Business Intelligence and Absorptive Capacity Impact on Firm Performance in Manufacturing Companies: A Systematic Literature Review

. With the aid of technology, business intelligence manages data to generate innovative ideas. A corporation's absorptive capacity, meanwhile, is its potential to absorb resources to acquire sophisticated commercial activities. This study aimed to determine whether business intelligence and absorptive ability had any real effects on how effectively a firm performed. It also looked at whether the manufacturing industry may gain from implementing both. The study aims to provide evidence that Business Intelligence and Absorptive Capacity work best together and should be applied in manufacturing firms, especially those in Indonesia. This investigation was carried out using a Systematic Literature Review (SLR) of 26 sources. The study's findings point to the benefit of applying business intelligence and absorptive capacity to firm performance, namely an improved capacity for innovation and decision-making that can result in more advantages from both an operational and economic perspective. This study has shed fresh light on the relationship between business intelligence and absorptive capacity and how these concepts are used in the Indonesian manufacturing industry.


Introduction
In 2020, manufacturing in the United States had the highest adoption of BI to remain competitive, at 58% compared to other sectors in the country [1].Nevertheless, Indonesia, as one of the world's leading manufacturing companies, occurs to only have a few manufacturing companies that already implement BI.BI can reduce risks and acquire more profits and is mainly used in manufacturing companies to support their operational and production processes [2].
Besides using BI, absorptive capacity provides valuable information to manufacturing companies by absorbing information from internal and external companies.The ability to recognize and process information to aim for commercial targets makes absorptive capacity beneficial for the company [3,4].To maximize the benefits, a company needs to combine both potential and absorptive capacity and use the knowledge resources efficiently for producing innovation [5].With effective implementation of absorptive capacity, the company can improve its innovation in a dynamic environment [3], recognize new opportunities, and hence enrich processes and products [5].
The relationship between business intelligence and absorptive ability in the manufacturing industry has not been thoroughly studied in the past.Included in this are the effects of business intelligence and absorptive capacity on company performance, particularly in Indonesia, which must improve its manufacturing capacity to keep making enormous contributions to the Indonesian economy.Research on the interaction of business intelligence and absorptive capacity is required, given its significance.Our findings aid in identifying justifications for putting business intelligence and absorptive capacity concurrently in the manufacturing sector, particularly in Indonesia.The use of more powerful technologies and improved business performance are examples of how wise management may develop the manufacturing sector.
To describe the benefits of implementing BI and absorptive capacity in the manufacturing industry, the research for this paper employs the Systematic Literature Review (SLR) method, which entangles gathering various literature related to business intelligence, absorptive capacity, firm performance, and manufacturing companies.Here is the setup for this article.Section 2 of the paper covers the methodology of the literature review.In Section 3, our findings and the results of the literature review are thoroughly discussed.We conclude in section 4 by outlining the limitations of our findings as well as our theoretical and practical ramifications.

Research Methodology
Fig. 1 shows the research stages we did, which are based on a Systematic Literature Review (SLR) method, referring to Xiao and Watson (2019) [6].

Problem Formulation
The three research questions that constitute the main focus of this study are: -(RQ1) How does Business Intelligence (BI) impact firm performance?-(RQ2) How does the absorptive capacity impact firm performance?-(RQ3) How do Business Intelligence and absorptive capacities give benefits to the manufacturing industry?

Inclusion Criteria
-"Business Intelligence," "Business Intelligence impacts on firm performance," "Business Intelligence usage in manufacturing companies," "absorptive capacity," "absorptive capacity impacts on firm performance," and "absorptive capacity usage in manufacturing companies" are the defined keywords for reference literature.
-The literature sources within a six-year term starting in 2018 will be used.
-Specifically, from Google Scholar, electronic databases will be used to compile the literature sources.A lot of literature data, strong accessibility, ease of use, and the ability to view related material were the reasons Google Scholar was selected as the source for the literature search.

Screening Procedures
We read the abstract, introduction, and conclusion of potential references found to make sure they were pertinent to our subject.If it doesn't match, we won't utilize the article as a source.If matches, we continue to read in detail about the article to decide it as our reference.

Literature Search
The inclusion criteria served as the foundation for the literature search parameters.We discovered 62 possible references.

Quality Assessment
In-depth literature reading is being done to find a suitable article to become our reference for this research.A total of 26 sources are found, which are shown in Table 1.

Data Extraction and Analysis
We extract and analyze the data ought from those 26 references to answer those three research questions.

Discuss Findings
To answer the research questions in detail, we discussed the findings made from the previous step.After answering all the questions, we discussed the practical and theoretical implications statements.

Conclude Research
All of the research results then being summarized to complete the research.We also mentioned all limitations that occurred during the research and recommendation for future research.

