Research looks at drivers of individual analytics and its effect on decision quality and regret
Research from a team that included a pair of Northwood University professors about the drivers of individual analytics and its effect on decision quality and regret was presented during an international conference over the weekend.
Kevin McCormack and Marcos Oliveira partnered with Peter Trkman (University of Ljubljana, School of Economics and Business) and Marcelo Bronzo Ladeira (Universidade Federal de Minas Gerais, Brazil) for the project. Trkman presented their findings over the weekend at the International Conference on Management and Organization at the University of Ljubljana, which is the central and largest educational institution in Slovenia.
The researchers noted that decision-makers are exposed to an increasing amount of information. Effective analysis and utilization of big data are key factors for success in many business and service domains. In the context of scarce resources and profound changes in customer needs, companies and individuals are faced with an abundance of decision possibilities.
As a result, business analytics (BA) are increasingly being adopted in practice to improve personal and company performance. Companies want to become more data-driven, specifically by taking advantage of real-time BA. Previous research has focused on both companies’ orientation toward analytics use and the required skills of individual decision-makers. However, regardless of the possibility of using modern BA tools, each decision-maker can make either analytically based or intuitive decisions. Many organizations are attempting to implement business analytics solutions without addressing the issue of end-user abilities and capabilities.
The research team investigated the characteristics that influence the likelihood of making analytical decisions, focusing on both analytical orientation and the capabilities of individuals. The researchers conducted a survey using 462 business students as proxies for decision-makers.
“We used partial least squares path modeling to show that analytical capabilities and analytical orientation influence each other and affect analytical decision-making, thereby impacting decision quality and decision regret,” states the study’s executive summary. “Our findings suggest that when implementing business analytics solutions, companies should focus on the development not only of technological capabilities and individuals’ skills but also of individuals’ analytical orientation.”
Furthermore, the researchers found that analytical capabilities and analytical orientation influence each other and both affect analytical decision-making. This research suggests that the more analytical capabilities people acquire, the more analytically oriented they become.