatives, and therefore, BI business value can be generated through the use of
common terminology and methodologies, as well as a strong communication between BI and BPM experts,
managers and teams in order to coordinate the two initiatives.
Originality/value – This study has responded to the call for better understanding of how the impact of BI on
organization performance is realized. It confirmed that BI and BPM initiatives should be aligned in order to give
BI a business value.
Keywords Organizational performance, Mediation, Business intelligence, Business process management,
BI-BPM alignment
Paper type Research paper

1. Introduction
The business intelligence (BI) concept is not new and has been applied by many companies
and other organizations. Lately, it has become even more popular because it includes
concepts like analytics, big data and artificial intelligence that form an integral part of digital
transformation, an important concept for business executives in companies of all sizes and
industries, also in the public sector. Decision-making based on BI use is valuable for
organizations that have the ultimate goal of increasing their organizational performance (OP)
(Audzeyeva and Hudson, 2016; Olszak, 2016; Teoh et al., 2014; Kiron et al., 2014). Still, studies

This research has been partially supported by the Croatian Science Foundation under the project
Business Process Management
PROSPER – Process and Business Intelligence for Business Performance (IP-2014-09-3729) and partially Journal
by the Slovenian Research Agency under the project Business Analytics and Business Models in Supply © Emerald Publishing Limited
1463-7154
Chains (grant no. J5-9329). DOI 10.1108/BPMJ-08-2019-0342
BPMJ by Audzeyeva and Hudson (2016); Popovi
c et al. (2012) and Jakli
c et al. (2018) show this
promise is only realized when the information provided by BI is readily used to improve
decision-making and, in turn, business processes, products, services, innovation and agility.
Accordingly, it is recognized that BI only plays the role of an enabler – facilitating the
organization’s making of better decisions based on the information (Larson and Chang, 2016).
BI therefore seems to have an indirect impact on OP.
Further, BI is often just one of many initiatives aimed at improving OP. Business process
management (BPM) is a well-known approach to improve OP by way of improved process
performance. The integration of BI into BPM initiatives seems natural since they both share
the same main goal. For example, the application of BI to manage cross-functional business
processes can increase the effectiveness of BI assets use. However, in practice, both concepts
are often implemented by different teams, with insufficient cooperation and thus unaligned
initiatives (Krause, 2003; Marjanovic, 2007; Williams, 2008; Dokhanchi and Nazemi, 2015).
Moreover, many organizations consider BI as primarily or exclusively an IT implementation
project and have yet to embrace the understanding of BI as a business initiative that is the
only one able to foster the business value (Lukman et al., 2011).
The alignment of a BI initiative and a BPM initiative (hereafter BI-BPM alignment) implies
they both “cooperate and contribute to the realization of firms’ goals” (Chadwick et al., 2015).
Individual elements of the BI-BPM alignment have been analyzed and referred to by many
researchers from both the BI and BPM fields (Zaby and Wilde, 2018). In particular, BI is
important for implementing process performance measurement (PPM) (Marjanovic, 2007),
regarding which information quality and communication are identified as critical success
factors (Blasini and Leist, 2013). Therefore, we wanted to further investigate the role of
BI-BPM alignment in achieving improved OP by implementing BI. We believe that proper
BI-BPM alignment is a way for BI to create a business value.
The remainder of the paper is structured as follows. The introduction is followed by a
literature review of BI, then BI-BPM alignment and its connection to OP is analyzed. Next,
research propositions are elaborated, the research methodology is presented and the research
instrument is described. The third part of the paper focuses on the data analysis by
employing a survey design and structural equation modeling, followed by a discussion of the
results and the conclusion.

2. Literature review and development of the research propositions

This section outlines a brief literature review of a research field and explains how the research
model was developed.

2.1 Business intelligence and organizational performance

Although the BI concept is not new, it is discussed differently by researchers, and thus,
various definitions can be found in the literature (Olszak and Ziemba, 2012; Olszak, 2016;
Lukman et al., 2011). This study understands BI as a managerial tool, encompassing the
collection of applications, technologies and processes deployed across companies to help
business users address challenges and opportunities, monitor OP and make better decisions
(Lonnqvist and Pirttimaki, 2006; Watson, 2009; Chen and Siau, 2012). BI systems support
decision-makers through internal and external data collection, analysis and reporting.
Different disciplines affect BI; some contribute to BI from a technical perspective, while others
are focused on the knowledge search and integration perspective (Ghaida, 2018).
The level of an organization’s BI implementation can be determined by considering BI
maturity. Generally, a maturity level represents an organization’s “capabilities as regards a
specific class of objects and application domain” (R€oglinger et al., 2012). Raber et al. (2013)
believe the benefits achieved from BI are significantly correlated with the BI maturity of an BI and OP:
organization. While the list of BI maturity models became quite long over time (Olszak, alignment with
2016; Pejic Bach et al., 2018), the models and their usage are quite similar. Most are general
BI maturity models that, regardless of organization size or industry type, serve as both a
BPM
tool for assessing the level of BI implementation and as a roadmap. Maturity models aim
to help practitioners successfully deploy BI initiatives within their organizations and
reach the desired state of maturity (Chuah and Wong, 2011; Brooks et al., 2015; Harison,
2012). Typically, 4–6 levels of maturity are recognized, and the assessment includes
certain key dimensions (e.g. IT, data integration and information quality, output quality,
measurement).
The analysis of the relatively large number of papers that review the existing BI maturity
models led to a list of the most commonly mentioned dimensions, namely, strategic alignment
and vision, management sponsorship and support, organizational culture, change
management, people skills, resources, technology and data quality (Brooks et al., 2015). On
the other hand, analysis of dimensions of the BI maturity model shows that topics like costs,
organizational structures, process orientation, staff and strategy are rarely addressed
(Lahrmann et al., 2010).
The BI maturity model proposed by Dinter (2012) is selected for this research’s purpose
since it encompasses organizational factors that are very important for the success of BI
initiatives (Pejic Bach et al., 2017, 2018). Dinter’s BI maturity model has a structure with three
dimensions (functionality, technology, organizational), which are then further divided into
categories with corresponding elements (i.e. design objects) (Dinter, 2012). The model’s power
lies in its ability to cover all relevant BI design issues and to allow a differentiated view of the
maturity level of BI solutions. The model’s organizational dimension includes aspects of
organization structure, processes, profitability and strategy, which refer to the alignment
with the organizational dimension of the BPM concept (Dinter, 2012).
Some research has examined the impact of BI maturity on OP. The study by Teoh et al.
(2014) examined the predictors and outcomes of BI system implementation for Malaysian
manufacturers, with the results showing that BI adoption is positively related to company
performance in both the financial and nonfinancial perspective. Other authors (e.g. Howson,
2008; Kiron et al., 2014) also made similar conclusions while taking other related factors into
account. Moreover, the findings of a study by Chen and Nath (2018) reveal that BI maturity
positively influences overall BI success but also shows that larger organizations have a
higher level of BI maturity and success than small and medium organizations. The results of
research by Pejic Bach et al. (2018) demonstrate that “top-performing” organizations are more
“BI mature” than lower performers, while some organizational culture characteristics
increase the BI maturity level.
Although we believe the impact of BI on OP is indirect and mediated by the BI-BPM
alignment, in order to test whether such impact is fully or partially mediated, a hypothesis is
suggested to test the direct impact of BI on OP.
H1. Business intelligence maturity positively influences OP.