How does Business Intelligence (BI) impact firm performance?
The impact of Business Intelligence implementation on firm performance based on the literature resources is summarized in Table 2. Network learning, decision-making, and inventiveness can all be improved by business intelligence leading to higher performance behaviors. [7] 2 Companies are more likely to create value through advances in sales, marketing, procurement activities, and operations by enhancing Business Intelligence and data integration capabilities.The use of BI is to improve company performance by providing data that will be used as a decision-making basis. [8] 3 Functional performance is impacted by business intelligence and analysis, and technology investments in these areas are required to improve firm performance.A corporation can make better decisions with the aid of business intelligence by identifying opportunities and trends.
[9], [10] 4 A company can increase its profits by using business intelligence to make decisions that follow the cost-benefit analysis economic model. [10]

5
A company can use business intelligence to convert data into relevant understanding to help with operational planning and strategic decision-making.to maximize resources, improve organizational performance, and elevate competitive advantages, it will lead to consistent [11] upgrading and regeneration in a business firm.
Business intelligence (BI) has been shown through research to improve business performance.We conclude that the primary impact of BI is that it can produce insightful information that is beneficial for making decisions to produce favourable results for the company's advancement [7,8,9,10,11] based on the results of the influence of BI on firm performance, which are displayed in the table above.BI analyses by processing company-owned data, producing valuable information, including potential opportunities and dangers.Companies can use this knowledge to make informed decisions, which can act as a catalyst for corporate change.The effect of BI on firm performance is through having an impact on the company's functional performance and the need on adjusting their organizational structures and resource allocation to maintain the dynamic capabilities information as time passes.BI needs to be considered as a long-term strategic investment for a company [9].
The use of BI technology must be supported by additional suitable facilities and infrastructure, knowledgeable people resources, and efficient vertical and horizontal communication [9].Management must play a critical role in guaranteeing the availability of all necessary components for the BI to function flawlessly.The managerial level also needed to take into account the entire organization to guarantee that all stakeholders collaborate to reach the same goal through priority in the management of resources and the implementation of decision-making, which focuses on enhancing business operations [12].
In their investigation of ECOWAS (Economic Community of West African States) banks, Wahua and Alijah (2020) provide evidence that BI significantly improves company performance as measured by noncost aspects.Contrarily, BI costs have a pronounced negative impact on firm performance when assessed in terms of bank profitability.In general, managerial parties must make sure they properly employ all available resources to prevent losses because the full series of BI apps is expensive.Managers must therefore carefully consider how to balance the firm's finances to maximize profits by cutting costs [10].
According to study data on company A, an Indian fabric manufacturer, they use business intelligence, an AI-powered sales technology platform that runs on a SaaS model.By implementing these solutions, manufacturing companies may automate the collection of order data while focusing more on merchandising, collection, and business development, all the while offering their customers the best options, first-rate service, and minimal inventory.Additionally, the company uses RFID technology, which aids in lowering energy consumption, material waste, transportation costs, and supply chain expenses.The largest manufacturer of commercial textiles in North America, Company B, uses business intelligence tools from Birst BI Solutions.To overcome problems like restricted functionality with disparate data sources, delayed decision-making, and low staff productivity, as well as to increase product quality, minimize lead times, and make better-informed, quicker judgments, it must be used [13].
A company's KPI will change as a result of the introduction of BI.Several KPIs are impacted, including productivity, product quality, and capacity levels [14].More specifically, the influence of BI may be felt most in lead time and takt time capture.However, BI has little to no impact on capacity management and production cycle time [15].
According to the justification given above, implementing business intelligence within a company may have a favourable impact on the company, such as on decision-making, which is reflected in exceptional firm performance.To take advantage of the knowledge, opportunities, and risks that result from data processing using business intelligence, firms must, of course, manage their business components properly.This comprises personnel, information, administration, and business technology.To boost business performance once more, organizations must examine opportunities and determine whether additional technologies might enhance the fundamentals of business intelligence.However, businesses must also be aware of the risks that business intelligence poses to their operations, such as increased costs, a decline in employee morale, and a decline in employee confidence.

