Do top-performing companies use business analytics differently and why?

Abstract

It is suggested that companies that use business analytics perform better than those that do not in making strategic decisions and creating business value. However, little academic research based on theories exists to examine the extent to which companies differ in using business analytics and why this difference may contribute to company performance difference. To reduce this knowledge gap, this paper investigates the extent to which top and bottom performing companies differ in using business analytics by means of analysis of variance based on 232 responses collected from UK manufacturers, and seeks to explain how this use difference may be linked to performance difference drawing on the information processing view and path dependence theory. The research findings indicate that top-performing companies are three times more likely than bottom-performing companies to use business analytics and develop a data-driven environment simultaneously; and that the company differences regarding the use of business analytics and the resultant performance may be due to path dependence and how relevant organisational factors are designed. The study contributes to business analytics literature by providing empirical evidences and offering a theoretical-based understanding of business analytics, providing a foundation for future research. This study also has important managerial implications by demonstrating how business analytics can be used to improve performance.