2.2 The alignment of business intelligence and business process management and
organizational performance
BPM may be defined as a management approach for improving the performance of business
processes (Dumas et al., 2013; Hammer, 2015). While BPM is a holistic and multidimensional
concept, organizations most frequently rely on it “in order to achieve continuous process
improvement, such as better performance and conformance of their processes” (Malinova
et al., 2014). It is often described as a lifecycle entailing: process identification, discovery,
analysis, redesign, implementation and monitoring.
BPMJ Hinterhuber (1995) argues that business processes can only be managed if they can be
measured, yet Hammer and Champy (1993); Burlton (2001) and Hammer (2007b) suggest it is
important to focus the measurement on processes rather than organizational units. Empirical
research results show that process-centered organizational design positively impacts company
performance (McCormack and Johnson, 2001a; Skrinjar
et al., 2008a, b). Accordingly, many
studies in the area of BPM stress the need for PPM as an essential part of process monitoring so
as to assess the current process performance and improve it (Niven, 2002; Kuwaiti, 2004; Smart,
2009; Bosilj Vuk
sic et al., 2017).
According to Nenadal (2008), “PPM is the monitoring of agreed performance indicators to
identify whether a process meets planned targets.” Bosilj Vuk
sic et al. (2013) see PPM as a
very important link that connects BPM and BI but at the same time identify a need to examine
what enables this alignment. Bucher et al. (2009) argue in favor of applying BI within BPM,
explaining how BI can assist with the execution of the operational process. Moreover, a new
term – “process-centric business intelligence” – is defined as the capability of BI to transform
business-relevant data into analytic information for the purpose of generating new
knowledge for initiating relevant process changes (Bucher et al., 2009). Grossiele et al.
(2012) define a PPM system as an analytical information system that integrates a consistent
analysis-oriented database and the use of OLAP techniques.
Thus, BI is not only important to support decision-making within business processes but
also for improving business processes (Wanda and Satian, 2015). The results of an extensive
literature study by Zaby and Wilde (2018) reveal that the use of BI can assist in the creation of
new knowledge to support an optimized business process. Further, some case study analysis
shows that BI provides knowledge for certain business processes that can be utilized not only
to improve the process efficiency but can also be part of the exchange of knowledge among all
cross-functional business processes and between business departments (Olszak, 2016).
Garcia and Pinzon (2017) address (1) the well-defined business processes and business
models; (2) identified the key performance indicators (KPIs) and established the metrics
handled by the business process side; and (3) user-oriented change management as key
success factors while implementing BI. Moreover, Williams and Williams (2004) note that
“the business value of BI lies in its ability to improve the effectiveness of the core business
processes that drive business performance.”
Even though BI’s ability to contribute to an improved business process performance is a
strong motivator for adopting it (Ghaida, 2018), organizations still underestimate the capability
of BI to initiate efficient decisions for improving the business processes and business
performance (Olszak, 2016). BI is often seen as a “technical concept,” with little connection to
business processes (Marjanovic, 2007), while its strategic role is mainly overlooked (Dokhanchi
and Nazemi, 2015). BI projects are usually performed by IT departments and most often carried
out independently of corporate strategic and performance management projects (Krause 2003;
Williams, 2008). Further, the need to bring BI and BPM initiatives into alignment has been
studied by many researchers from both BI and BPM fields (Zaby and Wilde, 2018), yet most
authors only describe this concept implicitly and do not give a clear definition. The term “BI-
BPM alignment” is hence rarely found in literature, and studies usually focus on a narrow set of
that alignment’s elements. In the context of this research, BI-BPM alignment means the two
initiatives have an aligned methodology and are coordinated through official communication
between the BI and BPM teams. Moreover, it also indicates that BI systems support the
performance measurement and management of cross-functional processes.
One of the first to discuss different elements of BI-BPM alignment and its impact on OP
was Melchert et al. (2004) who recognized the convergence of BPM and BI, where they see the
role of BI as being an enabler of PPM. Smart et al. (2009) also claim that the PPM initiative
should be coordinated with the BI initiative within a company. Blasini and Leist (2013)
emphasize that information about process performance should be measured and made
visible. They also stress the importance of aligning the BI and BPM terminology. The role of BI and OP:
process owners, who should possess accurate information about the actual process alignment with
performance provided by BI systems based on continuously collected data, has been noted by
Hammer (2007a), Kohlbacher and Gruenwald (2011) and Kohlbacher and Reijers (2013). In
BPM
addition, Wieland et al. (2015) argue that control-effective integration of the process
performance results within the process structures should be ensured. Moreover, several
aspects of PPM are discussed in the studies carried out by Hammer (2007a) and Hammer
(2007b), including the importance of aligned BI and BPM terminology. These results are
further systematized and used in the design of the research instrument (Section 3).
As seen, the need to align the BI initiative with the BPM initiative has already been
discussed. Further, BPM could give BI a greater business value and thus propel its
implementation from the technical level to the business level. Much research has confirmed
BPM’s positive influence on OP (McCormack and Johnson, 2001b; Skrinjar
et al., 2008a, b;
Kohlbacher and Gruenwald, 2011; Hernaus et al., 2012). Since PPM is an essential part of
mature BPM (Cleven et al., 2010), it is therefore likely that the impact of BI maturity on OP is
mediated by the BI-BPM alignment.
Moreover, Jahantigh et al. (2019) developed a conceptual framework for BI critical success
factors, which comprises a number of indicators related to process integration, such as
standards for the documentation of organizational processes. Their research results indicate
that organizations which are more BI mature have also achieved a high level of process
integration standards. In addition, qualitative research by Olszak (2016) identified the
characteristics of organizations possessing higher levels of BI maturity. The results show
that organizations that are more BI mature are strongly oriented toward business processes.
They focus on (1) business processes standardization; (2) implementation of “fact-based”
BPM and (3) the adoption of a process-oriented culture, learning and the sharing of
knowledge. Therefore, organizations with higher BI maturity levels probably have their BI
more strongly aligned with their BPM.
The impact of BI-BPM alignment on OP is discussed by Ladeira et al. (2016) who explain
that both business process orientation and analytical capabilities affect OP. Similarly, Chen
and Nath (2018) suggest that the integration of business analytics into business processes can
lead to improvements in OP. Furthermore, Cao and Duan (2017) conclude that greater affinity
between the BI and organizational processes can increase the efficiency of data-driven
decision-making, thereby positively influencing OP. Hence, it is likely that the alignment of BI
and BPM positively affects OP.
For that reason, we formulate the mediating role of BI-BPM alignment in the
following way:
H2. The impact of BI maturity on OP is mediated by BI-BPM alignment.
We can refine that as follows:
H2a. BI maturity positively influences BI-BPM alignment.
H2b. BI-BPM alignment positively influences OP.
Figure 1 presents the resulting research model in which BI maturity determines the level of
an organization’s BI implementation, measured by a modified BI maturity model of Dinter
(2012), while OP is represented by dimensions proposed in Law and Ngai (2007), as
described below. In the presented research model, we theorize that BI maturity has a direct
impact on OP (H1) and an indirect one through BI-BPM alignment (H2), expecting to show
that the impact of BI maturity on OP is either fully or partially mediated by the BI-BPM
alignment, which may be described as the cooperation of BI and BPM in achieving
organization’s goals. With respect to the mentioned indirect impact, BI maturity affects the
BPMJ BI-BPM alignment (H2a), and the BI-BPM alignment then affects OP (H2b), as shown in
Figure 1.