(RQ2) How does the absorptive capacity impact firm performance?
Table 3 provided a summary of the impacts of absorptive capacity on firm performance gleaned from the sources.A company with a high level of absorptive capacity will be better able to spot new opportunities, use the knowledge gained to innovate and add new processes and products to its lineup.
[5] 2 External information is being utilized in both potential and realized absorptive capacity to foster innovation and aim for the company's outstanding performance. [4]

3
A company can acquire more outstanding firm performance by utilizing its absorptive capacity to provide an inventive performance that acts as a catalyst. [16] 4 Utilizing innovation and knowledge transfer that was created by absorptive ability can help promote a good association between financial success and absorptive capacity indirectly. [17]

5
A company's knowledge and skill base will grow as a result of using absorptive capacity, giving it a competitive edge in innovation and productivity and improving firm performance. [18] A company's knowledge and skill base will grow as a result of using absorptive capacity, giving it a competitive edge in terms of innovation and productivity and improving firm performance.The capacity to innovate can be increased by enhancing experimentation with new products and services as well as by extending the types and volumes of knowledge obtained through absorptive capacity results [19].The factors that encourage an organization to innovate are known as absorption capacity enablers, and they include external knowledge sources, internal R&D initiatives, and employee abilities.
Tamprateep and Burananuth found that in Indonesian manufacturing firms, a cooperative arrangement with business partners in the form of technology transfer helps the firm's absorption capacity efficiency.The performance of the business can be improved with a flexible IT infrastructure as an underlying company capability.It also updates, standardizes, and integrates IT components to combine data and gain deep information, and it allows knowledge and communication exchange inside the company [20].
The use dimension can be divided into absorption, transformation, and exploitation of knowledge, and the four elements of absorptive capacity are acquisition, assimilation, transformation, and exploitation.According to a study conducted in Turkey, the use dimension has a direct impact on the firm's success, however, the acquisition dimension does not [21].Research of Iran's industrial sectors reveals that realized absorptive capacity (transformation and exploitation) positively mediates between the performance of human and organizational capital as well as that of intellectual capital and firm performance.While this is happening, firm performance and potential absorptive ability (acquisition and assimilation) merely moderate social capital.A corporation will only be able to use strategic resources to its advantage if it has the internal capacity to utilize its external resources to develop collaborative innovation by involving suppliers or even rivals.With the extensive application of collaborative innovation in product and process innovation skills, the level of absorptive ability will increase [5].Moreover, absorptive capacity occasionally enhances a company's financial performance.Although the effective application of absorptive capacity may not immediately improve a company's financial performance, it will eventually do so [4].
The effectiveness of a firm's implementation of absorptive capacity is influenced by the corporation's potential to absorb existing resources to create innovations in the industry.The company's performance will rise the more distinctive ideas it develops and supports with sound planning and execution since it can provide products of high value while utilizing resources effectively.Businesses must assess their capacity for absorption to get the best absorption-neither less nor more.The usage of technology that is anticipated to raise the amount of absorptive capacity is one of the supporting aspects for effective absorption.

(RQ3) How do business intelligence and absorptive capacities give benefits to the manufacturing industry?
The application of absorptive capacity in the manufacturing sector was then covered.Particularly, potential and realized absorptive capacity have a role in the development of exploratory and exploitative innovation approaches in both large-and small-scale sectors.An exploratory innovation strategy may be used by large corporations to develop dynamic business models.Contrarily, the exploitative innovation approach results in the creation of business models that are efficiency-focused.Exploratory innovation techniques in contrast to exploitative innovation strategies in small-scale enterprises result in the redesign of business models that place a premium on novelty and efficiency [22].
Rarely do researchers examine the debate around the absorptive capacity used in Indonesia's manufacturing sector.However, from the perspective of Indonesia's low-tech manufacturing sector, the primary information source is the market's demands, which are affected by consumers.Absorptive capacity can produce unique products and gain a competitive edge by using current external information.Asmara, mapping on the actual and potential capacity for absorbing low-tech manufacturing in Indonesia.Since the production process did not employ outside information, the potential absorptive capacity index is higher than the realized absorptive capacity index.Absorptive capacity contributes more to competitive advantage and product innovation in the low-tech sector than is possible by successfully utilizing external information [23].
The adoption of business intelligence and absorptive capacity, which affects firm performance across several industries, is covered in the section that follows.If there is proper communication between employees, enough discussion activities, learning from experts, and the availability of financial budget allocations, the utilization of absorptive capacity on BI can be maximized.Businesses can effectively utilize BI by making use of its absorptive capacity.Various company stakeholders can easily access information, do useful data analysis, and communicate information with ease with the effective deployment of BI.Additionally, an effective BI system can promote decision-making to increase the effectiveness of the entire organization.However, in the telecommunications sector, the focus of Koulouri and Al-Eisawi's research, these businesses employ BI without taking full advantage of absorptive capacity.As a result, businesses don't reap the full benefits and can even incur significant costs.The company's outcomes from the absorptive capacity's efficiency impact on BI include (1) high competitiveness with competitors, (2) controlling a market share that is more outside than competitors, (3) faster organizational development than competitors, (4) increasing organizational profits in comparison to competitors, and (5) innovating and providing better organizational services than competitors [24].
Supporting the claim as mentioned earlier, absorptive capacity and business information-backed banking support will aid firms in increasing their competitiveness against rivals.To improve the quality and quantity of the anticipated input and output, businesses typically choose to use BI if they can absorb information on all of their business processes.The obstacles businesses confront from outside circumstances increase with the size of their business processes.As a result, they require superior technology, specifically, business intelligence, which can promote enhanced creativity and company performance [25].Users of BI who have a low level of individual absorptive capacity but a wealth of BI-related information have a great deal of opportunity to use BI creatively.A person with higher motivation, however, needs adequate assistance for their innovative skills, which can be developed through absorptive capacity.As a result, it can be said that having substantial BI knowledge offers more benefits for innovation than simply being motivated [26].
After reading the preceding explanation of BI and absorptive capacity, we can see how absorptive capacity can help a company implement its BI.Data will be gathered and transformed by absorptive capacity till it can lead to innovation and enhance BI's decisionmaking.To enable innovation, businesses must take in a variety of information while also taking into account threats and opportunities that have already been identified using BI.The research model that was created using the findings of a Systematic Literature Review (SLR) is shown in Figure 2.

