"smes in data-driven era: the role of data to firm performance"

19
Ioannis Kopanakis Ioannis Kopanakis Konstantinos Vassakis Konstantinos Vassakis George Mastorakis George Mastorakis Department of Business Administration Department of Business Administration hnological Educational Institute of Crete hnological Educational Institute of Crete Agios Nikolaos, Crete, Greece Agios Nikolaos, Crete, Greece SMEs in Data-driven SMEs in Data-driven era: the role of data era: the role of data to firm performance to firm performance 9 th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE “Innovation, Entrepreneurship and Digital Ecosystems”

Upload: e-bi-lab

Post on 13-Jan-2017

168 views

Category:

Business


1 download

TRANSCRIPT

Page 1: "SMEs in data-driven era: the role of data to firm performance"

Ioannis KopanakisIoannis KopanakisKonstantinos VassakisKonstantinos Vassakis

George MastorakisGeorge MastorakisDepartment of Business AdministrationDepartment of Business Administration

Technological Educational Institute of CreteTechnological Educational Institute of CreteAgios Nikolaos, Crete, GreeceAgios Nikolaos, Crete, Greece

SMEs in Data-driven era: the role SMEs in Data-driven era: the role of data to firm performanceof data to firm performance

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 2: "SMEs in data-driven era: the role of data to firm performance"

IntroductionKnowledge- Innovation - Performance

2

• The changing customer needs, technological evolutions and the globalized competitive market pressure have transformed the socio-economic environment of enterprises. • Enterprises have to adopt strategies innovation-oriented

in order to build and sustain competitive advantage in the globalized “knowledge – based” economies they operate.• In that extremely changing era, innovation depends on

the combination of technologies and exploitation of knowledge is a vital determinant of enterprises’ success (Daud, 2012).

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 3: "SMEs in data-driven era: the role of data to firm performance"

Data to knowledge

3

• In the era of Industry 4.0, Data has major impact on businesses, since the revolution of networks, platforms, people and digital technology changed the determinants of firms’ innovation and competitiveness (OECD, 2015).• The capacity of enterprises to access information and create

valuable knowledge provides them competitive advantage against rivals in the innovation race (Sarvan et al., 2011).

Source: https://goo.gl/6ciVPo

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 4: "SMEs in data-driven era: the role of data to firm performance"

Data – Driven Innovation (DDI)Knowledge to Innovation

4

• “Data-Driven Innovation” (DDI) -> techniques and technologies for processing and analysing “big data” as the method to innovate using data-based decision process. • DDI’s economic value expecting to be enormous in the

following years and it has the capacity to introduce: new improved products & services, new improved products & services, new improved production processesnew improved production processesbetter organizational managementbetter organizational managementmore efficient R&D more efficient R&D better supply chain management better supply chain management more efficient marketingmore efficient marketing

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 5: "SMEs in data-driven era: the role of data to firm performance"

Big Data

5

• “Big data” -> datasets with large volume that cannot be captured, stored, managed and analysed by typical database software tools (Manyika et al., 2011)• Knowledge arising from the information given from data

analysis processes -> major resource for enterprises to obtain new knowledge, present added value, foster new products, processes and markets. Hence, the ability to manage, analyse and act on data is significant to enterprises.• An asset for enterprises’ indicating the significance of data-

driven approach within enterprises (Microsoft Europe, 2016)

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 6: "SMEs in data-driven era: the role of data to firm performance"

Characteristics of Big DataThe 4Vs of Big data

6

1. Volume: the sizes of data that are extremely huge- measured in exabytes

2. Variety: heterogeneity of data types, 3. Velocity: ratio of data generation and

the speed needed for their analysis. 4. Veracity: data uncertainty and the

level of reliability correlated with some type of data

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 7: "SMEs in data-driven era: the role of data to firm performance"

Significance of Data

7

• Through DDI, almost all the sectors are more service-centred, adopting the term “servicification” (Lodefalk, 2013)

• The exploitation of big data provides enterprises in several industry sectors, not only ICT firms (Tambe, 2014) -> added value through the improvement in resources (physical & human) supervision and allocation, reduction of waste, greater transparency and facilitation of new insights. • Εconomic benefits of big data in UK private and public sector

businesses: increase from £25.1 billion in 2011 to £216 billion in 2017, while data-driven innovationdata-driven innovation will lead to £24,1 billion contribution to UK economy during 2012-2017 (Cebr, 2012) .

