THE ROLE OF DATA-DRIVEN DECISION MAKING IN ENHANCING RETURN ON INVESTMENT (ROI) AND SALES PERFORMANCE: AN EMPIRICAL STUDY.

Abstract

As digital technologies become more widespread, organisations are using data in new and exciting ways, for strategic and operational decision making. Data-Driven Decision Making (DDDM) is one of the most important business competencies in the use of data analytics, business intelligence and predictive models to optimize the performance of the organization (Davenport & Harris, 2017; Wamba et al., 2020). This study is designed to explore how DDDM can improve Return on Investment (ROI) and Sales Performance in organizations. The research is designed to explore how DDDM relates to ROI and how sales performance relates to the research, as well as how the analytics capability relates to organizational effectiveness. The study employed a quantitative approach and primary data was gathered from 340 respondents consisting of marketing professionals, sales managers, business analysts, data analysts, and employees of SMEs and corporate organizations. A structured questionnaire using Google Forms was used to collect data with a 5-point Likert Scale to measure it. The data were processed by using SPSS and SEM techniques and then analyzed statistically by using correlation analysis, multiple regression analysis and Structural Equation Modeling (SEM). The results showed that there was a very high positive correlation of DDDM with ROI (r = 0.712) and DDDM with Sales Performance (r = 0.685). The results of regression analysis showed that DDDM was able to significantly predict the sales performance (β = 0.512, p < 0.001), and the result of SEM showed the positive effect of DDDM on ROI and Sales Performance. Moreover, it was found that analytics capability positively impacts organizational performance by enhancing the quality of decision making and optimizing the use of organizational resources (Mikalef et al., 2020). The authors' findings indicate that companies with data-driven approaches are well equipped to benefit from the financial results, sales growth and sustainable competitive advantage. The results offer important insights for managers aiming to leverage analytics to create value for their business.