Marcos Paulo Valadares de Analytics in healthcare: technology alone is not enough!

Oliveira et al.

DECISION SCIENCES INSTITUTE

Analytics in healthcare: technology alone is not enough!

(Full Paper Submission)

Marcos P. V. Oliveira, Universidade Federal do Espírito Santo, marcos.p.oliveira@ufes.br

Salma Haidar, Central Michigan University, haida1s@cmich.edu
Kevin McCormack, Northwood University, mccormac@northwood.edu
Claudia X. Cavalcanti, Universidade Federal do Espírito Santo,claudiaxc.andrade@terra.com.br

ABSTRACT

Because of its nature, healthcare industry is populated by highly educated and trained
personnel, suggesting that their analytical capabilites are high. But does this translate into
effective business analytics use in the supply chain? Using the Information Processing Theory, a
model was developed to evaluate analytics in healthcare. A survey instrument was distributed to
healthcare employees and structural Equation model was used to examine model’s
relationships. It was found that healthcare industry is very prepared for decision making
analytics. Additionally, leadership actively implementing Analytics Orientation was a key to
impacting process innovation showing that technology alone is not enough.

KEYWORDS: Analytics; Performance; Process Innovation

INTRODUCTION

Decades ago, when companies started to invest in Information Technology (IT), several studies
emerged in order to better understand about the payback of such investments. While many of
them found out little convincing evidence that investments in IT generate positive financial
returns and leverage on the value of the firm (Cron & Sobol, 1983; Jonscher, 1983; Kauffman &
Weill, 1989; Lucas, 1975; Roach, 1988; Turner, 1983; Weill, 1992), others argue IT structure
must be aligned with human capabilities in order to produce competitive advantage (Powell &
Dent-Micallef, 1997; Venkatraman, Henderson, & Oldach, 1993).

Particularly, and considering the aggregation of a myriad of sectors within the health care
industry either in the US or worldwide, IT payoff has long been a subject of intense discussion
and results have been far from conclusive (Devaraj & Kohli, 2000). At the same time, within this
complex industry (but not restricted to it) the impact of technology on nonfinancial outcomes
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(e.g. customer satisfaction and service quality) is gaining interest. As observed by Devaraj and
Kohli (Devaraj & Kohli, 2000), in the context of technology investments, while technology and
organizational practices (or capabilities) may have separate impacts on performance, the two
together may affect performance significantly.

Healthcare organizations may face pressure from a wide range of sources (e.g. providers,
health plans or health insurance firms, government regulatory requirements, and massive
operational costs, amongst others), being simultaneously forced to continually improve their
operational effectiveness, to develop and implement better processes and best practices, and to
provide crescent quality goods and health services.

Yet despite these enormous demands, healthcare organizations face also some particular and
idiosyncratic restrictions, i.e. industry players, funding, public policy, technology, customers and
accountability. Such restrictions are characteristic of a sector in which innovators encounter
numerous barriers and are required to deal with many forces that negatively affect innovation
efforts (Herzlinger, 2006). In order to react to such context, as healthcare organizations continue
striving to enhance quality of care, promote better services and reduce cost, they are also
incentivized to strategically use its massive data storages putting in place and analytical
approach, looking for early pattern recognition and predictive analysis.
Considering specially this context under healthcare organizations operates, we argue that since
Business Analytics (BA) is being shown as an effective alternative for organizations to make
decisions and take actions that would be almost impossible otherwise (T. H. Davenport & Harris,
2007), companies are investing significant amounts on BA technology (Kiron, Prentice, &
Ferguson, 2014) but not exploiting enough from it, specially considering process innovation
(Cokins, 2013).

This paper is grounded on the idea that technology alone is not enough (Powell & Dent-Micallef,
1997; Venkatraman et al., 1993; Weill, 1992). We argue that companies must align the
investment and development of analytical human capabilities (Xu & Kim, 2014) with analytical IT
(Thomas H. Davenport, 2006; Sircar, 2009) in order to take advantage of BA by boosting both
process innovation and overall performance. In this sense, the conceptual model that we
develop and test in this paper draws upon information processing theory (IPT) (Galbraith, 1973,
1974).