3. Research methodology
This section describes the methodological approach taken in this study. After reviewing the
literature and designing the research model, we selected and adapted the appropriate
measurement instruments for the BI maturity and OP constructs (Dinter, 2012; Law and Ngai,
2007). We then developed the BI-BPM alignment construct and its scales following the
procedure suggested by MacKenzie et al. (2011). The data collection was followed by a data
analysis and interpretation of the results along with a discussion. The main research steps are
shown in Figure 2.
Below, we detail the sample used for this research as well as the research instrument and
statistical methods used to analyze the collected data.

3.1 Sample description

The data on which this research is based were collected in two neighboring countries – Croatia
and Slovenia, which were selected for the study due to their common history and similar

BI-BPM
Figure 1. ALIGNMENT
Research model of the
H2a H2b
impact of business
H2
intelligence maturity
and its alignment with
business process ORGANIZATIONAL
management on OP BI MATURITY
PERFORMANCE
H1

Literature review and conceptual research model development

Measurement instruments selection and adaption for BI maturity

and Organizational performance

BI-BPM construct and its scales development based on a literature

review and a series of in-depth semi-structured interviews

Primary data collection (survey)

Data analysis: validity and reliability analysis, assessment of model

fit, research proposition testing using ML-SEM

Figure 2.
Main research steps Results interpretation and discussion


characteristics, as was also the case in other studies (Skrinjar et al., 2008a, b; Hernaus et al., BI and OP:
2016). The data collection process had two phases. First, a pilot phase was carried out with the alignment with
aim to test the developed questionnaire in terms of the clarity of the questions and
questionnaire design. During this phase, a series of interviews was conducted, resulting in
BPM
minor questionnaire modifications. Next, during the main phase of the data gathering, from
March to December 2016 questionnaires were distributed to companies operating in Croatia
and Slovenia. An invitation to participate in the study was sent in a paper form and by
electronic mail to members of top management and/or the employees responsible for BI and
BPM within a company. The Croatian sample selection frame included the Register of Business
Entities that contained a total of 1,765 active medium-sized and large organizations, of which
invitations to participate were sent to 500 companies selected for a random sample relying on
the method of steps using a table of random numbers. The Slovenian sample selection frame
included the business directory bizi.si in which a total of 1,394 active medium-sized and large
companies are registered and were included in this research. At the end of the main data
gathering phase, a total of 101 responses had been gathered in Croatia (a response rate of
20.2%), while a total of 171 responses had been collected in Slovenia (a response rate of 12.27%).
The data were then further examined in order to detect any inconsistencies, outliers and
missing values, after which some responses were deleted from the database. Having in mind the
research propositions of this study, the final database consisted of a total of 185 responses.
Table I presents details of the sample profile. Out of 185 responses, 70 valid responses
(37.84%) were gathered in Croatia, while the rest (115 or 62.16%) were gathered in Slovenia.
For the purpose of this research, five sectors of the economy were considered, as described by
Gelo and Dru
zic (2015). In that sense, the minority of the companies (1.62%) come from the
primary sector, while the majority are from the secondary (37.30%) and tertiary (29.19%)
sectors. This roughly corresponds to the actual distribution of the number of companies by
industry sector in Croatia and Slovenia combined, i.e. 2%, 32%, 30%, 17 % and 19%,
respectively (Croatian Bureau of Statistics, 2019; Statistical Office of the Republic of Slovenia,

Sample characteristics
Company characteristics No. of companies Percentage

I. Industry sector
Primary 3 1.62%
Secondary 69 37.30%
Tertiary 54 29.19%
Quaternary 35 18.92%
Quinary 17 9.19%
no answer 7 3.78%
II. Employee number
<50 10.81%
50–249 87 47.03%
250–1000 49 26.49%
>1000 29 15.68%
III. Annual turnover amount
<10 million EUR 42 22.70%
10 million EUR–50 million EUR 69 37.30%
>50 million EUR 57 30.81%
no answer 17 9.19%
IV. Country Table I.
Croatia 70 37.84% Profile of the
Slovenia 115 62.16% responding companies
BPMJ 2019), making the sample suitable from this perspective. In terms of the number of employees,
the majority of the companies have between 50 and 249 employees (47.03%), whereas the
minority are small companies with less than 50 employees (10.81%). Observing the sample
from an annual turnover point of view, 37.30% of the companies had an annual turnover of
