Business Analytics: Capability Maturity and Development

Abstract

In the last two decades, Information Systems (IS) capabilities have emerged as a key source of differentiation and competitive advantage. Research has shown that organisations with more highly developed IS capabilities can achieve higher levels of value and performance than those with less mature capabilities. This is important because Business Analytics (BA) capabilities are also IS capabilities. It is even more important given that organisations all over the world are making increasingly larger investments in BA. Yet despite this, there has been little research in the area of BA capability maturity and development.

Furthermore, much of the existing research focuses on the overall BA maturity of an organisation that is determined by whether or not it has certain capabilities i.e. there is no mechanism by which to assess the maturity of the capabilities themselves. Thus, little is known about how and why BA capabilities evolve over time. To further complicate things, the absence of an explicit definition has resulted in different conceptualisations of what constitutes a BA capability.

Accordingly, in this research, a conceptual study of the extant BA literature was used to develop a theoretically-grounded definition of a BA capability. This definition was then used to identify the key capabilities that constitute an organisational BA initiative that are used to form the basis of a BA capability framework. A Delphi study was used to refine the framework and enhance its practical relevance before converting it into a maturity model. The maturity model was then tested and refined through a series of pilot cases studies prior to being applied in a series of longitudinal real-world case studies.

The empirical data gathered from these case studies provided unprecedented insights into the maturation paths of BA capabilities, their relative importance and value, and the organisational contextual variables that had the most significant positive/negative impacts on their development. Contrary to the implicit assumption in existing BA maturity models and research, it was found that BA capabilities do not follow a forward, linear and incremental path to maturity i.e. their maturity can be reversed over time. This study also showed that BA capabilities can facilitate the development of other BA capabilities. This was essential to identifying the interrelationships that exist between them and explaining how and why BA capabilities mature and develop over time.