Regarding the IPT, the basic function of any organization is to create an appropriate
configuration of processes, structure and information technology to facilitate the collection,
processing, exchange and distribution of information (Galbraith, 1973). Based on IPT,
performance results are conditioned to the alignment of information processing requirements
with information processing capabilities (Daft & Lengel, 1986; Galbraith, 1973). This study
grounds on IPT purposing that organizations with more process innovation and better
performance are those that better fits its organization’s ability to handle information and the
required information (Egelhoff, 1982; Galbraith, 1974).

The central objective in our research was to describe and measure the effects of analytical
information technology and analytical human capabilities over process innovation and overall
performance of a sample of U.S. healthcare organizations. By accessing relevant information
regarding the extensive use of BA information technology and the sowing of analytical skills and
certain leadership characteristics among those organizations, we intended to test if both BA
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information technology and BA human capabilities would positively impact (in a paired
perspective) not only process innovation, but also the overall business performance and
customer satisfaction results for those companies.

The rest of the paper is organized as follows: it begins by defining business analytics and its
human and technological aspects as well contextualizing BA in Healthcare. Next the
hypothetical model is presented describing the relationship between BA both process innovation
and overall performance. Further the methodology and data analysis are presented and the
hypothetical model is tested. Finally, conclusion and discussion about the results are offered
pointing out potential contributions to the IS and strategic management literature.

Business Analytics

Business analytics (BA) includes repetitive actions in the collection, treatment, and use of data
on business processes or a supply chain. BA can be directed to several goals such as greater
effectiveness of organizations in describing their reality (i.e., descriptive analytics), analysis of
junctures and problems (i.e., diagnostic analytics), predicting future results based on present
decisions or actions (i.e., predictive analytics), and prescription of best practices for scenarios or
company actions (i.e., prescriptive analytics) (T. H. Davenport & Harris, 2007).

It is accepted that the implementation of BA solutions by an organization indicates that it

recognizes the importance of a culture of measurement in business and developing capabilities,
whether to measure customer preferences or interact with consumers more deeply.

The scope of applications for these solutions is extremely varied, including minimizing process
costs, improving assertiveness in predictive models, and growing market share, among others
(Kiron, Ferguson, & Prentice, 2013; Kiron et al., 2014). BA applications explore data to discover
new patterns and relationships among them, or use quantitative analyses to explain why results
occur.

Equally important, BA solutions contribute to an organization’s repository of knowledge of similar

effects concerning business decisions, or to predicting future results by means of models in
which simulations take on special importance in competitive scenarios marked by growing
competition and turbulence (Schläfke, Silvi, & Möller, 2013). Therefore, BA solutions should be
taken as a critical and essential movement if firms decide to identify data patterns, anticipate
events, and optimize responses to stimuli and information from the business environment. Also,
there is a growing recognition that those traits will constitute bases for competition in the future
(Thomas H. Davenport, 2006, 2013; Trkman, McCormack, de Oliveira, Ladeira, & Oliveira,
2010).

Analytical Human Capabilities

In this study, we define Analytical Human Capability as the ability to discover useful intelligence
and incorporate it in decision-making and daily operations (Xu & Kim, 2014) based on Analytical
Skills and Analytical Leadership.

Analytical Skills refers to a manager’s ability to use logical and scientific approaches to analyze
problems and confront the business or to identify business opportunities (Goodman, Ladzani,
Bates, de Vries, & Botha, 2005). Davenport and Harris (T. H. Davenport & Harris, 2007)
Marcos Paulo Valadares de Analytics in healthcare: technology alone is not enough!
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positioned analytical skills as the first action step for organizations, in order to obtain analytical
competition, they used the expression “Begin to build analytical skills”, which means that it’s
often difficult to find individuals with some important requisites like quantitative and business
skills. He has also mentioned that organizations should start looking for these requisites as soon
as possible, and hire them in sufficient volume to create “critical mass.”

Analytical Skills enable companies to build predictive models, discover patterns, conduct query,
create reports, etc. It is worth emphasizing that business users should also have certain degree
of analytics knowledge. It helps them to create their own intelligence when needed. Such
technical knowledge can also help them appreciate and interpret analytics results.

