Increasing firm agility through the use of data analytics: The role of fit

Abstract

Agility, which refers to a dynamic capability within firms to identify and effectively respond to threats and opportunities with speed, is considered as a main business imperative in modern business environments. While there is some evidence that information technology (IT) capabilities can help organizations to be more agile, studies have reported mixed findings regarding such effects. In this study, we identify the conditions under which IT capabilities translate into agility gains. We focus on a specific and critical IT capability, the use of data analytics, which is often leveraged by firms to improve decision making and achieve agility gains. We leverage dynamic capability theory to understand the influence of data analytics use as a lower-order dynamic capability on firm agility as a higher-order dynamic capability. We also draw on the fit perspective to suggest that this impact will only accrue if there is a high degree of fit between several elements that are closely related to the use of data analytics tools within firms including the tools themselves, the users, the firm tasks, and the data. The proposed research model is empirically validated using survey data from 215 senior IT professionals confirming the importance of high levels of fit between data analytics tools and key related elements. The findings provide the understanding of the impacts of data analytics use on firm agility, while also providing guidance to managers on how they could better leverage the use of such technologies. These findings could be more broadly used to inform the effective use of other forms of IT in organizations.