The relationship among business intelligence systems adoption, information technology infrastructure, innovation and competitive environment on performance of banks in Malaysia

This study was conducted to determine the relationship by providing a framework that integrates business intelligence systems adoption, information technology infrastructure, innovation, competitive environment, and the performance of Malaysian banking institutions. This study focused on banks in Malaysia where the identified unit of analysis was the organisation represented by their managers. The views of knowledge-based, the resource-based theory and contingency theory were underpinned in this study. The Statistical Package for Social Science (SPSS) and Partial Least Squares (PLS) approach to structural equation modelling (SEM) via Smart PLS 3.0 software were employed in this study. A total of 177 samples were deemed usable which resulted in an effective response rate of 16.93 percent. The current study clarifies how business intelligence systems adoption and information technology infrastructure both directly and indirectly predict innovation and performance outcomes. This research also highlighted the relationship between innovation and performance as moderation factors of competitive environment. The findings indicated that out of the 8 hypotheses inferred, 7 hypotheses were found to be supported, while one hypothesis was the contrary. The results obtained for the hypothesis depicted the positive significant relationship between business intelligence systems adoption and performance, information technology infrastructure and performance, business intelligence systems adoption and innovation, information technology infrastructure and innovation, and, innovation and performance, was supported (H1, H2, H3, H4, and H5). Innovation does partially mediate the relationship between business intelligence systems adoption and performance (H6), and also innovation does partially mediate the relationship between information technology infrastructure and performance (H7). Competitive environment does not moderate the relationship between innovation and performance (H8). This study proposed several practical suggestions to banking institutions on how employees can innovate when enhancing their business intelligence systems adoption and information technology infrastructure to improve performance among them. The management should provide a platform for the employees to enhance their innovativeness through the implementation of business intelligence systems adoption and information technology infrastructure. Furthermore, performance can be improved if the management focuses heavily on increasing innovation among employees. The major contribution of the current study is the proposed model for measuring the performance of banking institutions in Malaysia. The performance of these institutions is fundamental as they contribute significantly to the nation’s economy.