Business analytics capability, organisational value and competitive advantage

ABSTRACT Business Analytics makes the assumption that given a sufficient set of analytics capabilities exist within an organisation, the existence of these capabilities will result in the generation of organisational value and/or competitive advantage. Taken further, do enhanced capability levels lead to enhanced impact for organisations? Capability in this study is grounded in the four pillars of Governance, Culture, Technology and People from the Cosic, Shanks and Maynard capability framework. We set out to undertake the first empirical investigation to measure if there is a positive relationship between Business Analytics capability levels as defined by Cosic, Shanks and Maynard, and the generation of value and competitive advantage for organisations, and do enhanced capability levels lead to enhanced impact. Data gathered from a survey of 64 senior analytics professionals from 17 sectors provides evidence to support that a strong and statistically significant correlation exists between higher capability levels and the ability to generate enhanced organisational value and competitive advantage. Additionally, a revised definition of Business Analytics is proposed, given that Business Analytics should give rise to organisational value and/or competitive advantage and that for this to occur the necessary capabilities must be in place.