Gaining competitive advantage through business analytics

Abstract

The industry for business analytics within the BI sphere is growing significantly and the distinction in organizations between transactional information systems and decision-oriented systems breaks down. Firms need to understand both the opportunity and the potential of business analytics. Reporting, which is getting a handle on what happened in organizations, is complemented by analytics that is rather explanatory and predictive. Leveraging business analytics means to use analytics applications in order to analyse business problems and produce related business recommendations to improve business process performance. Business analytics must but be a part of a value creating process operating together with other systems and organisational factors in a synergistic manner, including people, processes, knowledge and relationship assets, culture, structure, and policies. In order for companies to be efficient, they need to automate processes, workflows and make rules. Effectiveness, on the other hand, is about making better decisions, perhaps using the same data that their competitors may have. What matters is not necessarily the technologies deployed, but emerging competence that the firm uses to support its business. A specific “mindset” needs to be installed for companies to invest into business analytics. Organisations need to better understand how best to exploit their data and convert them into information and sense-making capabilities. Business capabilities can be enhanced not only by exploitation of analytical tools, but also by the sophisticated use of information. This leads to a truly sense-making capability or “analytical mindset”. The primary data covers 398 data sets, where firms have been asked about the specifics of their information management. The data is used as input to statistical tests and the value of business analytics is being analyzed in an empirical way.