Electronic Government, An International Journal, Vol. 5, No.

1, 2008 31

Business and e-government intelligence for

strategically leveraging information retrieval

Alan D. Smith
Department of Management and Marketing,
Robert Morris University,
600th Fifth Ave.,
Pittsburgh, PA 15219-3099, USA
Fax: (412) 262-8494
E-mail: smitha@rmu.edu

Abstract: The purpose of this paper is to provide practitioners of information

exploration of the need for Business and e-Government Intelligence Systems
(BGIS), the role such intelligence plays in competitive market research,
industry, through the comparison of vendors, advantages and disadvantages,
comparing the costs and benefits and some future insights. A review of the
applied literature on topics that focus is on utilising Business Intelligence (BI)
as a competitive tool in an online retrieval environment. The growth for BI
systems may be dramatic [actual (2004, $5.3 billion; 2004, $5.6 billion) and
predicted growth (2005, $6 billion; 2006, $6.5 billion; 2007, $7 billion and in
2008, $7.3 billion)], its associated costs may be equally stunning, especially
in end-user query, reporting, analysis, data-mining applications and packaged
data mart and/or warehousing applications. However, the figures reported in
the paper should support the notion that BGIS-related systems’ applications
are potentially a good investment and worthy of considerable research in the
knowledge management fields.

Keywords: business intelligence; e-government intelligence; competitive

advantage; e-e-government; information systems; strategy.

Reference to this paper should be made as follows: Smith, A.D. (2008)

‘Business and e-government intelligence for strategically leveraging
information retrieval’, Electronic Government, An International Journal,
Vol. 5, No. 1, pp.31–44.

Biographical notes: Alan D. Smith is presently a University Professor of

Operations Management at Robert Morris University, located in Pittsburgh,
PA. Previously he was the Chair of the Department of Quantitative and
Natural Sciences and Coordinator of Engineering Programmes at the same
institution, as well as an Associate Professor of Business Administration
at Eastern Kentucky University. He holds concurrent PhD in Engineering
Systems/Education from The University of Akron and in Business
Administration from Kent State University. He is the author of numerous
articles and book chapters.

Copyright © 2008 Inderscience Enterprises Ltd.

32 A.D. Smith

1 Introduction

1.1 Business and e-government intelligence systems

Business and e-Government Intelligence Systems (BGIS) come in many different shapes
and sizes. BGIS are designed to combine data gathering, data storage and knowledge
management with analytical tools to present complex internal and competitive
information to planners and decision makers (Negash, 2004). There are numerous types
of BGIS, each with its own purpose (Smith, 2002, 2004, 2005a, b, c, 2007; Smith and
Lias, 2005). This paper is basically structured around the need for BGIS, the role
such systems play in competitive market research, BGIS in industry and Electronic
Government (e-government), comparing vendors of BGIS, advantages and disadvantages
of a BGIS, compare the costs and benefits of utilising a BGIS, and finally, some insight
to the future of such systems. Throughout the discussion of all of those topics, the focus
is on utilising BGIS as a competitive tool in an online retrieval environment.
In business, as in any competitive environment, a basic tenet is to know your
customers and your service providers. This competitive knowledge may be gained
through the gathering and analysis of intelligence (Elrom, 2005; Smith and Clark, 2005).
Collecting and analysing data on your customers, your competitors, as well as your own
company, is imperative to succeeding in a competitive market. Providing information
flows and access in a timely fashion can be the difference between success and failure.
According to Fickenscher (2005), the quality service cost triad has driven industries to
adopt new methods for deriving BGIS from massive stores of available data. BGIS
has become somewhat of an amalgamation of numerous other data collection and
analysing tools: data mining, data warehousing, knowledge management, score-carding,
dash-boarding, and data visualisation, Online Data Processing (OLAP), Customer
Relationship Management (CRM), Decision Support Systems (DSS), Management
Information Systems (MIS), Executive Information Systems (EIS), Geographic
Information Systems (GIS), as well as many others. Although each of these data
collection devices and systems is important to a company, perhaps the value comes from
translating the stored data into intelligence and then applying it in order to develop a
customer-based strategy.
Levinson (2005) states that users of information should first analyse the way they
make decisions and then consider the information that executives need to facilitate
more confident and rapid decision-making processes, as well as how they would prefer
that information presented to them (e.g. as a report, a chart, online, hardcopy). In essence,
types of decision-making processes will drive what information these companies
and e-governmental agencies will need to collect, analyse and publish in their
BGIS. According to Elrom (2005), a possible BGIS definition may include what the
characteristics a system does, such as allowing businesses to capture, transform, analyse
and flow information from disparate systems and sources into a pool of knowledge that is
then shaped into an easy-to-digest format. This step provides batches of filtered
information that can be used by the decision makers. Most views on BGIS coincided with
each other, the system is designed to collect data and put it into an easy-to-analyse form.
King (2005) suggested that BGIS has little to do with technology and far more to do with
the intimate understanding of business processes. This means that even if BGIS were in
place, users must be able to understand how to interpret the information and utilise it to
their company’s benefit.
 Business and e-government intelligence 33

