Innovation Capabilities as a Mediator between Business Analytics and Firm Performance

Abstract

Although business analytics (BA) play an important role in improving firm performance, various firms struggle to deliver their full benefits. Many researchers have investigated the capabilities required to achieve better value through BA, but none have addressed the impact of innovation capabilities as a contextual variable mediating the effects on firm performance. By adopting the Technology-Organization-Environment (TOE) framework, this study suggests a model to evaluate the impact of BA capabilities on firm performance and addresses the mediating role of innovation capabilities. A quantitative approach was adopted for data collection and analysis. Based on 386 surveys of BA experts at Saudi Arabian firms and the use of PLS-SEM to test and validate the model. The results show that organizational factors have a highly significant impact on firm performance. While IT infrastructure and information quality as technological factors showed no significant and positive effect. Furthermore, the findings revealed that innovation capabilities positively mediate the link between IT infrastructure and information quality and firm performance as it affects directly and indirectly firm performance. The findings of this study contribute to the literature by addressing the research gap in BA in the Saudi Arabia context. Moreover, the study result stressing about the role of innovation capabilities on the BA capabilities and the importance of considering the interaction between TOE factors. However, research was carried out within one developing country (Saudi Arabia), which might restrict the findings’ generalizability of the study, and the results must be generalized with care to avoid issues such as structural and cultural variances between developed and developing countries.

EXAMINING THE ROLE OF BUSINESS ANALYTICS CAPABILITY IN FIRMS' AGILITY & PERFORMANCE: EVIDENCE FROM MANUFACTURING SECTOR

“…Better information quality, as well, enhances the overall firm performance, in line with literature that quality information, which is correct and timely, promotes the efficient organizational decision making (Alaskar, 2023;Allwein, 2017;AlTaweel & Al-Hawary, 2021)." Remarkably, the negative relationship between innovative capability and firm agility implies more sophisticated association that deserves further enquiry.…”

“…Business analytics is the utilization of data analysis tools & techniques to aid in decision making in organizations (Khan et al, 2022;Li et al, 2022). A previous study asserted that companies with greater BAA capabilities are better at finding critical patterns in large data sets; hence, they can make critical decisions (Alaskar, 2023). This improved decisionmaking ability is closely linked with improved business agility and performance (Daradkeh, 2023;Wamba, 2022).…”

“…Turning data into value-added information, and creating effective decision-making is called business analytics capabilities (Ravasan, 2023). With BAC as a necessity for enterprises, it becomes necessary to use data to understand impact on business from their financial seating actives (Alaskar, 2023). As datadriven strategies become a must for businesses, it is important to understand the impact of BAC on FA and FP -key components in competitiveness (Arias, Henao & Zapata, 2023).…”

Tacit Knowledge Sharing as a Catalyst for Innovation Capability in Small and Medium Enterprises (SMEs) in the Malaysian Furniture Industry

“…In addition, Rajapathirana and Hui (2018) study concludes that the ability to innovate has a noteworthy and constructive influence on organizational innovation, leading to better innovation performance. The results of the study by Alaskar, (2023) show that innovation capability positively mediates the relationship between IT infrastructure, information quality, and firm performance. The empirical results of the study by Baláž, (2023) on the impact of innovation on firm performance are mixed, but innovation capabilities are seen as critical to maintaining competitive advantage, creating value for customers, and gaining greater market share.…”

Big Data Analytics, Strategic Capabilities, and Innovation Performance: Mediation Approach of Organizational Ambidexterity

“…In the era of rapid digital transformation and data-driven decision-making, strategic innovation capability (SIC) and big data analytics capabilities (BDACs) have a substantial influence over the organizational ambidexterity (OAMB) and innovation performance of organizations aspiring to thrive in the dynamic business landscape [1][2][3][4][5][6]. This study delves into the intricate relationships between these key constructs to unravel the mechanisms through which organizations can harness their SIC and BDACs to drive innovation performance (IP), with a particular emphasis on the mediating role played by OAMB.…”