Briceland (Briceland, 1981) stated in his survey that analytical skill is the ability to visualize,
articulate, and solve both complex and uncomplicated problems and concepts and make
decisions that are based on available information. Such skills include demonstration of the
ability to apply logical employees involved in a BA environment should deliver the right
information and right knowledge to the right people at the right time. They emphasize that
competence profiles are not individuals, but roles. One employee may well fulfill several roles.
For example, a data miner will typically be statistically knowledgeable and able to take on two
roles or competence areas. For example, an IT-oriented person may well have business
thinking to gathering and analyzing information, designing and testing solutions to problems,
and formulating plans (Laursen & Thorlund, 2010).

Analytical Leadership refers to the posture, support and use of BA by decision makers.
Regarding Davenport and Harris (T. H. Davenport & Harris, 2007), the most difficult factor to put
in place in analytical competition is the support from senior executives. They argue that
organizations should begin to reverse this trait by finding an executive partner and embarking
with him or her on some analytical initiatives. Authors also argue that the adoption of a broad
analytical approach to business requires changes in culture, process, behavior, and skills for
multiple employees. Such changes don’t occur by accident; they must be led by senior
executives with a passion for analytics and fact-based decision making. Ideally, the primary
advocate should be the CEO, and indeed we found several chief executives who were driving
the shift to analytics at their firms. Without the push from the top, it’s rare to find a firm making
the cultural changes necessary to become an analytical competitor.

According to Poon and Wagner (Poon & Wagner, 2001), most studies recognize the importance
of an executive sponsor who is both sufficiently committed to the system to invest time and
effort in guiding its development, and has a realistic understanding of the capabilities and
limitations of the system. To leverage the time of the executive sponsor, it is necessary to have
an operating sponsor designated to manage the details of implementation from the user’s side.
This sponsor should be well acquainted with the executive sponsor’s way of working.

Analytical Information Technology

In this study, we define Analytical Information Technology as the IT structural resources

available in an organization to support BA based on Information Quality and Information
Technology.

Davenport and Harris (T. H. Davenport & Harris, 2007) described Analytical Technology, arguing
that organizations need heavy-duty hardware and software to do serious analytical work.
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Competing on analytics means competing on technology and while the most serious
competitors investigate the latest statistical algorithms and decision science approaches, they
also constantly monitor and push the IT frontier. For competing on analytics with analytical
technology it is necessary to have Data Strategy, Business Intelligence Software and
Computing Hardware.

About Information Quality, Davenport and Harris (T. H. Davenport & Harris, 2007) used the
expression “get your data in shape” as an action step for organizations in order to become an
analytical competitor. They mention that analytical environments require large amounts of high-
quality data and that it’s necessary to figure out what sort of data organizations really need to
advance their strategies and make sure it’s being gathered, and clean it up.

Tayi and Ballou (Tayi & Ballou, 1998) argue that the term “quality of data” can best be defined as
“fitness for use,” which implies that one needs to look beyond traditional concerns with the
accuracy of the data. An example can be data found in accounting-type systems may be
accurate but unfit for use if that data is not timely. Also, personnel databases situated in different
divisions of a company may be correct but unfit for use if the desire is to combine the two and
they have incompatible formats. In fact, the capability of judging the reasonableness of the data
is lost when users have no responsibility for the data’s integrity and when they are removed
from the gatherers. Such problems are becoming increasingly critical as organizations
implement data warehouses.

Business Analytics in Healthcare

Because of its nature, the Healthcare industry is populated by highly educated and trained
personnel. This would imply that their analytical capabilites are high. They are also know as
inovative regarding healthcare diagnoses and treatment. The questions is: does this translate to
effective business analytics use in the supply chain?

Healthcare organizations are also very decentralized. Medical teams are acting somewhat
independently when treating patients. Support functions are looked upon differently than in other
business segments. Are the organizational factors that influence the impact of BA on SC
performance relevant in Healthcare?

Finally, non medical leadership in healthcare is primarily advisory, facilitating and budget
management. Can Healthcare leadership create an environment that stimulates BA usage? The
question of leadership involvement and support may not be impactful in Healthcare.

