Business Analytics/Business Intelligence and IT Infrastructure: Impact on Organizational Agility

Business Analytics/Business Intelligence and IT Infrastructure: Impact on Organizational Agility

Xiaofeng Chen (Western Washington University, USA) and Keng Siau (City University of Hong Kong, Hong Kong SAR)
Copyright: © 2020 |Pages: 24
DOI: 10.4018/JOEUC.2020100107
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Abstract

This is an empirical research investigating the impact of business analytics (BA) and business intelligence (BI) use, IT infrastructure flexibility, and their interactions on organizational agility. Synthesizing the systems theory and awareness-motivation-capability framework, the authors propose that BA-Use, IT infrastructure flexibility, and their interactions significantly influence organizational agility. The results show the significant association of BA use and IT infrastructure flexibility with organizational agility. The results also suggest that BA use may demand corporations to build a more flexible IT infrastructure. However, the data does not reveal the proposed interaction between the two drivers of organizational agility.
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Introduction

Business analytics (BA) and business intelligence (BI) have been credited for better management decisions in business. Business intelligence (BI) became a popular term in the 1990s (Chen et al., 2012). In the 2000s, business analytics (BA) was introduced to emphasize the analytic component in BI (Davenport, 2006; Adeborna & Siau, 2014). BA has a very subtle distinction from BI in today’s literature. Sometime, the unified term BI&A is used (Chen et al., 2012). We view BA and BI as two synonymous terms. In this study, we use the term BA throughout the paper because it is more commonly used in the current literature and it reflects the unique characteristic of the information systems. Organizations have spent millions, if not billions, of dollars and sometimes made significant organizational changes to implement BA. BA is popular in practice. However, empirical studies on BA and its business value are relatively scarce in academic research compared to studies on analytical and mathematical modeling, statistical methods, and mining algorithms (Jourdan et al., 2008). Although the last 15 years have witnessed a rise in the number of empirical studies on the business value of BA, only 3% of prior BA studies empirically investigated the impact of BA-Use (Trieu, 2016). In this study, we theorize that BA use has a direct implication on organizational performance based on the synthesis of systems theory, awareness-motivation-capability (AMC) framework, and extant IS research.

Based on the literature review, we theorize that the organizational agility (OA) perspective is a promising lens for studying the significance of BA in organizational performance (Chen & Siau, 2012). OA was defined as the organizational ability that can be measured by factors from two dimensions: the dimension of detecting and the dimension of responding to opportunities and threats (Nevo & Wade, 2010; Sambamurthy et al., 2003). However, our literature review also shows that the definition was presented without theoretical justifications on why the two dimensions possess factors that affect OA. Are there other factors from other dimensions that may also affect OA? While investigating the business value of BA-Use through the lens of OA, we also want to closely examine the theoretical foundation of the OA definition that has been used in the IS field. The research questions of this study include: (1) Is there a theoretical foundation for the current OA definition? (2) What is the role of BA-Use in converting BA assets into BA impacts? (3) How BA-Use and IT flexibility influence each other and interact with each other to influence the OA? In this study, we use the systems theory and AMC framework to elaborate on why the OA definition should include the organizational ability to detect and respond to opportunities and threats. We also propose that the existing OA definition may need to be expanded to include the motivation dimension. Chen and Siau (Chen & Siau, 2012) proposed, and this study further elaborates, that BA-Use and IT infrastructure flexibility (IIF) are two enabling components that can help to improve OA. In this study, according to the systems theory, we theorize that BA-Use will interact with IIF to affect an organization’s agility. Based on the AMC framework, we further propose that in the new data-driven world, BA-Use requires flexible IT infrastructure for organizations to be and remain agile.

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