Firm Performance in the Era of Big Data Analytics: The Effects of Analytical Human Capital on Firm Capabilities and Performance

The Big Data phenomenon has revolutionized the way firms do business by providing immense opportunities for valuable business insights from large amounts of data. Big data analytics (BDA) has emerged as one of the top technology investment areas as firms consider it a significant impetus for superior firm performance. However, many firms adopting BDA find it challenging to gain an advantage from their BDA investments. Scholars note the need to further understand the factors and mechanisms of BDA success. Some anecdotal evidence has indicated that a critical barrier to BDA success may be the lack of a necessary workforce with analytics skills. A review of recent BDA literature revealed a lack of research on the role of analytics human capital in relation to firm performance. In this dissertation study, I draw upon the theoretical perspectives of knowledge-based view and dynamic capabilities to examine the impacts of analytics human capital (HC) on firm performance and identify related firm capabilities. Noting the crucial role of managerial skills in business strategy, I further classify analytics HC into managerial and employee analytics HC and hypothesize that both these types of human capital are a source of superior firm performance.This study empirically examines the effects of managerial and employee analytics HC on firm performance while also investigating the mediating firm capabilities. As prior studies have found that managerial skills impact strategic change capabilities, and employee skills affect productive efficiency capabilities, the mediating role of these capabilities is investigated. In addition, the moderating influence of environmental dynamism and information technology (IT) infrastructure is also considered. The sample of Fortune 500 companies was used in the study as this sample has been widely used and found appropriate for strategy studies linked to firm performance. The study results confirm that both managerial and employee analytics HC have a significant positive impact on firm performance. The results also support the partial mediating effect of strategic change capability in the relationship between managerial analytics HC and firm performance. Further, the partial mediating effect of productive efficiency capability in the relationship between employee analytics HC and firm performance is also supported. Furthermore, Environmental dynamism was found to marginally moderate the impact of managerial analytics skills on firm performance. Finally, the moderating role of IT Infrastructure quality was also marginally supported. The study results confirmed the key role of analytics HC in improving the firm performance and identified the firm capabilities that mediate the effects of analytics HC on firm performance. In summation, the focus of BDA initiatives has been predominantly on big technology investments while often neglecting the development of analytics HC in the firms. This research study highlights the crucial role of analytics HC on firm performance. It provides a strong empirical basis for firms to develop their managers’ and employees’ analytics skills to derive business value from their BDA investments. The empirical evaluation of the firm capabilities: strategic-change capability and productive capability, also contribute to research on dynamic and ordinary capabilities. This study is one of the early empirical studies to examine the impacts of analytics human capital on firm performance in the context of Big data analytics and therefore has important implications for both academia and practice in this area