THEORETICAL DEVELOPMENT/MODEL

Business Analytics and Process Innovation

The literature on innovation distinguishes between product innovation and process innovation
(Utterback & Abernathy, 1975). For Damanpour and Gopalakrishna (Damanpour &
Gopalakrishnan, 2001), organizational factors and attributes of the innovation influence the
adoptions of product and process innovations. Organization’s interest in quality control, for
example, may motivate the organization to improve efficiencies and therefore emphasize the
adoption of process innovations over product innovations at a point of time. On the other hand,
an organization may be motivated to increase market share, winning customer loyalty, and
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Oliveira et al.

staying ahead of competition, and therefore may focus product innovation over process
innovations.

It is clear that organizations need to innovate in response to changing customer demands and
lifestyles and in order to capitalize on opportunities offered by technology and changing
marketplaces, structures and dynamics (Baregheh, Rowley, & Sambrook, 2009). To identify and
develop innovative and more-valuable services, companies like UPS, Bosch, ADMS, Schneider
Electric and General Electric are focusing heavily on business analytics (Thomas H Davenport,
2013).

Process innovation can be conceptualized as a change in the way a product is made or a

service is provided (Robey, 1986; Zmud, 1982), introducing new methods, procedures or
responsibilities, including new skills, and requiring new ways of managing and organizing
(Robey, 1986). The basis for the theoretical relationship between business analytics and
process innovation can be found in various literature streams, including business process
redesign (Thomas H. Davenport, 1992; Reijers & Limanmansar, 2005; Tarafdar & Gordon,
2007).

Innovation is the multi-stage process whereby organizations transform ideas into new/improved
products, service or processes, in order to advance, compete and differentiate themselves
successfully in their marketplace. However, innovation may involve a wide range of different
types of change depending on the organization’s resources, capabilities, strategies, and
requirements (Baregheh et al., 2009). In any case, however, as stressed by Tarafdar and
Gordon (Tarafdar & Gordon, 2007), the role of information systems and technologies in
supporting process innovation can be found in different literature streams. Along with product
innovation, Khazanchi et. al. (Khazanchi, Lewis, & Boyer, 2007) describe process innovation as
a critical source of sustainable competitive advantage. By stressing the organizational culture
and values as a key to managing innovation, reflected in a consistent pattern of behaviors and
cognitive environment within organizations, Khazanchi et. al. (Khazanchi et al., 2007) argue that
by means of process innovation firms can more easily meet or even drive market demands, and
dramatic enhance organizational efficiency and responsiveness over time.

Considering the rule of BA on process innovation, as well its importance in providing insights
and new ideas, we propose:

H1a: Analytical Information Technology, measured by Information Quality and Analytical

Technology, impacts positively companies’ Process Innovation.

H1b: Analytical Human Capabilities, measured by Analytical Skills and Analytical Leadership,
impacts positively companies’ Process Innovation.

Business Analytics and Performance

The empirical relationship between business analytics and overall performance was already
proven as significant (Bronzo et al., 2013; Thomas H. Davenport, 2013; Khan, 2013; Klatt,
Schlaefke, & Moeller, 2011; Schläfke et al., 2013; Trkman, Ladeira, Oliveira, & McCormack,
2011; Trkman et al., 2010) but how Analytical Human Resources and Analytical Information
Technology combined impact over process innovation specifically remains unclear.
Marcos Paulo Valadares de Analytics in healthcare: technology alone is not enough!
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There is a growing acceptance that business analytics is becoming one crucial component of
todays and future sustainable competitive advantage for firms and supply chains, fostering the
dissemination of a wide array of best practices and information technology investments.
Especially in the context of health care sector, involving a myriad of actors with distinct needs
(patients, doctors, insurance companies, governmental authorities, service and goods providers,
amongst others), the growing recognition of business analytics potential is somehow expected
(Mettler & Vimarlund, 2008). The positive impact of business analytics may well not be limited to
enhance and facilitate clinical decision making process, but also to improve governance and
manage needs and demands of many internal or external actors (e.g. other care institutions,
insurance companies, doctors, controllers, wards, government, patients, and others).

