Digital Transformation: Overview

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Digital transยญformยญaยญtion is a chalยญlenge for organisations.

The digitยญal transยญformยญaยญtion chalยญlenge is typยญicยญally shared between the comยญmuยญnicยญaยญtions and IT funcยญtions, but the straยญtegic visยญion and ambiยญtion must stem from the absoยญlute top of the organisation.

Here we go:

About Digital Transformation

Digital transformation is a challenge for organisations.
Digital transยญformยญaยญtion is a chalยญlenge for organisations.
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Digital Transformation

Digital transยญformยญaยญtion is a mulยญtiยญfaยญceted proยญcess drivยญen by advanced digitยญal techยญnoยญloยญgies requirยญing sigยญniยญficยญant organยญisaยญtionยญal change and adaptยญaยญtion. Despite the proยญgress, organยญisaยญtions face numerยญous chalยญlenges, parยญticยญuยญlarly at the iniยญtial stages of transformation.

โ€œDigital transยญformยญaยญtion is an ongoยญing proยญcess using new digitยญal techยญnoยญloยญgies, with agilยญity as the core mechยญanยญism for straยญtegic renewยญal of an organยญizยญaยญtionโ€™s busiยญness modยญel, colยญlabยญorยญatยญive approach, and culยญture.โ€œ
Source: Long Range Planning 1Warner, K., & Wรคger, M. (2019). Building dynamยญic capยญabยญilยญitยญies for digitยญal transยญformยญaยญtion: An ongoยญing proยญcess of straยญtegic renewยญal. Long Range Planning. โ€ฆ Continue readยญing

Technological Drivers and Enablers

Digital techยญnoยญloยญgies such as mobile, AI, cloud, blockยญchain, and IoT (to name a few) can enable sigยญniยญficยญant busiยญness improveยญments, enhanยญcing cusยญtomยญer experยญiยญence, streamยญlinยญing operยญaยญtions, and creยญatยญing new busiยญness modยญels. 2Warner, K., & Wรคger, M. (2019). Building dynamยญic capยญabยญilยญitยญies for digitยญal transยญformยญaยญtion: An ongoยญing proยญcess of straยญtegic renewยญal. Long Range Planning. โ€ฆ Continue readยญing 3Rogers, D., & Euchner, J. (2022). Digital Transformation. Research-Technology Management, 65, 11โ€‰โ€”โ€‰17. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹8โ€‹0โ€‹/โ€‹0โ€‹8โ€‹9โ€‹5โ€‹6โ€‹3โ€‹0โ€‹8โ€‹.โ€‹2โ€‹0โ€‹2โ€‹2โ€‹.โ€‹2โ€‹0โ€‹9โ€‹5โ€‹759 4Yaqub, M., & Alsabban, A. (2023). Industryโ€‘4.0โ€‘Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. โ€ฆ Continue readยญing

Industry 4.0 techยญnoยญloยญgies are key drivers of digitยญal transยญformยญaยญtion, enhanยญcing comยญpetยญitยญiveยญness through envirยญonยญmentยญal and social susยญtainยญabยญilยญity, corยญporยญate growth, and supยญply chain integยญraยญtion. 5Yaqub, M., & Alsabban, A. (2023). Industryโ€‘4.0โ€‘Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. โ€ฆ Continue readยญing

Organizational Adaptation and Change

Digital transยญformยญaยญtion moves organยญisaยญtions towards flexยญible designs that enable conยญtinuยญous adaptยญaยญtion, drivยญen by digitยญal busiยญness ecoยญsysยญtems. 6Hanelt, A., Bohnsack, R., Marz, D., & Antunes, C. (2020). A Systematic Review of the Literature on Digital Transformation: Insights and Implications for Strategy and Organizational โ€ฆ Continue readยญing

It is an ongoยญing proยญcess requirยญing agilยญity for straยญtegic renewยญal of busiยญness modยญels, colยญlabยญorยญatยญive approaches, and organยญizยญaยญtionยญal culยญture. 7Warner, K., & Wรคger, M. (2019). Building dynamยญic capยญabยญilยญitยญies for digitยญal transยญformยญaยญtion: An ongoยญing proยญcess of straยญtegic renewยญal. Long Range Planning. โ€ฆ Continue readยญing