Theoretical Contribution
This research's contribution demonstrates that integrating absorptive capacity, BI, or a combination of the two has only beneficial effects on business success.We demonstrate that BI can transform existing data into crucial information that can be used for decision-making needs and that the application of absorptive ability generates beneficial innovations for businesses.By identifying potential hazards and opening up new business prospects, the two taken together can be valuable.In the end, properly applying both of them can result in a competitive edge that can be continuously improved.
Additionally, this study demonstrates that wherever BI and absorptive ability are applied, as long as the business makes the most of its current resources, the outcomes will still be favourable.A combination of BI and absorptive capacity may be implemented in Indonesia, especially in the manufacturing sector, given the considerable importance the country's manufacturing sector plays globally.

Practical Contribution
As was already mentioned, BI deployment costs a lot of money.The more incurred BI expenditures will be even greater when a firm grows, and its business operations become more complicated.Therefore, businesses must plan to spend as little money as possible on BI while still getting the best returns.As a result, the usage of BI is i appropriate for deployment in major businesses with sufficient technological resources.Management must make sure that they use current data and adapt the BI technologies to their company processes.When the most recent technology can offer improved functionality and outcomes, they can update BI technology from time to time, within a set time frame.
Businesses might set aside additional funds for training, field research, and group discussion sessions.A high level of collective absorptive capacity suggests a high level of organizational absorptive capacity.All stakeholders' criticisms and suggestions, even those that include novel concepts, should be welcomed by management.To do this, management must be loose and non-authoritarian to provide workers with a sense of security within the workplace.A group of already existing inventions can be discussed as a prospective company uniqueness that could move the business on a better path.
The expenditures associated with deploying BI and absorbent capacity for a firm will be high.The cost might be a wise long-term investment, nevertheless, if the organization's management is capable of managing all resources well.Management must therefore take care, plan each decision thoroughly, and think it out.Achieving a higher profit margin than previously is still a possibility thanks to the company's strong performance and the growth in corporate value brought on by innovative activities and the finest decisionmaking.

Conclusion
To motivate Indonesian manufacturing businesses to employ them, this study intends to ascertain the effect of business intelligence and absorptive capacity on firm performance in the manufacturing industry.Given that other studies from different countries or even industries have shown the benefits, Indonesian manufacturing companies may choose to apply both BI and absorptive capacity.Making smart judgments, coming up with a strategy, and putting it into practice can help Indonesian manufacturing companies achieve better results.
The impact of business intelligence on company performance, the manufacturing industry's use of absorptive capacity, and the impact of absorptive capacity on firm performance are a few of the subjects that will be covered.The results demonstrate a relationship between business intelligence and absorptive capacity, demonstrating that use of data obtained from business intelligence can be a source to be processed for the outcomes to help improve absorptive capacity.Despite substantial research on each element, there hasn't been much done to examine how business intelligence and absorptive ability interact to affect firm performance in the manufacturing sector.As a result, this study can provide new knowledge and serve as a foundation for subsequent research on related subjects.
A research limitation is a difficulty in locating references examining the impact of absorptive capacity implementation as well as the impact of BI implementation on firm performance in the manufacturing sector of Indonesia.As evidence that their use is currently common and beneficial, we leverage other data sources from different industry sectors and nations.Another drawback of the study methodology is that if we combine the SLR approach with quantitative or qualitative analysis, our existing findings could provide a more thorough understanding of the problem.In the future, this topic's research can be conducted using empirical techniques to collect data directly from occurrences that take place in the field.

Fig. 1 .
Fig. 1.The detailed process of the research, based on the Systematic Literature Review (SLR) methodology.

Table 1 .
List of Journal and Year References.

Table 2 .
Business Intelligence Impact on The Firm Performance