On SAGE Insight: Value creation from big data: Looking inside the black box

From Strategic Organization

The advent of big data is fundamentally changing the business landscape. Increasingly, companies are exploring how big data can be used to create and capture value. ‘Big data is about massive amounts of observational data, of different types, supporting different types of decisions and decision time frames’. The use of big data enables managers both to know fundamentally more about their businesses and to translate that knowledge into better decision-making and improved performance.

Authors in this paper adopted a process-oriented approach in order to understand how firms transform big data to create value. Findings suggest that it is not the data itself, but rather what firms do which leads to value creation. The main outcome and contribution of this work is an inductive process model that not only shows the process of value creation from big data but also sheds insights into the mechanisms that can be used to explain how some firms are better at extracting value from big data than others.

Abstract

The advent of big data is fundamentally changing the business landscape. We open the ‘black box’ of the firm to explore how firms transform big data in order to create value and why firms differ in their abilities to create value from big data. Grounded in detailed evidence from China, the world’s largest digital market, where many firms actively engage in value creation activities from big data, we identify several novel features. We find that it is not the data itself, or individual data scientists, that generate value creation opportunities. Rather, value creation occurs through the process of data management, where managers are able to democratize, contextualize, experiment and execute data insights in a timely manner. We add richness to current theory by developing a conceptual framework of value creation from big data. We also identify avenues for future research and implications for practicing managers.

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Article details
Value creation from big data: Looking inside the black box
Jing Zeng
University of Kent, UK
Keith W. Glaister
University of Warwick, UK
First Published March 14, 2017
DOI: 10.1177/1476127017697510
From Strategic Organization

     
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