between EUR 10 and EUR 50 million, 30.81% had an annual turnover of more than EUR 50
million, while 22.70% had an annual turnover of less than EUR 10 million.

3.2 Research instrument

According to the findings of the literature review, the domain of the construct was specified
and the research instrument developed. Initially, the questionnaire used for this research was
developed as part of a research project. For the purpose of this study, three main parts of the
questionnaire are considered and further analyzed, namely, (1) BI maturity measurement;
(2) BI-BPM alignment measurement and (3) organizational PPM. Table II presents these
constructs along with their associated research indicators and the item descriptions.

ID Dimension Item/Statement A Item/Statement B

BI1 The scope of business BI is used in an isolated manner by BI is used in all (wherever needed)
intelligence systems individuals organizational units, hierarchical
use levels and application areas
BI2 The level of data Business data management is not Internal (both structured and
architecture maturity addressed in our organization. unstructured) and external data are
There are nonexisting or fully integrated, and requirements
heterogeneous semantics (e.g. data quality) are met
BI3 The impact of BI is not considered to have a Decision-making is based on BI and
business intelligence relevant impact BI is perceived as having a critical
impact on organizational
performance
BI4 The level of technical No dedicated BI storage is used Enterprise-wide data warehouse is
architecture maturity used
of BI
BI5 The level of data Data integration is manual Data integration is automated;
management maturity dedicated tools for data management
and integration are used
BI6 Type of BI tools used We do not use any specific BI tool; A broad range of BI tools and
within the manual analysis is performed techniques is used, such as reporting
organization tools, ad hoc analytics (OLAP), in-
memory analytics, planning, alerts,
forecasts, scorecards, mobile BI, data
mining, predictive analytics and
other advanced techniques of
analysis and visualization
BI7 The organizational There are no specifically defined A BI (business data analytics or
structure related to BI roles and organizational units for similar) competence center with a
BI. comprehensive spectrum of tasks
and competences exists
BI8 The level of maturity No explicit processes related to BI BI specific processes are defined and
of BI processes are defined actively managed
BI9 The level of the There is no profitability assessment A cross-project and benefit-oriented
profitability of BI. profitability assessment of BI takes
assessment of BI place
BI10 The level of BI No BI strategy exists in our A dedicated BI strategy exists and
Table II. strategy organization clearly reflects the business/IT
Dimensions of BI alignment
maturity Source(s): Dinter (2012)
3.3 BI maturity measurement BI and OP:
Due to the relatively broad focus of the initial research, an aggregated version of Dinter’s BI alignment with
maturity model (Dinter, 2012) was designed. It comprised ten items: (1) the scope of BI
systems use; (2) the level of data architecture maturity; (3) the relevance of BI for the
BPM
organization; (4) the level of technical architecture maturity; (5) the level of data management
maturity; (6) the type of BI tools used by the organization; (7) the organizational structure
related to BI; (8) the level of BI processes maturity; (9) the level of BI profitability assessment
and (10) the BI strategy. The initial research instrument for measuring BI maturity is
presented in Table II. For each stated item, there were two opposite statements – statement A
and statement B – one on each side of a 5-point Likert scale. Respondents were asked to state
the level of their agreement with either one statement or the other, noting that 1 means strong
agreement with statement A, while 5 means strong agreement with statement B. However, for
the purpose of this research, only seven items were taken into consideration. Indicators BI2,
BI3 and BI9 were excluded from the final model due to the poor loadings that were revealed
while performing reliability and validity checks. Following Henseler et al. (2009), items with
poor standardized loadings may be omitted if all reliability and validity measures in the final
model achieve a significant increase, which is the case in this study. Since this study’s
purpose is to examine the impact of BI on OP, which can only be realized with the effective use
of BI, it is appropriate to exclude those indicators that are used in other parts of the BI value
chain (Trieu, 2017). In particular, indicators BI3 and BI9 would already measure such an
impact, i.e. “the competitive process” (Trieu, 2017), in advance. Further, indicator BI2
measures “the BI conversion process” (Trieu, 2017), which results in BI assets and is therefore
merely an enabler for the BI-use process.