Strategic Responses and Dynamic Capabilities

Organizations must develยญop dynamยญic capยญabยญilยญitยญies to manยญage the disยญrupยญtions caused by digitยญal techยญnoยญloยญgies and alter their value creยญation paths. 8Vial, G. (2019). Understanding digitยญal transยญformยญaยญtion: A review and a research agenda. J. Strateg. Inf. Syst., 28, 118โ€‰โ€“โ€‰144. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹1โ€‹6โ€‹/โ€‹Jโ€‹.โ€‹Jโ€‹Sโ€‹Iโ€‹Sโ€‹.โ€‹2โ€‹0โ€‹1โ€‹9โ€‹.โ€‹0โ€‹1โ€‹.โ€‹003

Building dynamยญic capยญabยญilยญitยญies involves recogยญnizยญing and respondยญing to trigยญgers, enabling factors, and barยญriยญers withยญin the organยญizยญaยญtion. 9Warner, K., & Wรคger, M. (2019). Building dynamยญic capยญabยญilยญitยญies for digitยญal transยญformยญaยญtion: An ongoยญing proยญcess of straยญtegic renewยญal. Long Range Planning. โ€ฆ Continue readยญing

Challenges and Managerial Implications

Firms face sigยญniยญficยญant chalยญlenges at the beginยญning of their digitยญal transยญformยญaยญtion efforts, includยญing culยญturยญal resยญistยญance and the need for new manaยญgeriยญal guidยญance. 10Schneider, S., & Kokshagina, O. (2021). Digital transยญformยญaยญtion: What we have learned (thus far) and what is next. Creativity and Innovation Management. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹1โ€‹1โ€‹1โ€‹/โ€‹Cโ€‹Aโ€‹Iโ€‹Mโ€‹.โ€‹1โ€‹2โ€‹414

There is a need for a uniยญfied definยญiยญtion of digitยญal transยญformยญaยญtion to provide conยญcepยญtuยญal rigยญor and guide both researchยญers and pracยญtiยญtionยญers. 11Gong, C., & Ribiรจre, V. (2021). Developing a uniยญfied definยญiยญtion of digitยญal transยญformยญaยญtion. Technovation, 102, 102217. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹1โ€‹6โ€‹/โ€‹jโ€‹.โ€‹tโ€‹eโ€‹cโ€‹hโ€‹nโ€‹oโ€‹vโ€‹aโ€‹tโ€‹iโ€‹oโ€‹nโ€‹.โ€‹2โ€‹0โ€‹2โ€‹0โ€‹.โ€‹1โ€‹0โ€‹2โ€‹217 12Mergel, I., Edelmann, N., & Haug, N. (2019). Defining digitยญal transยญformยญaยญtion: Results from expert interยญviews. Gov. Inf. Q., 36. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹1โ€‹6โ€‹/โ€‹Jโ€‹.โ€‹Gโ€‹Iโ€‹Qโ€‹.โ€‹2โ€‹0โ€‹1โ€‹9โ€‹.โ€‹0โ€‹6โ€‹.โ€‹002

Future Research Directions

There is a call for more pracยญtice-oriยญented research to address the remainยญing chalยญlenges and explore new themes in digitยญal transformation.

Future research should focus on examinยญing the role of dynamยญic capยญabยญilยญitยญies and ethยญicยญal issues in digitยญal transยญformยญaยญtion. 13Schneider, S., & Kokshagina, O. (2021). Digital transยญformยญaยญtion: What we have learned (thus far) and what is next. Creativity and Innovation Management. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹1โ€‹1โ€‹1โ€‹/โ€‹Cโ€‹Aโ€‹Iโ€‹Mโ€‹.โ€‹1โ€‹2โ€‹414

Learn more: Digital Transformation: Overview

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Key Drivers for Digital Transformation

To understand digital transformation, we must identify its key drivers.
To underยญstand digitยญal transยญformยญaยญtion, we must identiยญfy its key drivers.
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Key Drivers for Digital Transformation

Digital transยญformยญaยญtion is a sigยญniยญficยญant develยญopยญment impactยญing variยญous aspects of busiยญness and sociยญety. Understanding the key drivers behind this transยญformยญaยญtion is cruยญcial for organยญisaยญtions aimยญing to stay comยญpetยญitยญive and innovative. 

