The Conceptualization of Data-driven Decision Making Capability

We are in the era of big data, and businesses are trying to become more data-driven and increase their decision making efficacy. However, there is little research that explores the dimensions of data-driven decision making (DDDM) capability. The authors analyze existing literature and summarizes four approaches to conceptualizing capabilities: unrelated, unidirectional, entanglement, and mixed. We then discuss the DDDM process and propose a multi-dimension construct of DDDM capability by following the process-based entanglement approach. The DDDM capability is conceptualized as a combination of data governance capability, data analytics capability, insight exploitation capability, performance management capability, and integration capability. Academic and managerial implications are also discussed.

[1]  T. Reay,et al.  What's the Evidence on Evidence-Based Management? , 2009 .

[2]  Varghese S. Jacob,et al.  Impact of the Union and Difference Operations on the Quality of Information Products , 2009, Inf. Syst. Res..

[3]  Brian Gill,et al.  A Conceptual Framework for Data-Driven Decision Making , 2014 .

[4]  Narayan Ramasubbu,et al.  How Information Management Capability Influences Firm Performance , 2011, MIS Q..

[5]  Ziaul Huq,et al.  Employee and Customer Involvement : The Driving Force for Six-Sigma Implementation , 2010 .

[6]  Sharon F. Rallis,et al.  Inquiry-Minded Schools: Opening Doors for Accountability. , 2000 .

[7]  Viswanath Venkatesh,et al.  Leveraging Digital Technologies: How Information Quality Leads to Localized Capabilities and Customer Service Performance , 2013, MIS Q..

[8]  T. Davenport.  Competing on analytics. , 2006, Harvard business review.

[9]  Carol Pollard,et al.  Exploring IT Governance in Theory and Practice in a Large Multi-National Organisation in Australia , 2009, Inf. Syst. Manag..

[10]  Graeme G. Shanks,et al.  Achieving benefits with business analytics systems: an evolutionary process perspective , 2012, J. Decis. Syst..

[11]  T. Davenport,et al.  Data to Knowledge to Results: Building an Analytic Capability , 2001 .

[12]  Farimah HakemZadeh,et al.  Toward a theory of evidence based decision making , 2012 .

[13]  Thiagarajan Ravichandran,et al.  Effect of Information Systems Resources and Capabilities on Firm Performance: A Resource-Based Perspective , 2005, J. Manag. Inf. Syst..

[14]  Paulo B. Góes,et al.  Editor's comments: big data and IS research , 2014 .

[15]  Arun Rai,et al.  Firm performance impacts of digitally enabled supply chain integration capabilities , 2006 .

[16]  V. Kumar,et al.  Data‐driven services marketing in a connected world , 2013 .

[17]  Kenneth L. Kraemer,et al.  e-Commerce Metrics for Net-Enhanced Organizations: Assessing the Value of e-Commerce to Firm Performance in the Manufacturing Sector , 2002, Inf. Syst. Res..

[18]  William J. Kettinger,et al.  Information management practices (IMP) from the senior manager's perspective: an investigation of the IMP construct and its measurement , 2011, Inf. Syst. J..

[19]  Ying Lu,et al.  Understanding the Link Between Information Technology Capability and Organizational Agility: An Empirical Examination , 2011, MIS Q..

[20]  Katja Gruenewald,et al.  Fundamentals Of Management Essential Concepts And Applications , 2016 .

[21]  Fredrik Nilsson,et al.  Recent advances in performance management : the Nordic case , 2002 .

[22]  John M. Ward,et al.  A dynamic capabilities perspective of IS project portfolio management , 2014, J. Strateg. Inf. Syst..

[23]  Tom Fawcett,et al.  Data Science and its Relationship to Big Data and Data-Driven Decision Making , 2013, Big Data.

[24]  Pankaj Setia,et al.  How information systems help create OM capabilities: Consequents and antecedents of operational absorptive capacity , 2013 .

[25]  Shanling Li,et al.  Why Do Software Firms Fail? Capabilities, Competitive Actions, and Firm Survival in the Software Industry from 1995 to 2007 , 2010, Inf. Syst. Res..

[26]  Varun Grover,et al.  Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study , 2005, J. Manag. Inf. Syst..

[27]  Robert Johnston,et al.  ‘Good enough’ performance measurement: a trade-off between activity and action , 2002, J. Oper. Res. Soc..

[28]  Hüseyin Tanriverdi,et al.  Information Technology Relatedness, Knowledge Management Capability, and Performance of Multibusiness Firms , 2005, MIS Q..

[29]  S. Zahra,et al.  Absorptive Capacity: A Review, Reconceptualization, and Extension , 2002 .

[30]  Nirup M. Menon,et al.  Managing Technology and Administration Innovations: Four Case Studies on Software Reuse , 2004, J. Assoc. Inf. Syst..