3.4 BI-BPM alignment measurement

To develop the BI-BPM alignment construct and its scales, we followed the procedure of
MacKenzie et al. (2011). We started with a conceptual definition of our constructs and then
developed, evaluated and refined the measurement items that represent the construct based
on the literature review findings and the interviews with a number of experts and finally, we
assessed the scale validity.
The construct for assessing BI-BPM alignment (PIA) was initially designed by
summarizing the aspects presented in the literature review. In particular, it was developed
based on aspects shared by organizations that introduce both BPM and BI (Smart et al., 2009;
Nieven, 2002; Krause, 2003; Kuwaiti, 2004; Hammer, 2007b; Marjanovic, 2007; Cleven, 2011;
Dokhanchi and Nazemi, 2015). The developed construct was additionally tested during the
pilot phase of the research through a series of in-depth semistructured interviews. During
these interviews, research groups and experts from various companies included in the pilot
phase of the research discussed questions regarding specific alignment indicators (e.g. their
importance, what is their current state, what are the gaps, what are the consequences, etc.).
Table III presents an overview of the key results of the interviews with experts from selected
companies during the pilot phase.
At the end of the pilot phase and after the initial questionnaire was refined according to
feedback from the experts during the interviews, the BI-BPM part of the questionnaire had
three statements comprising (1) the coordination of BI-BPM initiatives; (2) the usage of
common BI-BPM terminology and the communication of experts from both fields and (3) the
usage of BI systems for measuring the performance of cross-functional processes. For each
item, respondents were asked to state the level of their agreement on a 5-point Likert scale,
where 1 represented total disagreement with the statement and 5 total agreement with the
statement. The dimensions of the BI-BPM alignment and related sources are shown in
Table IV.
BPMJ Company Expert Key results

1 Provider of different waste Chief process officer (CPO) Business processes are well organized
treatment services, 400 and process ownership is established. BI
employees and BPM initiatives are organized in
separate departments; yet, they are
coordinated through intense
communication. BI is used by process
owners for process performance
measurement based on process-oriented
goals
2 Insurance company, 2,400 Head of the organizational BI and BPM initiatives are organized in
employees development, HR and BPM separate departments but are coordinated
department through intense communication, and their
terminology is aligned. Process
ownership is not established
3 Manufacturing company, Head of the strategy BI and BPM initiatives are organized in
2,000 employees development department separate departments; process ownership
is established only formally. Alignment
via the coordination of initiatives,
Table III. terminology and the usage of BI for
Main findings of the process performance measurement is
exploratory research important but not yet implemented

ID Dimension ITEM/STATEMENT Source

PIA1 BI and BPM coordination The BPM initiative is coordinated with the BI Melchert et al.
initiative in our company. Very intensive (2004)
communication between BPM and BI experts Marjanovic (2007)
and managers exists Smart et al. (2009)
Expert 1
Expert 2
Expert 3
PIA2 BI and BPM terminology The terminologies of BPM and BI are aligned. BI Hammer (2007a)
alignment and BPM use common terms; a glossary of Hammer (2007b)
BI-BPM terms exists Blasini and Leist
(2013)
Expert 2
Expert 3
PIA3 Usage of BI for process BI systems enable the performance Kohlbacher and
performance measurement and management of cross- Gruenwald (2011)
measurement functional processes Blasini and Leist
(2013)
Kohlbacher and
Reijers (2013)
Table IV. Wieland et al. (2015)
Dimensions of the BI- Expert 1
BPM alignment Expert 3

3.5 Organizational performance measurement

OP measurement was performed using the method of self-evaluation as described in Law and
Ngai (2007), whose work provides the basis for designing this part of the questionnaire. They
defined the relevant aspects based on previous research with the intention to capture not only
the financial aspects but also other nonfinancial dimensions. It comprised five statements BI and OP:
that evaluate the following: (1) level of customer satisfaction with products/services (“value alignment with
for money”); (2) customer retention rate; (3) sales growth rate; (4) profitability of the
organization and (5) competitive position of the organization. However, the first item, which
BPM
refers to the value for money dimension, was excluded from the final model due to poor
loading, as was also the case with three items from the BI maturity dimension. In this part of
the research instrument, respondents were asked to state the level of their agreement with
each statement on a 5-point Likert scale, with 1 denoting total disagreement and 5 total
agreement with the statement. The dimensions of OP are shown in Table V.

3.6 Statistical methods

Various statistical methods were used in the statistical analysis of the collected data. First,
discriminant validity and reliability analyses were performed using factor analysis, as well as
Cronbach alpha coefficients. Next, the primary data analysis was conducted in terms of
descriptive statistics, and the correlation coefficients were calculated. Finally, an assessment
of the model fit and testing of the research propositions were conducted using the method of
modeling structural equations relying on LISREL software and maximum likelihood
estimation method.

