Value Chain Creation in Business Analytics

Firms are awash in big data and analytical technology as part of the process of deriving values in the current turbulent environment. The literature has reached a consensus that investments in technology only may not reap benefits from business analytics (BA). As such, the main purpose of BA is not about how to install technical capabilities, but about how to create a process whereby a firm builds a value chain converting data into insights and ultimately into quality outcomes. Drawing upon the theory of the information value chain, this study develops a BA value chain creation model and tests it with 268 firms. Results show that organizational resilience, absorptive capacity, and analytical IT capabilities are critical antecedents of analytical decision-making quality, which in turn influences BA net benefits. In particular, organizational resilience emerges as a more significant determinant of analytical decision-making quality than technology and people in the BA value chain creation. Theoretical and practical implications are also discussed in this paper.