2 Discussion of the role of BGIS and completive information

2.1 Market research initiatives

Arthur Nielsen is frequently acknowledged as the pioneer in the field of marketing
research as a statistical science with the founding of the A.C. Nielsen Company in 1923.
BGIS, which include modules for marketing research, have become more and more
critical in collecting marketing research information and in the use of marketing research
results. Marketing research is a form of business research or applied sociology, which
concentrates on understanding behaviours and preferences of consumers in a market-
based economy. The major types of business-based research that are used in business
competitive intelligence and decision-making include market research, product research
and advertising research. Applications of BGIS can aid in all of these e-business and
e-e-government research models.
Product research looks at what products can currently be produced, and what new
product innovations can be developed. Advertising research attempts to assess the likely
impact of an advertising campaign and measure the success of a campaign. Market
research examines all aspects of a business environment. It examines its competitors,
market structure, e-e-government regulations, economic trends, technological advances,
and performs financial analyses on companies and e-governmental agencies, industries,
or sectors. There are many marketing research techniques used today.
Each of the various forms of marketing research can be classified as either problem-
identification research or problem-solving research. In general, BGIS can be used for
both identifying a problem as well as solving a problem. In order to identify or solve a
problem, there are several types of research designs that are generally used (qualitative,
quantitative, observational and experimental designs). Researchers often use more than
one research design when trying to identify or solve a problem. According to Raab
(2004), there are a wide variety of statistics available, including advertising budgets,
audience figures, market shares, research reports, survey results, and sales by product,
region and time period. However, these statistics are largely descriptive. In that they tell
what happened, but not why. What really matters in competitive marketing and other
business ventures is the insight that leads to a desirable product, an effective advertising
campaign, or a superior CRM strategy. BGIS can provide the insight needed in such
business ventures, where knowledge-gathering systems are critical for competitive
success.
As mentioned above, an excellent example of how BGIS can be used in marketing
research may be found in the application of GIS. Many companies and e-governmental
agencies have used GIS to determine which ZIP codes to target in a mailing, which sites
to pick for new stores, and how to plan delivery routes. Currently, advanced practitioners
are integrating GIS with mainstream transaction-processing applications and databases by
incorporating location data in their BGIS analytics. Some companies and e-governmental
agencies are finding unique uses of geographic information made possible by combining
the advantages of BGIS and GIS. As found by Anthes (2005), many users find valuable
applications when they extend their data mining to the unstructured information, which
generally makes up 80% of all corporate data containing geographic information. In
Table 1, a summary is presented concerning GIS typical users, how the system works,
and how much it costs for each market segment listed:
34 A.D. Smith

