Analytics Capabilities and the Decision to Invest in Analytics

The increasing use of data-driven decision making and big data is leading organizations to invest in analytics software and services. However, little is known about the type of analytics capabilities within IT that are required and whether there is a common progression or development model of analytics capabilities. Also unknown is how the level of analytics capabilities and other factors influence a firm’s decision to invest in analytics. The purpose of this research is to explore the relationships between levels of distinct analytics capabilities and to understand how they and other factors influence the analytics investment decision. The findings suggest that there is a distinct progression in the development of analytics capabilities, and that firm size is associated with increased capability. The results suggest that firms more likely to invest in analytics have higher current levels of specific analytics capabilities, are larger, and are located in less-competitive industries.