4. Data analysis and research findings

This section of the paper summarizes the data analysis process and the research findings.

4.1 Validity and reliability analysis

The data analysis process started with discriminant validity and reliability analyses. A factor
analysis was performed for the purpose of the validity analysis. The goal of the exploratory
factor analysis that was performed was to investigate whether the individual items were
similar enough to fit into the same construct, i.e. factor, or, in other words, whether they
adequately measure the constructs previously described in the research instrument
descriptions. At the same time, exploratory factor analysis checked whether the constructs
used are different from each other. Table VI presents a rotated factor matrix for three factors.
As seen in Table VI, items BI2, BI3, BI9 and OP1 were omitted from the final model due to
weak loadings, as previously explained. The presented rotated matrix is based on items
comprising BI, BI-BPM alignment (PIA) and OP research instrument items.
Table VII presents the completely standardized factor loadings along with their t-values
and R-squares for the items comprising the BI, BI-BPM alignment (PIA) and OP research
instrument. According to Hair et al. (2006), standardized factor loadings should be above a

ID Dimension Item/statement

OP1 Value for money Our customers perceive our products and services as the best in our
industry
OP2 Customer retention rate Our customer retention rate is high above the average of the industry
OP3 Sales growth rate Our sales growth rate is high above the average of the industry
OP4 Profitability of the The profitability of our company is high above the average of the
company industry Table V.
OP5 Overall competitive Our overall competitive position is high above the average of the Dimensions of
position industry organizational
Source(s): Law and Ngai (2007) performance
BPMJ Factor
Item 1 2 3

BI-1 0.522
BI-4 0.595
BI-5 0.726
BI-6 0.676
BI-7 0.618
BI-8 0.699
BI-10 0.533
PIA-1 0.850
PIA-2 0.859
PIA-3 0.867
OP-2 0.761
Table VI. OP-3 0.853
Rotated factor matrix OP-4 0.821
for three factors OP-5 0.869

Item Completely standardized factor loading t-values R-square Cronbach’s alpha

BI-1 0.952 11.806 0.571 0.782

BI-4 0.864 10.637 0.491
BI-5 0.814 11.323 0.538
BI-6 1.010 13.147 0.661
BI-7 1.016 12.841 0.641
BI-8 0.930 14.046 0.719
BI-10 1.047 13.755 0.701
PIA-1 1.037 –a 0.765 0.887
PIA-2 0.933 13.427 0.661
PIA-3 1.021 14.621 0.747
OP-2 0.551 –a 0.420 0.876
Table VII.
Completely OP-3 0.837 9.352 0.698
standardized factor OP-4 0.851 9.372 0.702
loadings, t-values and OP-5 0.873 9.613 0.762
R-squares Note(s): aIndicates a fixed parameter in the original solution

cut-off value of 0.5, with t-values above 1.96. As shown in Table VII, all calculated
standardized factor loadings are above the cutoff value of 0.5 and all t-values exceed 1.96,
which confirms the validity.
Table VII also presents the Cronbach alpha coefficients calculated for the three constructs
under observation. As stated in Feldt and Kim (2008), the recommended cutoff value of
Cronbach’s alpha coefficient should be 0.70 or higher. Therefore, as Table VII shows, all
calculated Cronbach alpha coefficients for the observed constructs are above the
recommended cutoff value of 0.70. It may therefore be concluded that the reliability is also
confirmed.

4.2 Primary data analysis

The primary data analysis started with descriptive statistics. Means and standard deviations
were calculated. Next, correlation coefficients were calculated for all items of the research
instrument used in the model for this study’s purpose. Table VIII presents the results for the
descriptive statistics and correlation coefficients.
 Mean σ BI-1 BI-4 BI-5 BI-6 BI-7 BI-8 BI-10 PIA-1 PIA-2 PIA-3 OP-2 OP-3 OP-4 OP-5

BI-1 4.29 0.814 1

BI-4 4.04 0.877 0.356** 1
BI-5 3.57 0.998 0.332** 0.251** 1
BI-6 3.63 1.066 0.312** 0.308** 0.493** 1
BI-7 4.01 0.866 0.212** 0.336** 0.351** 0.328** 1
BI-8 3.70 1.040 0.212** 0.265** 0.461** 0.549** 0.390** 1
BI-10 3.64 0.957 0.286** 0.271** 0.346** 0.316** 0.339** 0.344** 1
PIA-1 2.96 1.083 0.353** 0.225** 0.390** 0.457** 0.325** 0.403** 0.337** 1
PIA-2 3.43 1.056 0.306** 0.215** 0.308** 0.465** 0.298** 0.341** 0.334** 0.553** 1
PIA-3 3.06 1.286 0.254** 0.171* 0.333** 0.401** 0.243** 0.282** 0.304** 0.572** 0.549** 1
OP-2 3.87 0.850 0.384** 0.241** 0.120 0.132 0.187* 00.091 0.290** 0.325** 0.207** 0.211** 1
OP-3 3.30 1.002 0.275** 0.208** 0.144 0.277** 0.209** 0.196** 0.344** 0.333** 0.280** 0.345** 0.614** 1
OP-4 3.29 1.016 0.209** 0.151* 0.186* 0.225** 0.194** 0.211** 0.201** 0.313** 0.270** 0.390** 0.471** 0.696** 1
OP-5 3.46 1.000 0.270** 0.225** 0.102 0.265** 0.220** 0.199** 0.220** 0.390** 0.346** 0.342** 0.564** 0.708** 0.756** 1
Note(s): * <0.05; **p-value <0.01
BPM
alignment with
BI and OP:

Descriptive statistics
Table VIII.

and correlation
coefficients
BPMJ As may be seen in Table VIII, within the BI group of research indicators, the BI-1 research
indicator has the highest mean of 4.29 with a standard deviation of 0.814, measuring the scope
of BI systems usage within an organization. The lowest mean of 3.57 with a standard
deviation of 0.998 was noted for the BI-5 research indicator that measures an organization’s
level of data management maturity. Within the BI-BPM alignment group of research
indicators, the highest mean of 3.43 with a standard deviation of 1.056 was noted for the PIA-2
item, measuring the alignment of the BPM and BI terminology as well as the existence of a
glossary of BPM and BI terms. In contrast, the lowest mean of 2.96 with a standard deviation
of 1.083 was measured for the PIA-1 item referring to the coordination between BI and BPM
initiatives. Finally, for the OP items, the highest mean of 3.87 with a standard deviation of
0.850 was measured for the OP-2 research indicator, referring to the customer retention rate,
while the lowest one (mean of 3.29 with a standard deviation of 1.016) was calculated for OP-4,
measuring the organization’s profitability.

4.3 Assessment of the model fit

The assessment of the model fit was performed by calculating fitness indicators. For the
purpose of assessing the model fit, chi-square, degrees of freedom and p-value were
calculated, along with a goodness-of-fit index (GFI), adjusted goodness-of-fit index (AGFI),
normed fit index (NFI), non–normed-fit index (NNFI), comparative fit index (CFI), root mean
square error of approximation (RMSEA) and 90% confidence interval of RMSEA. The
complete list of fit indices, their estimations and explanations for the research model
presented herein is given in Table IX.
When considering the recommendations for assessing the model fit (Hooper et al., 2008)
and the calculated values of the fit indices for the presented model, as shown in Table IX, it
may be concluded that the model is a good fit.

4.4 Testing the research propositions

To test the research propositions, the method of modeling structural equations was employed
using LISREL software. As proposed by Nunnally (1967) and later widely accepted, the rule of
thumb in setting a lower bound of an adequate sample size for conducting a structural
equation modeling analysis is 10 observations per indicator variable. In our case, we have a
sample size of 185 companies, which corresponds to the mentioned rule of thumb since there
are 14 observed variable indicators, which makes a minimum size sample of 140 observations.
Moreover, the minimum sample size for structural equation modeling, as stated by Tinsley
and Tinsley (1987); Ding et al. (1995); Tabachnick and Fidell (2001), and Sudigdo et al. (2019), is

Fitness indicator Model estimated Explanations

Chi-square (χ )
2
153.175 χ 2 is not significant
Degrees of freedom (df) 74
p-value 0.000
χ 2/df 2.070 Very good, close to 2.0
GFI 0.833 Good, close to 0.9
AGFI 0.834 Good, close to 0.9
NFI 0.914 Good, close to 0.9
NNFI 0.943 Very good result
Table IX. CFI 0.953 Very good result
Fit indices for the RMSEA 0.076 Good, close to 0.08
research model 90% confidence interval of RMSEA (0.059–0.093) Upper limit <0.10, a good result
between 100 and 150, meaning we may conclude that our sample size of 185 is adequate. The BI and OP:
result of the research proposition testing is presented in Figure 3, showing the path diagram alignment with
along with the path coefficient estimates and their significance levels.
As Figure 3 reveals, the direct influence of BI maturity on OP is positive (0.106) yet not
BPM
statistically significant. On the other hand, the influence of BI maturity on BI-BPM alignment
is also positive (0.731) and statistically significant at a 1% level of significance. Next, BI-BPM
alignment positively influences (0.284) the OP at a 5% level of significance. It may therefore
be concluded that BI maturity positively influences OP through BI-BPM alignment but not
directly.
To summarize, the data analysis and the presented results provide grounds for accepting
or rejecting the hypotheses of this study. It may be concluded that the first hypothesis (H1),
stating that business intelligence maturity positively influences OP is rejected since the
influence was revealed to be positive, but not statistically significant. Next, the second
hypothesis (H2) was refined by way of two hypotheses: H2a indicating that BI maturity
positively influences BI-BPM alignment, and H2b indicating that BI-BPM alignment positively
influences OP. The presented results confirmed both of these hypotheses. Therefore, it may be
concluded that this research supports the second hypothesis (H2), namely that the impact of
BI maturity on OP is mediated by BI-BPM alignment.

5. Discussion and conclusion

The results show that the impact of BI maturity on OP is indirect and fully mediated by BI-
BPM alignment because hypothesis H2 is confirmed but H1 is not. This finding holds
important theoretical and practical implications.
First, we developed and validated the construct of BI-BPM alignment utilized in the study.
Although some dimensions of alignment between BI and BPM initiatives have already been
discussed in the literature (Melchert et al., 2004; Hammer, 2007a, b; Marjanovic, 2007; Smart
et al., 2009; Kohlbacher and Gruenwald, 2011; Blasini and Leist, 2013; Kohlbacher and Reijers,