Table 1 Summary of GIS market segment information

Market segment: Market segment: Market segment: Market segment:

low end midrange mixed mode high end
Typical users: Mom- Typical users: Typical users: Typical users: Large
and-pop businesses, Analysts in the National companies retail chains, oil
real-estate brokers, regional marketing and e-e-governmental companies and
insurance agents or or real estate agencies with both e-e-governmental
regional companies departments of GIS analysts and users agencies, utilities,
and e-e-governmental nationwide retailers without GIS or IT insurance companies
agencies that serve or hospitality, experience and e-governmental
only a small grocery, insurance, agencies
geographic area banking or real estate
companies and
e-e-governmental
agencies
Basic method of Basic method of Basic method of Basic method of
operation: ‘Pay by operation: User has operation: End users operation: Same as
report’, web-based desktop GIS software do their own simple mixed mode but
subscription service. for analysing sales, GIS queries but go to includes significant
User enters a location profiling customers, experts for heavy-duty customisation and
(possible store planning marketing GIS analytics. The integration with
website, for example) campaigns or experts have their own other business
and gets back selecting sites desktop GIS software, systems, data
demographic, while other users have warehouses and
economic, spending, an internally hosted or analytic tools for
and other information vendor-hosted web BI. GIS is part of
for that website service mainstream business
processes
Typical cost: Service Typical cost: GIS Typical cost: Cost Typical cost: Users
is $40 to $75 per software costs $1500 varies depending on make a one-time
report or $925 to to $3500 for a user. capability and data, investment in the
$2500 per year Basic nationwide GIS from tens of hundreds of
data ranges from thousands to hundreds thousands of dollars
$20,000 to $60,000 of thousands of
dollars per year
Source: Partially adapted and condensed from Anthes (2005)
GIS may not be able to be utilised for all potential customers through BGIS. Hall (2005)
suggested that BGIS experts may be analysing are simply transients. In essence,
transients may be considered potential customers who glide by retail outlets from time to
time but should not be factored into traditional demographic data. Unfortunately, they
comprise a significant volume of business in many instances, especially when such stores
are conveniently located near interstate highways and major thoroughfares. As Fordham
et al. (2003) pointed out, companies and e-governmental agencies possessing data for
CRM strategies are usually financial organisations, including credit card companies
and e-governmental agencies, supermarket chains with most-valued-customer card
programmes, airlines and hotels with frequent-user programmes, car rental companies
and e-governmental agencies, telephone and telecommunication organisations, and
catalogue companies and e-governmental agencies. Through the proper acquisition and
leveraging of this data, buying patterns can trigger an unsolicited sale call or produce
streams of coupons at the supermarket checkout counter. In addition, a check issued by a
credit card company can produce a wave of new blank checks from the original company,
 Business and e-government intelligence 35

and its competitors, as well as triggering personal telephone calls with additional credit
products being offered. It is becoming more and more apparent that companies and
e-governmental agencies are using their BGIS in their competitive and aggressive
marketing strategies to gain increase customer base. They are able to focus their
marketing budget on what is believed to be the most profitable target segments.

2.2 BGIS-related applications

The use of BGIS-related systems can be observed in just about every facet of every
industry as well as many e-governmental agencies that must analyse mountains of
uncensored data for data-mining applications. Many companies and e-governmental
agencies are even creating what are being called ‘centres of excellence’ or ‘competency
centres’. According to Whiting (2004), characteristics of competency centres include
usually staffed with people who have a variety of technical, business and data-analysis
expertise, and eventually become a repository of business intelligence (BI) related skills,
best practices and application standards. Whiting estimated that about 10% of the
2000 largest companies and e-governmental agencies in the world have some form of
BI-related competency centre. Table 2 illustrates a few of the benefits of having a
competency centre in an organisation.
As stated above, BGIS-related applications are already mainstreamed in their core
competencies in many industries and governmental applications in the USA. BGIS-
related applications are being utilised in telecommunications, casinos, airlines, banks,
grocery stores, retailers, restaurants, healthcare and pharmaceuticals. The following text
brief outlines a few examples of how BGIS-related applications may be used and the
benefits they provide.
Table 2 Selected benefits of a BGIS-related core competency centre

BGIS-related core competency centre

Centralisation – provides a central location for resources as business-intelligence application
become strategic
Investment – improves return on investment of business-intelligence technologies by creating
best practices and standard methodologies
Strategy – aligns business-intelligence technologies with business objectives
Communication – eliminates barriers to sharing information and intelligence among business
units
Source: Adapted and condensed from Whiting (2004)