[31]  Matthias Goeken,et al.  Towards an Evidence-based Research Approach in Information Systems , 2011, ICIS.

[32]  Victoria L. Bernhardt.  Designing and Using Databases for School Improvement , 2000 .

[33]  Hüseyin Tanriverdi,et al.  Cross-Business Information Technology Integration and Acquirer Value Creation in Corporate Mergers and Acquisitions , 2011, Inf. Syst. Res..

[34]  Zhongsheng Hua,et al.  The Impact of IT Capabilities on Firm Performance: The Mediating Roles of Absorptive Capacity and Supply Chain Agility , 2013, Decis. Support Syst..

[35]  Rebecca Angeles.  Anticipated IT infrastructure and supply chain integration capabilities for RFID and their associated deployment outcomes , 2008, iiWAS.

[36]  Kevin Zhu,et al.  The Complementarity of Information Technology Infrastructure and E-Commerce Capability: A Resource-Based Assessment of Their Business Value , 2004, J. Manag. Inf. Syst..

[37]  Melnned M. Kantardzic.  Big Data Analytics , 2013, Lecture Notes in Computer Science.

[38]  Michael Dinger,et al.  Absorptive Capacity and Information Systems Research: Review, Synthesis, and Directions for Future Research , 2012, MIS Q..

[39]  R. Grant.  Chapter 8 – Prospering in Dynamically-Competitive Environments: Organizational Capability as Knowledge Integration , 1999 .

[40]  Jeroen P. van den Berg,et al.  Improving operational performance by influencing shopfloor behavior via performance management practices , 2011 .

[41]  Gi Mun Kim,et al.  IT Capabilities, Process-Oriented Dynamic Capabilities, and Firm Financial Performance , 2011, J. Assoc. Inf. Syst..

[42]  J. Brown,et al.  Organizing Knowledge , 1998 .

[43]  Albert H. Segars,et al.  Knowledge Management: An Organizational Capabilities Perspective , 2001, J. Manag. Inf. Syst..

[44]  Victoria L. Mitchell.  Knowledge Integration and Infromation Technology Project Performance , 2006, MIS Q..

[45]  Lerzan Aksoy.  How do you measure what you can't define? , 2013 .

[46]  Omar El Sawy,et al.  Absorptive Capacity Configurations in Supply Chains: Gearing for Partner-Enabled Market Knowledge Creation , 2005, MIS Q..

[47]  Saonee Sarker,et al.  Exploring Agility in Distributed Information Systems Development Teams: An Interpretive Study in an Offshoring Context , 2009, Inf. Syst. Res..

[48]  J. Pfeffer,et al.  Evidence-based management. , 2006, Harvard business review.

[49]  Christina W.Y. Wong,et al.  From dynamic capabilities to ERP enabled business improvements: The mediating effect of the implementation project , 2014 .

[50]  Jinghua Xiao,et al.  Resource Structuring or Capability Building? An Empirical Study of the Business Value of Information Technology , 2012, J. Manag. Inf. Syst..

[51]  Gi Mun Kim,et al.  Investigating the Value of Sociomaterialism in Conceptualizing IT Capability of a Firm , 2012, J. Manag. Inf. Syst..

[52]  Shu Han,et al.  Changing the Competitive Landscape: Continuous Innovation Through IT-Enabled Knowledge Capabilities , 2010, Inf. Syst. Res..

[53]  N. Venkatraman,et al.  REFLECTING "KNOWLEDGE" IN STRATEGY RESEARCH: CONCEPTUAL ISSUES AND METHODOLOGICAL CHALLENGES , 2004 .

[54]  Neil F. Doherty,et al.  The role of IS capabilities in delivering sustainable improvements to competitive positioning , 2009, J. Strateg. Inf. Syst..

[55]  J. Manyika.  Big data: The next frontier for innovation, competition, and productivity , 2011 .

[56]  Sachchidanand Singh,et al.  Big Data analytics , 2012 .

[57]  Lior Fink,et al.  How do IT capabilities create strategic value? Toward greater integration of insights from reductionistic and holistic approaches , 2011, Eur. J. Inf. Syst..

[58]  Manoj K. Malhotra,et al.  Antecedents to supplier integration in the automotive industry: A multiple-case study of foreign subsidiaries in China , 2010 .

[59]  Matthew D. Hall,et al.  The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance , 2008 .

[60]  Lorin M. Hitt,et al.  Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance? , 2011, ICIS 2011.

[61]  Daniel Light,et al.  A Theoretical Framework for Data-Driven Decision Making , 2006 .

[62]  Palmer Morrel-Samuels,et al.  Merged Datasets: An Analytic Tool for Evidence-Based Management , 2009 .