83 / 2024-04-19 12:51:11

The Strategic Value of Data Analysis in Enhancing Firm Performance: An Empirical Study of the S&P 500

data science, data analytics, firm performance

In the era of big data, the strategic value of data analytics is becoming more and more important to companies. While prior research has explored the value of data analytics capabilities, limited empirical evidence exists on the role of data scientists across different integration phases. We address this gap by analyzing data on data scientist tenure, inflow, and outflow for 351 S&P 500 companies from 2011 to 2019. Employing robust and triangulated methods, we demonstrate that data scientist tenure emerges as a potent predictor of a firm's return on assets (ROA), while IT personnel tenure does not exhibit a similar influence. Further, we categorize companies based on their level of data analytics and integration capabilities (High, Centralized Analytical, Decentralized Analytical, Low). Our findings reveal that data scientist tenure exerts the strongest positive effect on firm performance within the Centralized Analytical stage. This suggests that companies fostering strong business integration capabilities can maximize the value derived from data science talent.  This research contributes to the academic understanding of data analytics' strategic value by empirically validating the critical role of data scientist tenure and integration in enhancing firm performance. Additionally, it offers valuable managerial implications, highlighting the importance of strategic investment in data science talent and cross-functional analytical integration.