2.2.1 Pharmaceuticals and healthcare

Pharmaceutical, biotech and clinical research sectors are some of the emerging economic
sectors driving up BGIS-related applications in business and government, especially with
the many examples of IT outsourcing to India and China. Companies and e-governmental
agencies look to BI-related applications and their solutions to take timely, informed
decisions and cut the product time to market. In an example found by Madhumathi
(2005), with approximately 33 drug products set to lose U.S. patent coverage in the next
two years, this would open a $45-billion generics market, further pushing the need for
intelligent research and market forecasts. Healthcare providers are now beginning to
36 A.D. Smith

recognise the value of data mining as a tool to analyse patient care and clinical outcomes,
namely as providers that deploy advanced clinical data systems, more granular, primary
data is becoming available for analysis. Rather than accepting the physician’s
interpretation of data through the use of diagnostic codes or extrapolated financial codes
(Fickenscher, 2005), providers will, for the first time, be able to objectively analyse the
actual impact of one variable on another.

2.2.2 Casinos
Another current trend underlying the importance of BI-related applications is Betdirect,
the betting subsidiary of Littlewoods (Littlewoods’ Bet Direct online available at
www.betdirect.net/). The management at Betdirect has been using analysis software to
segment its customer base by the type of casino type wager or bet, the frequency and the
spread, and based its marketing on the results. As noted by Manchester (2003), response
to marketing campaigns has risen from 15% to 60%. Harrah’s software (Anderson and
Vincze, 2004) identifies the most likely big spenders by starting with just four bits of
information: gender, age, where they live and what they play. Appropriate marketing
strategies are then designed for the big spenders – usually implemented through direct
mail in order to maximise every customer relationship.

2.2.3 Telecommunications and banking

From customer call data, a mobile telephone company finds that some customers make
calls near airports, separated by several days. Clearly, the customers have gone abroad
and are unaware that they can still use their telephone. Telecommunication companies
and e-governmental agencies may send their customers a gentle reminder that they can
use their phone while travelling; and may also generate an increase in call activity
(Smith, 2007). A bank promoting a new loan package examines customer-spending
patterns and identifies those who are most likely to be attracted to the product. It focuses
its marketing campaign on these prospects and can keep costs down. Advances in
information technology (IT) now give businesses the ability to isolate specific types of
customer with a need and tailor their product marketing strategy accordingly. Not only
can they concentrate their marketing effort, according to Manchester (2003), where it is
most likely to give the best yield, businesses can also save by reducing print and
distribution costs.

2.2.4 Airlines
At Delta Technology, a subsidiary of Delta Air Lines, employees apply BI-related
software to graph, sort and compare data that arrive from reservation agents, unit
managers, flight crews and even marketing departments. Digesting the variables of route
structure, time and passenger loads require sophisticated IT operations. What the airlines
do routinely to keep their fuel costs below the average or standard costs clearly
demonstrates how densely technology can be woven into complex business decisions.
Delta, for example, has four development squads assigned to the airline’s business
units, namely revenue, customer, airline operations and corporate management systems.
They use the same BGIS-related approach for each (Fox, 2002). As can be seen by the
examples listed above, BGIS-related applications can be used for a myriad of functions in
countless industries.
 Business and e-government intelligence 37

