The Conceptualization of Data-driven Decision Making Capability

We are in the era of big data, and businesses are trying to become more data-driven and increase their decision making efficacy. However, there is little research that explores the dimensions of data-driven decision making (DDDM) capability. The authors analyze existing literature and summarizes four approaches to conceptualizing capabilities: unrelated, unidirectional, entanglement, and mixed. We then discuss the DDDM process and propose a multi-dimension construct of DDDM capability by following the process-based entanglement approach. The DDDM capability is conceptualized as a combination of data governance capability, data analytics capability, insight exploitation capability, performance management capability, and integration capability. Academic and managerial implications are also discussed.