Realizing Value from Business Analytics Platforms: The Effects of Managerial Search and Agility of Resource Allocation Processes

Few organizations have been able to realize value from their investments in business analytics. This could be due to an inadequate understanding of the pattern of investments required to realize value from business analytics. Specifically, we propose that business analytics requires an upfront investment of infrastructure capital to build a mature platform, followed by multiple investments of innovation capital to create value through competitive actions informed by analytics-enabled insights. Drawing on dynamic capabilities and digital options literatures, we develop a model in which the effect of investments in maturity of the business analytics platform on organizational value is moderated by the agility of the process allocating resources for innovation, and by the efforts expended by line managers to search and select the insights. The model is tested on data collected from a survey of line managers. The findings support the proposed model. Implications and plans for future research are discussed.