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Digital Transformation: Overview

Staying competitive in a wired world.

Jerry Silfwer
by Jerry Silfwer

Cover photo: @jerrysilfwer

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Digital trans­form­a­tion is a chal­lenge for organisations.

The digit­al trans­form­a­tion chal­lenge is typ­ic­ally shared between the com­mu­nic­a­tions and IT func­tions, but the stra­tegic vis­ion and ambi­tion must stem from the abso­lute top of the organisation.

Here we go:

Digital Transformation

Digital trans­form­a­tion is a mul­ti­fa­ceted pro­cess driv­en by advanced digit­al tech­no­lo­gies requir­ing sig­ni­fic­ant organ­isa­tion­al change and adapt­a­tion. Despite the pro­gress, organ­isa­tions face numer­ous chal­lenges, par­tic­u­larly at the ini­tial stages of transformation.

Digital transformation is a challenge for organisations.
Digital trans­form­a­tion is a chal­lenge for organisations.

“Digital trans­form­a­tion is an ongo­ing pro­cess using new digit­al tech­no­lo­gies, with agil­ity as the core mech­an­ism for stra­tegic renew­al of an organ­iz­a­tion’s busi­ness mod­el, col­lab­or­at­ive approach, and cul­ture.“
Source: Long Range Planning 1Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​L​R​P​.​2​0​1​8​.​1​2​.​001

Technological Drivers and Enablers

Digital tech­no­lo­gies such as mobile, AI, cloud, block­chain, and IoT (to name a few) can enable sig­ni­fic­ant busi­ness improve­ments, enhan­cing cus­tom­er exper­i­ence, stream­lin­ing oper­a­tions, and cre­at­ing new busi­ness mod­els. 2Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. â€¦ Continue read­ing 3Rogers, D., & Euchner, J. (2022). Digital Transformation. Research-Technology Management, 65, 11 — 17. https://​doi​.org/​1​0​.​1​0​8​0​/​0​8​9​5​6​3​0​8​.​2​0​2​2​.​2​0​9​5​759 4Yaqub, M., & Alsabban, A. (2023). Industry‑4.0‑Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. â€¦ Continue read­ing

Industry 4.0 tech­no­lo­gies are key drivers of digit­al trans­form­a­tion, enhan­cing com­pet­it­ive­ness through envir­on­ment­al and social sus­tain­ab­il­ity, cor­por­ate growth, and sup­ply chain integ­ra­tion. 5Yaqub, M., & Alsabban, A. (2023). Industry‑4.0‑Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. â€¦ Continue read­ing

Organizational Adaptation and Change

Digital trans­form­a­tion moves organ­isa­tions towards flex­ible designs that enable con­tinu­ous adapt­a­tion, driv­en by digit­al busi­ness eco­sys­tems. 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 â€¦ Continue read­ing

It is an ongo­ing pro­cess requir­ing agil­ity for stra­tegic renew­al of busi­ness mod­els, col­lab­or­at­ive approaches, and organ­iz­a­tion­al cul­ture. 7Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. â€¦ Continue read­ing

Strategic Responses and Dynamic Capabilities

Organizations must devel­op dynam­ic cap­ab­il­it­ies to man­age the dis­rup­tions caused by digit­al tech­no­lo­gies and alter their value cre­ation paths. 8Vial, G. (2019). Understanding digit­al trans­form­a­tion: A review and a research agenda. J. Strateg. Inf. Syst., 28, 118 – 144. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​J​S​I​S​.​2​0​1​9​.​0​1​.​003

Building dynam­ic cap­ab­il­it­ies involves recog­niz­ing and respond­ing to trig­gers, enabling factors, and bar­ri­ers with­in the organ­iz­a­tion. 9Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. â€¦ Continue read­ing

Challenges and Managerial Implications

Firms face sig­ni­fic­ant chal­lenges at the begin­ning of their digit­al trans­form­a­tion efforts, includ­ing cul­tur­al res­ist­ance and the need for new mana­geri­al guid­ance. 10Schneider, S., & Kokshagina, O. (2021). Digital trans­form­a­tion: What we have learned (thus far) and what is next. Creativity and Innovation Management. https://​doi​.org/​1​0​.​1​1​1​1​/​C​A​I​M​.​1​2​414

There is a need for a uni­fied defin­i­tion of digit­al trans­form­a­tion to provide con­cep­tu­al rig­or and guide both research­ers and prac­ti­tion­ers. 11Gong, C., & Ribière, V. (2021). Developing a uni­fied defin­i­tion of digit­al trans­form­a­tion. Technovation, 102, 102217. https://​doi​.org/​1​0​.​1​0​1​6​/​j​.​t​e​c​h​n​o​v​a​t​i​o​n​.​2​0​2​0​.​1​0​2​217 12Mergel, I., Edelmann, N., & Haug, N. (2019). Defining digit­al trans­form­a­tion: Results from expert inter­views. Gov. Inf. Q., 36. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​G​I​Q​.​2​0​1​9​.​0​6​.​002

Future Research Directions

There is a call for more prac­tice-ori­ented research to address the remain­ing chal­lenges and explore new themes in digit­al transformation.