2.3 Vendors of BGIS

According to Wu (2004), there is still not one dominant product BGIS-related suite in the
marketplace. This has left customers with numerous options. The trend toward
standardising on several of BGIS tools is also contributing to market consolidation. BGIS
vendors are trying to pack as much functionality into their product suites as possible, in
hopes of being chosen as the standard by their potential customers. The following is a list
of the some of the most predominant vendors that provide BI-related services: Actuate,
Alphablox, Business Objects, Capgemini, Cognos, Cyberscience, Information Builders,
WebFOCUS, iWay Software, Hyperion Solutions Corporations, MaxQ Technologies,
Microsoft, MicroStrategy, Panorama, ProClarity, Siebel Systems, SAP BW, SAS
Institute, Saksoft, and Synola Ltd. Table 3 displays the 2003 worldwide leaders (by new
license revenue) in the market for relation database management systems as researched
by Hall (2004).
In a survey done by Burns (2004) for CA magazine, 11 of the leading BGIS providers
were compared. The survey included responses to question concerning the providers
about their systems. The survey contained questions that asked about their target market,
their technology (which database programs were supported and how to access the
information), report-writers, features (such as analytic functionality, calculations, data
extraction and transformation tools, and formatting) and password security levels, what
the system transfers data to, as well as related information. Although the results of the
survey did not conclusively determine which BGIS is the best, it did provide evidence
that it is probable that depending on a company’s system requirements, any one of the
systems analysed in the survey could be the right one for that company.
As with any product, choosing the correct BGIS depends on the customer’s needs. As
noted by Thomas (2004) in reflecting on the company’s use of SAS software, it was
determined that the software’s use will help the company to provide greater insights into
campaign selections, marketing opportunities and performance measurements. Improving
the speed and flexibility of the company’s segmentation process, thus being able to
segment data quickly as a key benefit, does this. Even though insights into campaign
selections, marketing opportunities and performance measures may be the reason this
company chose to go with SAS software, another company may want to be able to
analyse historical data to try to determine trends in their selling patterns, or see how their
product measure up to competitor’s products. To reiterate, a company must choose the
correct BGIS that best fits their needs.
Table 3 Database leaders in 2003

Company Market share (%) Growth (2002–003) (%)

IBM (including Informix) 35.7 4.9
Oracle 32.6 2.4
Microsoft 18.7 11.1
NCR/Teradata 2.8 6.0
Others 10.3 3.7
Source: Adapted and condensed from reports by Hall (2004)
38 A.D. Smith

2.4 Advantages and disadvantages of BGIS

2.4.1 Advantages
It is becoming more and more apparent how important the role of BGIS is becoming in
competitive e-commerce and e-government strategies (Lau and Kwok, 2007). According
to Raab (2004), marketing is especially subject to inherent uncertainties that are not
present in other business activities. This situation limits the precision of BGIS, but users
should expect to find continued expansion of the limited choices in BI-related software
for marketers. However, compared with other BGIS-related tools, marketing systems will
pay less attention to structured analysis of historical data and more towards the future.
Historically, marketing depended on the collected data, but with new innovations coming
about in BGIS, marketing and related functions can take advantage of current data to
focus on the future.
Another advantage of BGIS is that the data can be exported into a common
spreadsheet program, such as Excel. Bannan (2005) suggested that it should be common
sense that the end user sees a report or analysis in Excel, Word or PowerPoint, since it
helps them use the data the way that they work. According to Wu (2004), spreadsheet
programs are widely used by organisations of all sizes because they are intuitive and
downright easy to use.
Yet another advantage is the necessity for human interpolation on the data provided
by a BGIS. Elrom (2005) felt that relying on computers to analyse BGIS is tempting, but
the human element is more critical to business analysis. A more complete and dynamic
intelligence picture is generated based on the analysis of primary sources coupled with
information gathered live from industry experts, competitors, customers, suppliers and
manufacturers when combined with the human element. This compiled analysis will
result in an overall view that is more meaningful than a compilation of data by BGIS,
since real BI lets the user know what the information means, its importance, its
vulnerabilities and risks, and what actions warrant responses. This may not seem like an
advantage at first thought, but the intelligence and experience of a seasoned employee
may be more insightful than any computer program could ever be. Also supporting the
idea that the human thought process is as critical to the success of an initiative is Hall
(2004), when BGIS simply points you in the right direction through the creation of doubt.
It forces management and governmental officials to question BGIS conclusions and go
back and develop new assumptions and conditions.
The ability to obtain up-to-date, real-time information is also an advantage to having
BGIS. Data can be updated instantly, daily, weekly, monthly, or at any other determine
time interval. According to Schwartz (2005), executives can see the impact of changes
that they are making, very quickly, and do a lot of what-if questions. Baer (2003)
discovered that BGIS system users often learn from experience how often they should
refresh their data warehouses. In many instances, companies and e-governmental
agencies will refresh sales daily, while inventory and financial data, which do not change
as often, are refreshed weekly and monthly. For companies and e-governmental agencies
that reach for the goal to become a high-performance organisation that promotes global
competition, customer sophistication and company agility as key success factors (“It’s
‘think big, start small’ with business …” 1999). BGIS have many advantages that can
make them an excellent way to reach that goal.
 Business and e-government intelligence 39

