The Role of Analytics Orientation on Advanced Analytics Adoption in SMEs (Small and Medium-Sized Enterprises)

SMEs (small and medium-sized enterprises) form the economic fabric of countries around the world and account for about 90 percent of worldwide enterprises and 50 percent of the worldwide workforce. While analytics—a subfield of decision support systems—is essential to the ongoing digital revolution and can significantly improve SME effectiveness, productivity, and performance, SMEs are behind larger companies in their pursuit of digitalization and analytics for competitive advantages. Specifically, even while some SMEs have adopted basic (i.e., descriptive) analytics, the adoption rates of advanced analytics—predictive and/or prescriptive analytics—remain very low. Therefore, in this research, drawing on theoretical foundations from firm orientation and upper echelons research streams, we develop a specific conceptualization of analytics orientation and a theoretical framework involving advanced analytics adoption, analytics orientation, learning orientation, and top executives' knowledge of analytics and perceived importance of analytics. Analyses of data collected from key respondents from 245 SMEs provide general support for our framework. Specifically, we find that (1) analytics orientation influences advanced analytics adoption, (2) the dimensions of learning orientation—commitment to learning, shared vision, and open-mindedness—and upper echelon's knowledge of analytics and perceived importance of analytics help build analytics orientation, and (3) upper echelon's knowledge of analytics and perceived importance of analytics positively moderate the impact of commitment to learning on analytics orientation. We conclude with a discussion of contributions, implications for theory and practice, and limitations.