EFFECTS OF BUSINESS ANALYTICS CAPABILITIES ON BUDGET GOAL COMMITMENT: THE MEDIATING ROLES OF FORECAST ACCURACY AND BUDGET ADEQUACY

Abstract

Budgeting processes rely on the use of existing data to forecast future activities, identify predictable resource consumption and provision patterns, and facilitate resource allocation decisions. Prior research suggests that business analytics capabilities hold some promise in enabling effective budget processes. However, little empirical research examines the processes by which business analytics capabilities are implicated in budget processes and how they translate into performance. This study aims to examine the relationships among business analytics capabilities and budget goal commitment and explore the intervening roles of forecast accuracy and budget adequacy in these relationships. The study adopts a quantitative strategy to collect data through surveys distributed to a sample of managers working in a cross-section of organizations located in the State of Qatar. Results from partial least squares approach to structural equation modelling fails to show a direct positive relationship between business analytics capabilities and budget goal commitment. However, the effects of business analytics capabilities on budget goal commitment are generated by mediating variables; particularly, forecast accuracy and budget adequacy. The study results make theoretical and practical contributions to enhance our understanding of how the recent development in information technology affects budget processes in organizations. Besides, it demonstrated the significant role of business analytics capabilities in forecast accuracy, budget adequacy, and subsequently, budget goal commitment.