Data Analytics Capability for Improving Financial Decision-Making and Organizational Performance

Abstract

The fast integration of digital technology has transformed the financial management process and made the capacity to use analytics more important in decision making and organizational performance. Nevertheless, the joint impact of analytics capability, data quality, technology integration, financial decision making, and risk management is still under researched. A quantitative cross-sectional research design with a USA-based online survey of 155 respondents having financial, analytical, technological, and managerial background knowledge was conducted. The data were gathered through a structured survey instrument with five-point Likert scale variables of Data Analytics Capability, Data Quality and Accessibility, Analytical Technology Adoption, Quality of Financial Decision Making, Financial Risk Management Capability, and Organizational Performance. The Financial Decision-Making Quality variable had the highest mean score of 4.21, followed by Data Analytics Capability with a mean score of 4.18 and Organizational Performance with a mean score of 4.16. The Data Analytics Capability variable had strong positive correlations with the Financial Decision-Making Quality variable at r = .746 and with the Organizational Performance variable at r = .693. The Financial Decision-Making Quality variable had the highest value of beta (β) coefficient of .241 followed by the Data Analytics Capability variable with a beta (β) coefficient of .214 and Financial Risk Management Capability with a beta (β) coefficient of .203. The model explained 70.6% of the variance in Organizational Performance. Data analytics capability is an important organizational resource that enhances financial decision-making and organizational performance.