2.4.2 Disadvantages
One of the most prominent disadvantages of BGIS is the quality and quantity of data that
is produced by these systems. In a study done by Hall (2004), a base of 921 U.S. and
Canadian companies and e-governmental agencies, data warehouse users cited these
issues as the challenges they face most often, which include data quality, security,
availability, data standards and consistency, web-based access, and performance and
scalability. As cited by Wu (2004), poor quality of data still remains the major problem
associated with BGIS solutions, with more than 25% of critical data within Fortune
1000 enterprises remaining flawed (inaccurate or incomplete) at least through 2007. As
Levinson (2005) suggested, data are the most fundamental component of any BGIS
endeavour, since it is the building blocks for insight. Therefore, business enterprises must
get their data stores and data warehouses in good working order before they can begin
extracting and acting on these insights. Ultimately, experiencing flawed data can result in
lost time and money for a corporation; hence wasting both time and money, as King
(2005) mentions, by providing users access to data without setting concrete BGIS goals,
usually resulting in meandering through out-of-context information.
According to a study done by Ventana Research (Bannan, 2005), it is estimated that
nearly 60% of companies and e-governmental agencies have data mining or BGIS
installed. Of those, 12% stated they use their software at least once every hour, while
36% cited that they use it at least once each day. Taking these figures into consideration,
it is imperative that the information companies and e-governmental agencies are looking
at is accurate and easy to evaluate. In order to tackle the poor data quality issue, Bannan
(2005) suggested that companies and e-governmental agencies need to share data with
caution, look beyond transactional data, clean the data regularly by deleting mistakes and
duplicates, distribute data at every level, fund training and relearning, balance server
space with strong analysis, aggregate data, do not delete information, standardise
whenever possible, talk to your users often, get executive buy-in, create a continuity plan
for your data, treat your partners like employees.
Although it was listed as an advantage in the above section, it is also said that
being able to export data into spreadsheets can be a disadvantage. According to Burns
(2004) and Baer (2003), spreadsheets are inefficient and not completely reliable: errors
can slip in through re-keying or calculation mistakes. Unfortunately, the same data can be
interpolated in different ways by different departments.
Real-time BGIS was mentioned previously. While it can be an advantage for some
applications, it can be a hassle and unwarranted for other applications. For traditional
business-intelligence applications, such as analysing sales data to detect trends and/or
profile customers, investing large sums into IT resources to create real-time business-
intelligence systems may not result in profitable returns on investment. Traditional uses
have been for strategic analysis and planning carried out by top management, but these
functions relate to longer-term planning and strategies; hence, according to Whiting
(2003), there may be no compelling reason for real-time analysis.
From the standpoint of the consumer, yet another disadvantage to a company having
BGIS is the fact that all types of information are being collected on them. This is a
growing concern with the boom in identity theft and other internet scams that can be
performed with the information that companies and e-governmental agencies collect with
their BGIS (Dwivedi and Weerakkody, 2007; Kolsaker and Lee-Kelley, 2007; Smith,
40 A.D. Smith

2005d). Security needs to be a major factor in choosing a BGIS in order to avoid any
information leaks resulting in a reduction in consumer confidence in the company.