Below are insights from mulยญtiple research papers on the key drivers of digitยญal transformation.

Key Drivers

  • Industry 4.0 techยญnoยญloยญgies. Technologies such as IoT, AI, big data, and cloud comยญputยญing are primary enaยญblers of digitยญal transยญformยญaยญtion, enhanยญcing comยญpetยญitยญiveยญness, susยญtainยญabยญilยญity, and innovยญaยญtion in busiยญness pracยญtices and modยญels. 14Yaqub, M., & Alsabban, A. (2023). Industryโ€‘4.0โ€‘Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. โ€ฆ Continue readยญing 15Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9โ€‰โ€”โ€‰13. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹8โ€‹0โ€‹/โ€‹0โ€‹7โ€‹3โ€‹6โ€‹6โ€‹9โ€‹8โ€‹1โ€‹.โ€‹2โ€‹0โ€‹2โ€‹0โ€‹.โ€‹1โ€‹8โ€‹4โ€‹7โ€‹813 16Feroz, A., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹3โ€‹3โ€‹9โ€‹0โ€‹/โ€‹Sโ€‹Uโ€‹1โ€‹3โ€‹0โ€‹3โ€‹1โ€‹530
  • Big data and anaยญlytยญics. Big data and anaยญlytยญics are freยญquently cited as sigยญniยญficยญant drivers, enabling busiยญnesses to make informed decisions, optimยญize operยญaยญtions, and innovยญate. 17Figueiredo, R., Soares, R., & Ferreira, J. (2020). Key Strategic Drivers for Business Digital Transformation. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹4โ€‹0โ€‹1โ€‹8โ€‹/โ€‹978โ€‰โ€“โ€‰1โ€‘7998โ€‰โ€“โ€‰4552โ€‘2.ch006 18Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9โ€‰โ€”โ€‰13. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹8โ€‹0โ€‹/โ€‹0โ€‹7โ€‹3โ€‹6โ€‹6โ€‹9โ€‹8โ€‹1โ€‹.โ€‹2โ€‹0โ€‹2โ€‹0โ€‹.โ€‹1โ€‹8โ€‹4โ€‹7โ€‹813 19Bresciani, S., Huarng, K., Malhotra, A., & Ferraris, A. (2021). Digital transยญformยญaยญtion as a springยญboard for product, proยญcess and busiยญness modยญel innovยญaยญtion. Journal of Business Research, 128, โ€ฆ Continue readยญing
  • Innovation and new busiยญness modยญels. Digital transยญformยญaยญtion is drivยญen by the need for innovยญaยญtion and the develยญopยญment of new busiยญness modยญels, such as XaaS (Anything as a Service), which leverยญage advanced techยญnoยญloยญgies to creยญate comยญpetยญitยญive advantยญages. 20Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9โ€‰โ€”โ€‰13. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹8โ€‹0โ€‹/โ€‹0โ€‹7โ€‹3โ€‹6โ€‹6โ€‹9โ€‹8โ€‹1โ€‹.โ€‹2โ€‹0โ€‹2โ€‹0โ€‹.โ€‹1โ€‹8โ€‹4โ€‹7โ€‹813 21Bresciani, S., Huarng, K., Malhotra, A., & Ferraris, A. (2021). Digital transยญformยญaยญtion as a springยญboard for product, proยญcess and busiยญness modยญel innovยญaยญtion. Journal of Business Research, 128, โ€ฆ Continue readยญing