Also, it is not surprising that the extensive utilization of business analytics in healthcare
organizations may impact, at the very end of a macroprocess (in a supply chain perspective),
the customer satisfaction, or the customer´s perception of the value received, whereas this is
related to his or her perception of an service quality improvement or a favorable service
perception relatively to the price of such services, or any other tangible or intangible factor.

Considering the potential effect of BA on overall performance, including customer satisfaction,

we propose:

H2a: Analytical Information Technology, measured by Information Quality and Analytical

Technology, impacts positively companies’ Performance.

H2b: Analytical Human Capabilities, measured by Analytical Skills and Analytical Leadership,
impacts positively companies’ Performance.

Figure 1: Research model

Marcos Paulo Valadares de Analytics in healthcare: technology alone is not enough!
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RESEARCH METHOD

Sample and procedures

In order to test the hypothetical model a survey was conducted by means of a questionnaire
organizing the construct indicators extracted from the literature review with a five-point scale.
The questionnaire was also refined by a group of professionals and researchers in the field.

The data for this study were drawn from healthcare professional provided by the Institute of
Health and Business Insight (IHBI) mailing list at Central Michigan University (CMU).

A survey monkey questionnaire was sent to 500 people from the IHBI data base, but the
response rate was very small with only 9 subjects responding. A follow up reminder was sent
out and an additional 7 subjects responded for a total of 16 responses. The suvey was then sent
to 180 subjects with a mailing address inviting them to complete the questionnaire either online
or on paper. Twelve subjects mailed the questionnaire back on paper, and 5 more completed it
online. The total sample was 35 usable responses with response rate of 7%.

The questionnaire consisted of 15 questions that focused on several topics including analytical
skills, analytical technology, quality of information, analytical leadership, and process innovation.
For complete survey see Appendix 1.

RESULTS

Descriptive Results

The majority of the respondents (88%) stated that their organization was a hospital or clinic and
only 12% stated that it is an insurance company (12/35 did not answer this question). When
asked about the respondents’ function in the organization, 39.4% stated that they were analysts,
36.4% were administrators, and 21.2% were managers. Job titles included 35.3% executives,
26.5 % team member, 23.5% manager, and 14.7% senior manager.

Analytical skills:

Most respondents (82.3%) indicated that they agree or strongly agree when asked “Your
organization hires employees with ability to quickly learn how to use software applications”. This
confirms the fact that Healthcare organizations hire very capable people due to the nature of
their business. The majority (70.6%) disagreed or strongly disagreed when asked “Your
organization certifies that managers have the ability to approach business problems with
scientific methods”.

Analytical Technology:

More than half of the respondents (53%) indicated that they agreed or strongly agreed on the
question “Your organization properly invests in integrated technology information systems (ex:
ERP, CRM, etc.)”. The majority of respondents 85.2% agreed or strongly agreed that “Your
organization has software that properly allows employees to use data for analysis (ex: reports,
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scorecards, alerts, etc.)”. The percentage of those who agreed or strongly agreed was 73.6%
when asked “Your organization properly invests to improve the capacity of computers and
servers, enabling the organization to process larger amounts of data quickly” and 76.4% when
asked “Your organization properly provides general support (ex: train the users) when
implementing new information systems”. Such results evidences that technology capability is
very high in Healthcare.

Information Quality

When asked if “Your organization’s data is complete (sufficient breadth and depth for task at
hand)”, the responses were 54.6% agreed or strongly agreed, 30.3% disagreed or strongly
disagreed, and 15.2% were neutral. More than two third of the respondents agreed or strongly
agreed that “Your organization’s data is reliable”. However, 23.5% were neutral. The responses
for “Your organization’s data is concise (compactly represented)” were interesting. Half of the
respondents either disagreed or strongly disagreed, 14.7% were neutral, and only 35.3%
agreed. None of the responded strongly agreed. Most respondents (84.8%) agreed or strongly
agreed that “Your organization’s data is up to date”.