2.5 Costs and benefits of BGIS

2.5.1 Costs
In a survey completed by Burns (2004), 11 BGIS-related providers were asked to provide
the average cost of the system license, as well as average implementation costs. Table 4
illustrates the basic findings. In a study done by Negash (2004), for a firm starting from
scratch, putting BGIS applications in place includes several types of costs. Hardware
costs especially if a data warehouse is in use, then the principal hardware needed is a
data mart specifically for BGIS and, perhaps, an upgrade for the data warehouse.
Software costs may include traditional BGIS packages, which can cost $60,000 and up.
Subscriptions to various data services also need to be taken into account. Implementation
costs are involved once the hardware and software are acquired; a large one-time expense
is implementation, including initial training. In addition, annual software maintenance
contracts typically run 15% of the purchase costs. Personnel costs for people assigned to
perform BGIS and for IT support related personnel need to be fully considered to take
into account salary and overhead, space, computing equipment and other infrastructure
for individuals.
Fordham et al. (2003) suggested age group, product line, industry segment,
geographic area, distribution channel, and type of marketing effort, market segment,
and responsibility centre study that customer behaviour met. Even though there is a
significant cost for a company to implement a BGIS, the information from the system can
be used in the marketing field, as well as most other areas of a company, to reduce costs.
Competency centres are an additional cost to a company if they choose to implement
one. The benefits mentioned previously, competency centres could also reduce costs.
According to Whiting (2004), cost reduction is the driving factor for companies and
e-governmental agencies to create competency centres and consolidate business-
intelligence systems. Even though start-up costs for a business-intelligence competency
centre can be $1 million to $2 million, depending on a company’s size, the benefits
outweigh the costs in most situations.
Table 4 Average license and implementation costs

Provider Average license cost ($) Average implementation cost ($)

Applix 51,000 51,000
Databeacon 51,000 12,760
Informatica 55,300 55,300
Information Builders 68,000 68,000
OutlookSoft 127,600 63,800
ProClarity 34,000 51,000
Cognos 25,500 0
BizTools 550 0
Source: Partially adapted from Burns (2004)
 Business and e-government intelligence 41

2.5.2 Benefits
There are many benefits that an entity can reap by implementing a BGIS. First, and
foremost, there are considerable profits to be made by both vendors and customers
of BGIS. When 538 technology decision-makers at North American and European
companies and e-governmental agencies were asked, according to Hall (2005), if in 2005,
will their companies and e-governmental agencies purchase BGIS-related software or
services, their overall response was no (54%), yes (33%) and unsure (12%). This
certainly illustrates that there is evidence of a large potential market, especially if the
trend in business continues to focus on data collection and interpretation. Hall also found
actual (2004, $5.3 billion; 2004, $5.6 billion) and predicted growth (2005, $6 billion;
2006, $6.5 billion; 2007, $7 billion; and in 2008, $7.3 billion) for the BGIS marketplace.
Growth expected in worldwide revenue for selected BGIS-related applications including
end-user query, reporting, and analysis of actual (2004, $3.4 billion) and predicted (2005,
$3.6 billion; 2006, $3.8 billion); data-mining applications revenues of actual (2004, $595
million) and predicted (2005, $649 million; 2006, $701 million); and packaged data mart
and/or warehousing applications revenues of actual (2004, $285 million) and predicted
(2005, $301 million; 2006, $316 million) (Hall, 2005). These figures should support the
notion that BGIS-related systems’ applications are a booming field and worthy of
considerable research in the knowledge management fields.
Companies and e-governmental agencies can also benefit by the effective use of t
he information provided by the BGIS in their marketing strategies. Fordham et al.
(2003) described how these systems can be used in the grocery store industry, through
promotions to target specifically identified customer needs. BGIS record sales by
purchaser, track individuals’ buying behaviours over time, and compare their coupon
redemption habits through an analysis of intelligence can identify patterns and signal
trends. Benefits can be seen in the healthcare industry, as well, when effective data
mining can discover patterns of care that could truly transform the delivery of care
(Fickenscher, 2005). The potential savings that will be derived from BGIS-derived
applications can deliver faster, quicker and better care that should exceed the savings
from all other sources. Hence, proper strategic leveraging of BGIS cannot only save
money, but they can also make money as well.

