Big Data for Creating and Capturing Value in the Digitalized Environment: Unpacking the Effects of Volume, Variety, and Veracity on Firm Performance*

Abstract

Despite significant academic and managerial interest in big data, there is a dearth of research on how big data impacts the long‐term firm performance. Reasons for this gap include a lack of objective indices to measure big data availability and its impact, and the tendency of studies to ignore the costs associated with collecting and analyzing big data, assuming that big data automatically delivers benefits to firms. Focusing on how firms create and capture value from big data about customers, we use the resource‐based view and three dimensions of big data (i.e., volume, variety, and veracity) to understand when the benefits outweigh the costs. Relying on the number of downloads of mobile device applications, we find that volume of big data has a negative effect on firm performance. This result suggests that the “bigness” of big data alone does not ensure value creation for a firm, and could even constitute a “dark side” of big data. Because big data variety—measured as the number of types of information taken per each application—moderates the negative effects of big data volume, simultaneous high values of volume and variety allow firms to create value that positively affects their performance. In addition, high levels of veracity (i.e., a high percentage of employees devoted to big data analysis), are linked to firms benefiting from big data via value capture. These findings shed light on the circumstances in which big data can be beneficial for firms, contributing to a better theoretical understanding of the opportunities and challenges and providing useful indications to managers.

Digital Transformation and Innovation Management: A Synthesis of Existing Research and an Agenda for Future Studies

“…At this level of analysis, Cappa et al (this issue) study how the characteristics of big data (volume, variety, and veracity) affect long‐term firm performance, hence contributing to a better theoretical understanding of the opportunities and challenges going along with the adoption of these new technologies. In particular, the authors conduct an empirical analysis on a sample of downloads of mobile device applications and find that volume of big data harms firm performance, while variety moderates this negative relationship.…”

“…The papers published in this special issue discuss and analyze some of these under‐investigated issues. Specifically, by covering three level of analysis (namely, macro, meso, and micro), and by integrating both qualitative and quantitative research methodologies, they shed new light on digital product platforms (Hilbolling et al, this issue), provide evidence about the impact of big data on firm performance (Cappa et al, this issue), investigate the role of organizational adaptability, agility, and ambidexterity on digital trasnformation (Scuotto et al, this issue), frame the influence of digitization and connectivity on knowledge search and recombination (Lanzolla et al, this issue), analyse the role of digital machines on production process routines (Aversa et al, this issue), discuss how the interplay between family management and technological diversification shape the development of exploratory and exploitative IoT innovations (Ceipek et al, this issue), unveil how employees respond to ambidextrous organizational models to accelerate digital innovations (Smith & Beretta, this issue), assess the impact of digital tools on organizational practices in the innovation process (Marion & Fixson, this issue).…”

Choosing a Data Storage Format in the Apache Hadoop System Based on Experimental Evaluation Using Apache Spark

“…Big data means such volumes of information collected from various sources, where processing using traditional methods becomes very difficult or impossible [2,3]. At the same time, most researchers agree that big data can be understood through not only the volume, but also their ability to be sources for generating valuable information and ideas [4].…”

The Effects of Applying Privacy by Design to Preserve Privacy and Personal Data Protection in Mobile Cloud Computing: An Exploratory Study

“…More importantly, it has been reported that people's personal data is just that personal; when an organization fails to protect it from loss, damage or theft, it is more than an inconvenience [3]. Another concern is when a firm's digitalization practices are deemed improper distribution and use of customer data [4]. Moreover, bankruptcy happened, due to a data breach [4,5].…”

“…Another concern is when a firm's digitalization practices are deemed improper distribution and use of customer data [4]. Moreover, bankruptcy happened, due to a data breach [4,5].…”