  • Environmental susยญtainยญabยญilยญity. The push for envirยญonยญmentยญal susยญtainยญabยญilยญity is a sigยญniยญficยญant driver across variยญous indusยญtries, influยญenยญcing the adopยญtion of digitยญal techยญnoยญloยญgies to improve effiยญciency and reduce envirยญonยญmentยญal impact. 22Lammers, T., Tomidei, L., & Regattieri, A. (2018). What Causes Companies to Transform Digitally? An Overview of Drivers for Australian Key Industries. 2018 Portland International Conference โ€ฆ Continue readยญing 23Feroz, A., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹3โ€‹3โ€‹9โ€‹0โ€‹/โ€‹Sโ€‹Uโ€‹1โ€‹3โ€‹0โ€‹3โ€‹1โ€‹530
  • Operational effiยญciency and finยญanยญcial incluยญsion: In the finยญanยญcial secยญtor, digitยญal transยญformยญaยญtion is drivยญen by the need for operยญaยญtionยญal effiยญciency and finยญanยญcial incluยญsion, parยญticยญuยญlarly by adoptยญing digitยญal payยญments and othยญer innovยญatยญive finยญanยญcial techยญnoยญloยญgies. 24Mavlutova, I., Spilbergs, A., Verdenhofs, A., Natrins, A., Arefjevs, I., & Volkova, T. (2022). Digital Transformation as a Driver of the Financial Sector Sustainable Development: An Impact on โ€ฆ Continue readยญing
  • Customer interยญacยญtion and experยญiยญence. Enhancing cusยญtomยญer interยญacยญtion and experยญiยญence through digitยญal chanยญnels and techยญnoยญloยญgies is a critยญicยญal driver, reshapยญing how busiยญnesses engage with their cusยญtomยญers. 25Mihu, C., Pitic, A., & Bayraktar, D. (2023). Drivers of Digital Transformation and their Impact on Organizational Management. Studies in Business and Economics, 18, 149โ€‰โ€”โ€‰170. โ€ฆ Continue readยญing 26Klein, M. (2020). DIGITAL TRANSFORMATION IN BUSINESSES AND ITS DRIVERS. Journal of Business in The Digital Age. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹4โ€‹6โ€‹2โ€‹3โ€‹8โ€‹/โ€‹jโ€‹oโ€‹bโ€‹dโ€‹aโ€‹.โ€‹7โ€‹2โ€‹9โ€‹499
  • Competitive presยญsure and marยญket demand. The need to stay comยญpetยญitยญive and meet marยญket demands is a strong motivยญatยญor for busiยญnesses to adopt digitยญal transยญformยญaยญtion strategies. 27Mihu, C., Pitic, A., & Bayraktar, D. (2023). Drivers of Digital Transformation and their Impact on Organizational Management. Studies in Business and Economics, 18, 149โ€‰โ€”โ€‰170. โ€ฆ Continue readยญing 28Klein, M. (2020). DIGITAL TRANSFORMATION IN BUSINESSES AND ITS DRIVERS. Journal of Business in The Digital Age. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹4โ€‹6โ€‹2โ€‹3โ€‹8โ€‹/โ€‹jโ€‹oโ€‹bโ€‹dโ€‹aโ€‹.โ€‹7โ€‹2โ€‹9โ€‹499