Analytical Leadership

The results for “The senior executives of your organization are focused on fact-based decision
making”, “Your organization has executives investing time and effort guiding the development of
expert systems that solve complex problems”, and “The cultural changes in your organization
are pushed from the Top (Senior Executives)” were almost identical. For all questions 58.8% of
respondents either agreed or strongly agreed. Those who answered neutral were 23.5%,
20.6%, and 32.4% respectively.

Process Innovation

Participants were asked to assess the relative performance of their organization against the
major competitors in their industry with regards to the following: (1 – behind, 3 – comparable, 5
– leader). There were four questions asked. “The technological competitiveness of our company
is”. About half (47.1%) of respondents agreed that it is comparable, 25.5% and 11.8% thought it
is ahead or far ahead respectively, and 11.8% and 2.9% responded that it is behind or far
behind, respectively. “The speed with which we adopt the latest technological innovations in our
processes is”. More than half (55.9%) stated that it was comparable, 26.5% thought it was
behind, and 14.7% and 2.9% responded as ahead or far ahead respectively. “The update level
of the technology used in our processes is”. Again, more than half (58.8%) of respondents
agreed that it is comparable, 14.7% thought it is behind, and 23.5% and 2.9% stated that it is
ahead or far ahead, respectively. “The rate of change in our processes, techniques and
technology is”. Once again, 55.9% of respondents agreed that it is comparable, 20.6% decided
it is behind, and 17.6% and 5.9% decided it is either ahead or far ahead, respectively.

Organizational Performance

The last set of questions asked participants to: “Please rate the overall performance of your
business unit last year”. The responses were as follows: 2.9% poor, 32.4% medium, 44.1%
good, and 20.6% excellent. “Please rate the customer satisfaction rating of your business unit
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last year”. None of the respondents thought it is poor. However, 2.9% stated it is very poor,
20.6% medium, 50% good, and 26.5% excellent.

Scale validity and reliability – Evaluation of Measurement Models

In order to evaluate both the measurement and structural models, PLS (Partial Least Squares)
was used along with the SmartPLS 3.0 software (Ringle, Wende, & Becker, 2014). As a first
step, since the model and the items of the questionnaire were built to have all measurement
models as reflective, the scales were subjected into internal consistency reliability evaluation by
using both Cronbach’s Alpha and Composite Reliability. As suggested by Hair et al. (Hair Jr,
Hult, Ringle, Sarstedt, & Hair, 2014), considering Cronbach’s limitations in the population,
Composite Reliability should be also considered. As can be observed (Table 1), all scores were
considered satisfactory since their Composite Reliability were higher than 0.6 and lower than
0.95.

In order to access the convergent validity, the average variance extracted (AVE) were
considered and all values were higher than 0.5 demonstrating that constructs explains more
than half of the variance of its indicators (Table 1).

Table 1
Scale validity and reliability
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Later, in order to conclude the evaluation of the measurement models, discriminant validity was
accessed by considering the cross loadings of the each construct’s indicators and the Fornell-
Larcker criterion (Hair Jr et al., 2014). Both assessments indicated discriminant validity for the
measurement models.

Figure 2: Research model – Results

Looking at path coefficients of the model (Figure 2), it can be noticed that Technology is a
valuable resource but Information Quality must be also considered. This result suggests that it
doesn’t matter if a company has a good analytical technology if the information quality isn’t good
– garbage in/garbage out. In addition, looking at the AHC coefficients, the results show that
Skills plays a critical role but Leadership is even more important. This is no surprise since
leading by example in business analytics is well understood to be a key factor. Fact-based
decision-making, expert systems and pushing cultural changes are part of this variable and
make a large impact on the “Analytical Human Capabilities” variable. Moreover, AHC were
proven to be more important to leverage Process Innovation than AIT. By the opposite, when
Performance is considered, AIT was proved to influence more than AHC.

Evaluation of the Structural Model

Once the construct measures were confirmed as reliable and valid, the next step of the analysis
involved the assessment of the structural model results by examining the model’s predictive
capabilities and the relationships between the constructs (Hair Jr et al., 2014).
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First step was to access collinearity by computing the tolerance and the variance inflation factor
(VIF). For the scores gathered from the regression tests, all VIFs were all lower than 5. It can be
concluded that collinearity does not reach critical levels and is not an issue for the estimation of
the PLS path model.