Figure 3.
Path diagram with
path coefficient
estimates and their
significance levels
BPMJ 2013; Wieland et al., 2015), none of those papers considered all of the dimensions of the
alignment and its role as a mediator between BI maturity and OP. The BI-BPM alignment
construct that was developed builds on the mentioned research findings that stress the
importance of different elements while aligning the two initiatives. It has three dimensions:
coordination of BI and BPM initiatives, alignment of the BI and BPM terminology and the use
of BI to measure the process performance. The construct may also be used in future research.
Further, this study has also attempted to answer the question of how BI maturity affects
OP (Audzeyeva and Hudson, 2016; Popovi
c et al., 2012; Jakli
c et al., 2018). The influence of BI
on OP is usually analyzed through the BI value chain (Trieu, 2017), which represents the
process of deriving value from information and information from data (Larson and Chang,
2016). Within the value chain, the crucial or necessary condition is business improvement or
BI impacts, for which the effective use of high-quality information generated in BI processes
is a prerequisite (Popovi
c et al., 2012; Trieu, 2017). Only decisions and actions provide
business value, and hence, BI may be understood as an enabler, which makes it difficult to
directly prove its business benefits (Larson and Chang, 2016).
Joint operations and the coordination of the two areas of BPM and BI can lead to BI being
used for business process measurement and management. The improved operational
efficiency of processes, such as higher staff productivity and lower operational costs, is
recognized as one of the most vital potential BI impacts (Trieu, 2017; Popovi
c et al., 2012;
Elbashir et al., 2008). In turn, business process improvements will usually translate into OP
improvements. A significant relationship between business process performance and OP has
been confirmed (Elbashir et al., 2008). Moreover, the use of BI can yield new products and
services, in turn new processes with additional value.
BI-BPM alignment is not simply about the more effective use of the information generated
in BI processes for the purposes of BPM. Instead, it can also assist in other parts of the BI
value chain. The primary goal of BI is to provide high quality – in the broadest sense –
information that supports smart decision-making. Researchers in this area generally agree
that relevance, as a dimension of information quality, is particularly emphasized in the BI
context (Grublje
si
c and Jakli
c, 2015a). Adequate relevance adds to its acceptance and the use
of information generated in the BI conversion-and-use processes (Popovi
c et al., 2012).
Therefore, as regards BI’s impact on OP, it may be considered to be very important. The
problem of providing relevant information stems from the low structuredness of processes in
which BI is chiefly used (i.e. management processes), making it difficult to identify
information needs (Grublje
si
c and Jakli
c, 2015b). This problem is especially apparent if the
focus of the BI initiative is on technology (Marjanovic, 2007).
Therefore, BPM can provide a framework for understanding which information is
relevant for business improvement. Both BI and BPM share the same main goal of an
improved OP, but their starting points are different. For BI initiatives, it is information
technology, which is the starting point, and business opportunities are found afterward. Yet,
for BPM initiatives, the starting point is the improvement of the business processes.
Measurement and monitoring are crucial for improving business processes and require
adequate, i.e. relevant information. In particular, the alignment of the initiatives can
importantly contribute and further impact the OP (Elbashir et al., 2008). This can be achieved
if the BPM is strategically oriented and the measurement system of (especially key) business
processes is appropriately defined, i.e. when key performance indicators have been properly
identified (Popovi
c et al., 2012). From the aspect of the BI value chain, BI-BPM alignment can
therefore also add to the quality of BI assets and is therefore again the path to ensure that the
BI holds greater value.
Our findings also hold implications for practice. Since integrated and aligned BI and BPM
initiatives lead to better OP, the results could encourage the managers of these two areas to
improve their coordination. Moreover, our findings might encourage managers to give the BI
initiative a more strategic role, an aspect which is currently largely overlooked (Dokhanchi BI and OP:
and Nazemi, 2015). Like its strategic role, BI’s capability to trigger efficient decisions to alignment with
improve business processes is also underestimated (Olszak, 2016). Besides, the results might
encourage BI teams to rely more on collaboration with BPM teams during the process of
BPM
identifying the information needs.
The findings from the BI-BPM alignment construct development process can also be used
for better understanding and bridging the gap between theory and practice. Business process
management and organizational factors in general have long been recognized as an
important success factor in the implementation and use of BI systems (Popovi
c et al., 2012;
Grublje
si
c and Jakli
c, 2015a). The main reason for the frequently observed low level of
alignment in practice is probably the fact that, as a rule, the development of BI systems starts
principally as a technological initiative, while BPM is understood and implemented as a
business (management) initiative. Thus, the gap between theory and practice in this field is
merely a manifestation of the gap between the governance of IT and the rest of the business
(Peppard and Ward, 1999; Peppard, 2001; Luftman, 2003). Therefore, it can be bridged by
giving IT a more business and strategic role and by understanding that BI system
development is primarily a business-focused and not IT-focused project. On the other hand,
the gap could be narrowed by achieving a higher level of BPM maturity, especially in the
direction of PPM. When BPM remains at the level of process modeling, i.e. at the operational
level (McCormack et al., 2009; Hammer, 2007a; Kohlbacher and Gruenwald, 2011), project
groups have no power to bring about the alignment. Further, in this matter, a more developed


understanding of IT capabilities on the business side is required (Indihar Stemberger et al.,


2011; Manfreda and Indihar Stemberger, 2018). In conclusion, we may state that to narrow the
gap between theory and practice, above all, education and awareness are needed on both the
business and IT sides. The digital transformation movement is also bringing changes in this
area since we are already realizing that management is increasingly involved in IT and better
understands its role in business (Krotov, 2015; Dumeresque, 2014; Peppard, 2018), such that
we can also expect improvements in BI-BPM alignment.
While these findings provide valid and generalizable results about the mediating role of
BI-BPM alignment, they are accompanied by some limitations that provide a good basis for
future research. The questionnaire was answered by one representative who answered on
behalf of the entire organization. Although this approach to data collection is common, there
is a risk of biased perceptions. It might therefore be interesting to repeat the study by
including more than one respondent from each organization.

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Corresponding author
Dalia Su
sa Vugec can be contacted at: [email protected]

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