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 8: "SMEs in data-driven era: the role of data to firm performance"

Contribution of study

8

• Big data, similar to IT, has the ability to bring significant cost reductions, delivery time, enhanced R&D and new/improved products or services. • However, little evidence exists on ROI for big data

applications in enterprises, showing promising issues (Davenport & Dyché, 2013)

• Empirical evidence related to the impact of data-driven approach and its impact to enterprises performance are scarce and limited mainly in research for large-multinational companies • In addition, no research exists in the impact of big data-driven

approach in innovation performance of SMEs

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 9: "SMEs in data-driven era: the role of data to firm performance"

Significance of study

9

• It is observed growing attention to big data and data-driven approach from academics and professionals, since the analysis of “big data” leads on valuable knowledge, promotion of innovative activity transforming economy of countries (OECD, 2015). • There is evidence that data-driven approach has a positive

impact in enterprises’ performance (Brynjolfsson, 2011; Davenport & Harris, 2007; Lavalle, 2010; Bakhshi et al., 2014). • The scope of this study is to examine the impact of data

exploitation to SMEs innovation performance.

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

Innovation, Entrepreneurship and Digital Ecosystems9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 10: "SMEs in data-driven era: the role of data to firm performance"

Data – driven decisions

10

2 phases of Processes leveraging big data: Data Management Data Management Data AnalysisData Analysis

(Gandomi & Haider, 2014)

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 11: "SMEs in data-driven era: the role of data to firm performance"

Authors Data set Scope Results

Brynjolfsson et al. (2011) 179 large publicly traded firms

Adoption of data-driven decision making approach provide in firm performance

-5-6% higher productivity- better performance in asset utilisation, ROE and market value

McAfee & Brynjolfsson (2012)

330 North American companies

the performance of data-driven companies and whether big data intelligently improves business performance

5% higher production and 6% higher profitability than their rivals

Bakhshi & Mateos-Garcia (2012)

500 UK businesses from various industries operating on-line

2 categories: data-driven decision making enterprises and experience-driven enterprises

Data-driven companies present higher level of innovativeness launching new products and services and making disruptive changes to their business processes

Data-driven performanceImpact in enterprises’ performance

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 12: "SMEs in data-driven era: the role of data to firm performance"

Case Study: Crete, Greece

Enter your footer text here12

Why Crete? •Crete is a Moderate Innovator with relative strengths compared to EU28: Non-R&D innovation exp., Public R&D exp., SMEs marketing or organizational innovations (Regional Innovation Scoreboard, 2016)• 1st in R&D expenditures as a percentage of its GDP /1,35% as National is 0,8% (National Documentation Center, 2015)

Data / Methodology:•80 Small and Medium Enterprises (SMEs)•Personal interviews with C-suite •Period covered: 2011-2014

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 13: "SMEs in data-driven era: the role of data to firm performance"

Data sample

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 14: "SMEs in data-driven era: the role of data to firm performance"

Empirical Results

Enter your footer text here14

Page 15: "SMEs in data-driven era: the role of data to firm performance"

CoefficientsTerm Value StdErr t-value p-value

Data exploitation 0,453398 0,0893987 5,07164 0,0006704

intercept 0,270974 0,302566 0,895588 0,093795Enter your footer text here15

R squared 0,740795

Equation:Turnover increase from

innovation = 0,453398*Data exploitation + 0,270974

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Turnover

Increase

Data – driven decision makingLow Very High

Page 16: "SMEs in data-driven era: the role of data to firm performance"

Findings

16

• Data exploitation by SMEs contributes to their innovation performance and to their performance as a whole.• SMEs with data driven approach in their decision making

are found to be more innovative and present higher performance.• All types of SMEs with higher data-driven orientation

present to be have higher innovation performance contributes positively to their survival and growth.

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 17: "SMEs in data-driven era: the role of data to firm performance"

Conclusions

17

• In the data-driven era, transformed by the rapidly large streams of data generated through ICT and IoT, knowledge originates from big data processes provides the decision makers the capability to innovate and increase their performance gaining a competitive advantage against rivals. • The insights by leveraging big data in innovation

prospects provide a competitive advantage in enterprise through new ways of growth and consumer surplus

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 18: "SMEs in data-driven era: the role of data to firm performance"

Further research• SMEs in national and international level• What happened with the ROI in data-driven processes? • What type of innovation is more possible through data

– driven approach by SMEs? • What are the boundaries of SMEs to adopt data-driven

approach?• Initiatives for developing data-driven approach

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”

Page 19: "SMEs in data-driven era: the role of data to firm performance"

Thank you for your attention

9th ANNUAL EUROMED ACADEMY OF BUSINESS (ΕΜΑΒ) CONFERENCE

“Innovation, Entrepreneurship and Digital Ecosystems”