3 General implications into the future of BGIS

Companies and e-governmental agencies are becoming more open with their
comprehensive and enormous volumes of data. Although applications of intelligence
and data-mining software, the technology is still complex and can be tricky to handle,
coupled with hardware’s ability to run analytics is limited, mainly because of its small
size and low-grade processing power, there are numerous competitive advantages of BI
in knowledge management applications; certainly worthy of considerable research in the
knowledge management fields. As Negash (2004) suggested, the majority of BGIS-
related benefits are intangible and the hope is that a good BGIS will lead to a profitable
return at some time in the future. In general, most companies and e-governmental
agencies are anticipating some type of benefits if they use their BGIS correctly, whether
it is profitability, efficiency or an increase in quality. For example, although marketing
traditionally used a mass volume approach, technology can bring focus so companies and
42 A.D. Smith

e-governmental agencies can keep costs down; maximise profit, and keep customers
happy (Manchester, 2003). With these advances in technology, companies and
e-governmental agencies can utilise BGIS to perform many tasks in marketing areas, as
well as in other business functions.
Predictive analytics are going to play a large role in the future success of BGIS. Much
of this success can be achieved by using predictive analytics/methods of directed and
undirected knowledge discovery, relying on statistical algorithms, neural networks
and optimisation research to recommend and predict future actions based on applying
patterns in data to predict the behaviour of citizens to proposed regulations, customers,
products, services, market dynamics and other critical transactions (Agosta, 2004).
Predictive analytics can be used to achieve a better understanding of the customer,
segment and predict customer behaviour and forecast product demand characteristics.
According to Wu (2004), sophisticated BGIS users need predictive analytics to model
‘what if’ scenarios. Regarding predictive analytics, decision trees, neural networks
and data-mining algorithms are almost universally available. Table 5 illustrates various
differentiators among data warehousing, data mining and predictive analytics, based on
research adapted by Agosta (2004).
Table 5 Data warehousing, data mining and predictive analytics differentiators

Data warehousing Classic data mining Predictive analytics

Query and reporting functions Statistical analysis Prescriptive algorithms
(through structured query language
SQL applications)
Static perspective Continuous changes Discontinuous changes
Describe the present and past Predicting past events Predicting future event
Assume hypothesis Validate hypothesis Invent and validate
hypothesis
Source: Partially adapted from Agosta (2004)
The future of BGIS and its many applications will be affected by many factors in the
business environment, a few examples could be: changes in the legal environment, the
amount of information employers will allow their employees to have access to and
the emergence of the wireless modalities (Frye et al., 2007; Seeman et al., 2007). With
regards to future changes the legal environment, Wu (2004) suggested that various
legislative acts and international accords are influencing the BGIS market, which in turn
creates demand for BGIS-related technology. Some of these enactments have required
managers and their organisations to provide greater monitoring of activities, reporting to
third parties, privacy and safeguarding of data. Certainly, with recent court cases with
Enron and WorldCom, these safeguards would be a welcome relief to users of data.
When it comes to businesses sharing more information with their employees,
Williams (2001) pointed out that the majority of BGIS applications have been structured
around analysing, processing and disseminating the data in a comprehensible format,
especially for use only by intelligence analysts. For example, it is estimated that more
than 75% of employees in the USA now have access to core business data (Smith, 2007;
Smith and Lias, 2005; Williams, 2001). Companies and e-governmental agencies are
becoming more open with their data, hopefully allowing its employees to gain a better
understanding of the operations, its goals, and how to reach those goals. Although
 Business and e-government intelligence 43

applications of such intelligence software, the technology is still complex and can be
tricky to handle, coupled with hardware’s ability to run analytics is limited, mainly
because of its small size and low-grade processing power, there are numerous
competitive advantages of BGIS. The advances in wireless technology, even over the
past few years, have been tremendous in nature. There is no doubt that companies and
e-governmental agencies will be able to access and analyse their BGIS-related data
through a wireless device.
In conclusion, BGIS can play a large role in the success of a marketing strategy, if
utilised as a marketing tool. Many users of knowledge-based systems, such as healthcare
providers, market researchers, GIS providers, to name a few, are recognising the value of
BI systems analyse customers’ needs and behaviour patterns through more advanced and
granular primary data gathering systems available for analysis. BGIS have evolved into a
crucial part of an organisation over the years. They are continually evolving and changing
in order to meet business needs. They allow corporations not only to analyse historical
data, but also to utilise that historical data to make predictions for the future.

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