After to evaluate the significance of the relationships by running bootstrap procedure with 5000
subsamples (Table 2), in the next step was necessary to analyze the R 2 values of the model’s
endogenous latent variables. As can be depicted from Figure 2, results showed a moderate R 2
for both Performance (0.437) and Process Innovation (0.397).

Table 2
Path Coefficients and bootstrapping test

Looking at table 2 it is possible to verify that none of the constructs related to Analytical
Information Technology were proven to be significant to Process Innovation. Such results,
again, sustain the idea that technology is not enough. Especially considering process
innovation, analytical human capabilities plays a key role.

Further, to access the predictive relevance of the path model the blindfolding procedure was
used with an omission distance of 7 points. Regarding Hair et al. (Hair Jr et al., 2014), Stone-
Geisser’s Q2 value using cross-validated redundancy for latent variables Performance (Q 2 =
0.301) and Process Innovation (Q2 = 0.292) demonstrated that the model has predictive
relevance since Q2 scores were higher than 0.

Final assessments address the f2 and q2 effects sizes for both AHC and AIT over Process
Innovation and Performance. The results can be seen on Table 3, below.

Table 3
f2 and q2 effects sizes
Effects f2 q2
AIT => Performance 0.302 0.190
AIT => Process Innovation 0.061 0.038
AHC => Performance 0.160 0.099
AHC => Process Innovation 0.363 0.242
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The f2 effect aims to identify whether an omission of the antecedent construct has a substantive
impact on the endogenous construct. As can be observed at Table 3, the effect of the omission
of AHC over Performance can be considered medium but the effect over Process Innovation
scored as large (Hair Jr et al., 2014). Also, omission of AIT represents a higher effect over
Performance (0.302 – medium) than over Process Innovation (0.061 – small). By taking a
similar approach for q2 effects sizes it can be noticed that AHC has more predictive relevance
for Process Innovation (0.242 – medium) than for Performance (0.099 – small), while AIT has
more predictive relevance for Performance (0.190 – medium) than for Process Innovation
(0.038 – small).

CONCLUSIONS

This research is important because it helps establish a baseline on the level of pervasive
adoption of the use of BA in this industry. Since the Healthcare industry has only recently
adopted pervasive health information technology, it is likely to experience an explosion in the
availability of data for analysis. Determining the current development level will allow policy
makers, researchers, and industry professionals to learn from other industries and anticipate the
potential barriers and opportunities BA presents.

The research makes it clear that investments in BA information technology are secondary to
human capabilities, especially when considering the aims to leverage process innovation. Such
investments but must be in synch to make a difference on both process innovation and
performance. Most efforts should focus on improving capabilities first, with resources lagging
slightly. In addition, the use of analytical output or models to help the alignment of BA
information technologies and human capabilities is a critical factor in realizing improvements in
both process innovation and performance. Putting the combination of analytical information
technologies and analytical human capabilities together to focus on linked analytical objectives
is critical to successful efforts.

What this research also points out is that if leaders in an organization demonstrate support for
analytics, the organization’s adoption of information capabilities will be accelerated. Conversely,
when leaders fail to promote analytics, the effectiveness of its efforts will be less.

Several other conclusions have evolved. For one, although capable, Healthcare industry is not
yet performing analytics to full potential. The low response rate is one evidence of that. It is very
possible that those who did not respond to the survey are those who do not perform anlytics in
their institutions. However, it appears the Healthcare industry is enthusiastically accepting IT
and they feel they have good leadership and investments in place. It is clear that the ingredient
of human resources capabilities is key to the impact of analytics on both process innovation and
performance. Therefore, anaytics must be implemented by an actively involved leadership. Not
only support, as is often the case, but active use and requests for analytically produce ouput
and decsions. This seems to be the key variable making analytics impact performance and
innovation.

Acknowledgments
The authors would like to thank FAPES for the financial support and Tim Pletcher from CMU
and the participants from the IHBI.
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APPENDIX
Items used and its respective codes
Marcos Paulo Valadares de Analytics in healthcare: technology alone is not enough!
Oliveira et al.