These drivers colยญlectยญively push organยญisaยญtions to embrace digitยญal transยญformยญaยญtion to stay relยญevยญant and thrive in the digitยญal age.

Learn more: Key Drivers for Digital Transformation

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The Digital Transformation Hierarchy

The digital transformation hierarchy.
The digitยญal transยญformยญaยญtion hierarchy.
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The Digital Transformation Hierarchy

Itโ€™s not just about stayยญing alive in the digitยญal spaceโ€‰โ€”โ€‰itโ€™s about thrivยญing, leadยญing, and transยญformยญing the industry around you. The digitยญal transยญformยญaยญtion jourยญney isnโ€™t a straight lineโ€‰โ€”โ€‰itโ€™s a series of stages, each buildยญing on the last. 

5 Stages of Digital Transformation

The transยญformยญaยญtion starts with the basic needs and works towards industry leadยญerยญship and innovation.

  • Stage 1: Foundation /โ€‹ Structure & Security.
  • Stage 2: Stability /โ€‹ Operational Development.
  • Stage 3: Engagement /โ€‹ Content & Community.
  • Stage 4: Differentiation /โ€‹ Datadriven Adaptations.
  • Stage 5: Innovation /โ€‹ Industry Leadership.

Assess where you curยญrently stand on this path and use it as a guide to move forward. 

About Digital Transformation

โ€œDigital transยญformยญaยญtion is an ongoยญing proยญcess using new digitยญal techยญnoยญloยญgies, with agilยญity as the core mechยญanยญism for straยญtegic renewยญal of an organยญizยญaยญtionโ€™s busiยญness modยญel, colยญlabยญorยญatยญive approach, and culยญture.โ€œ
Source: Long Range Planning 29Warner, K., & Wรคger, M. (2019). Building dynamยญic capยญabยญilยญitยญies for digitยญal transยญformยญaยญtion: An ongoยญing proยญcess of straยญtegic renewยญal. Long Range Planning. โ€ฆ Continue readยญing

Learn more: The Digital Transformation Hierarchy

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ANNOTATIONS
ANNOTATIONS
1, 2, 7, 9, 29 Warner, K., & Wรคger, M. (2019). Building dynamยญic capยญabยญilยญitยญies for digitยญal transยญformยญaยญtion: An ongoยญing proยญcess of straยญtegic renewยญal. Long Range Planning. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹1โ€‹6โ€‹/โ€‹Jโ€‹.โ€‹Lโ€‹Rโ€‹Pโ€‹.โ€‹2โ€‹0โ€‹1โ€‹8โ€‹.โ€‹1โ€‹2โ€‹.โ€‹001
3 Rogers, D., & Euchner, J. (2022). Digital Transformation. Research-Technology Management, 65, 11โ€‰โ€”โ€‰17. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹8โ€‹0โ€‹/โ€‹0โ€‹8โ€‹9โ€‹5โ€‹6โ€‹3โ€‹0โ€‹8โ€‹.โ€‹2โ€‹0โ€‹2โ€‹2โ€‹.โ€‹2โ€‹0โ€‹9โ€‹5โ€‹759
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11 Gong, C., & Ribiรจre, V. (2021). Developing a uniยญfied definยญiยญtion of digitยญal transยญformยญaยญtion. Technovation, 102, 102217. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹1โ€‹6โ€‹/โ€‹jโ€‹.โ€‹tโ€‹eโ€‹cโ€‹hโ€‹nโ€‹oโ€‹vโ€‹aโ€‹tโ€‹iโ€‹oโ€‹nโ€‹.โ€‹2โ€‹0โ€‹2โ€‹0โ€‹.โ€‹1โ€‹0โ€‹2โ€‹217
12 Mergel, I., Edelmann, N., & Haug, N. (2019). Defining digitยญal transยญformยญaยญtion: Results from expert interยญviews. Gov. Inf. Q., 36. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹1โ€‹6โ€‹/โ€‹Jโ€‹.โ€‹Gโ€‹Iโ€‹Qโ€‹.โ€‹2โ€‹0โ€‹1โ€‹9โ€‹.โ€‹0โ€‹6โ€‹.โ€‹002
15, 18, 20 Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9โ€‰โ€”โ€‰13. https://โ€‹doiโ€‹.org/โ€‹1โ€‹0โ€‹.โ€‹1โ€‹0โ€‹8โ€‹0โ€‹/โ€‹0โ€‹7โ€‹3โ€‹6โ€‹6โ€‹9โ€‹8โ€‹1โ€‹.โ€‹2โ€‹0โ€‹2โ€‹0โ€‹.โ€‹1โ€‹8โ€‹4โ€‹7โ€‹813
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Jerry Silfwer
Jerry Silfwerhttps://doctorspin.net/
Jerry Silfwer, alias Doctor Spin, is an awarded senior adviser specialising in public relations and digital strategy. Currently CEO at Spin Factory and KIX Communication Index. Before that, he worked at Kaufmann, Whispr Group, Springtime PR, and Spotlight PR. Based in Stockholm, Sweden.
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The Cover Photo

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The cover photo has

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