Future research should focus on examin­ing the role of dynam­ic cap­ab­il­it­ies and eth­ic­al issues in digit­al trans­form­a­tion. 13Schneider, S., & Kokshagina, O. (2021). Digital trans­form­a­tion: What we have learned (thus far) and what is next. Creativity and Innovation Management. https://​doi​.org/​1​0​.​1​1​1​1​/​C​A​I​M​.​1​2​414

Learn more: Digital Transformation: Overview

Key Drivers for Digital Transformation

Digital trans­form­a­tion is a sig­ni­fic­ant devel­op­ment impact­ing vari­ous aspects of busi­ness and soci­ety. Understanding the key drivers behind this trans­form­a­tion is cru­cial for organ­isa­tions aim­ing to stay com­pet­it­ive and innovative. 

To understand digital transformation, we must identify its key drivers.
To under­stand digit­al trans­form­a­tion, we must identi­fy its key drivers.

Below are insights from mul­tiple research papers on the key drivers of digit­al transformation.

Key drivers for digital transformation
  • Industry 4.0 tech­no­lo­gies. Technologies such as IoT, AI, big data, and cloud com­put­ing are primary ena­blers of digit­al trans­form­a­tion, enhan­cing com­pet­it­ive­ness, sus­tain­ab­il­ity, and innov­a­tion in busi­ness prac­tices and mod­els. 14Yaqub, M., & Alsabban, A. (2023). Industry‑4.0‑Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. â€¦ Continue read­ing 15Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9 — 13. https://​doi​.org/​1​0​.​1​0​8​0​/​0​7​3​6​6​9​8​1​.​2​0​2​0​.​1​8​4​7​813 16Feroz, A., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability. https://​doi​.org/​1​0​.​3​3​9​0​/​S​U​1​3​0​3​1​530
  • Big data and ana­lyt­ics. Big data and ana­lyt­ics are fre­quently cited as sig­ni­fic­ant drivers, enabling busi­nesses to make informed decisions, optim­ize oper­a­tions, and innov­ate. 17Figueiredo, R., Soares, R., & Ferreira, J. (2020). Key Strategic Drivers for Business Digital Transformation. https://​doi​.org/​1​0​.​4​0​1​8​/​978 – 1‑7998 – 4552‑2.ch006 18Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9 — 13. https://​doi​.org/​1​0​.​1​0​8​0​/​0​7​3​6​6​9​8​1​.​2​0​2​0​.​1​8​4​7​813 19Bresciani, S., Huarng, K., Malhotra, A., & Ferraris, A. (2021). Digital trans­form­a­tion as a spring­board for product, pro­cess and busi­ness mod­el innov­a­tion. Journal of Business Research, 128, â€¦ Continue read­ing
  • Innovation and new busi­ness mod­els. Digital trans­form­a­tion is driv­en by the need for innov­a­tion and the devel­op­ment of new busi­ness mod­els, such as XaaS (Anything as a Service), which lever­age advanced tech­no­lo­gies to cre­ate com­pet­it­ive advant­ages. 20Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9 — 13. https://​doi​.org/​1​0​.​1​0​8​0​/​0​7​3​6​6​9​8​1​.​2​0​2​0​.​1​8​4​7​813 21Bresciani, S., Huarng, K., Malhotra, A., & Ferraris, A. (2021). Digital trans­form­a­tion as a spring­board for product, pro­cess and busi­ness mod­el innov­a­tion. Journal of Business Research, 128, â€¦ Continue read­ing
  • Environmental sus­tain­ab­il­ity. The push for envir­on­ment­al sus­tain­ab­il­ity is a sig­ni­fic­ant driver across vari­ous indus­tries, influ­en­cing the adop­tion of digit­al tech­no­lo­gies to improve effi­ciency and reduce envir­on­ment­al 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 â€¦ Continue read­ing 23Feroz, A., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability. https://​doi​.org/​1​0​.​3​3​9​0​/​S​U​1​3​0​3​1​530
  • Operational effi­ciency and fin­an­cial inclu­sion: In the fin­an­cial sec­tor, digit­al trans­form­a­tion is driv­en by the need for oper­a­tion­al effi­ciency and fin­an­cial inclu­sion, par­tic­u­larly by adopt­ing digit­al pay­ments and oth­er innov­at­ive fin­an­cial tech­no­lo­gies. 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 â€¦ Continue read­ing
  • Customer inter­ac­tion and exper­i­ence. Enhancing cus­tom­er inter­ac­tion and exper­i­ence through digit­al chan­nels and tech­no­lo­gies is a crit­ic­al driver, reshap­ing how busi­nesses engage with their cus­tom­ers. 25Mihu, C., Pitic, A., & Bayraktar, D. (2023). Drivers of Digital Transformation and their Impact on Organizational Management. Studies in Business and Economics, 18, 149 — 170. â€¦ Continue read­ing 26Klein, M. (2020). DIGITAL TRANSFORMATION IN BUSINESSES AND ITS DRIVERS. Journal of Business in The Digital Age. https://​doi​.org/​1​0​.​4​6​2​3​8​/​j​o​b​d​a​.​7​2​9​499
  • Competitive pres­sure and mar­ket demand. The need to stay com­pet­it­ive and meet mar­ket demands is a strong motiv­at­or for busi­nesses to adopt digit­al trans­form­a­tion strategies. 27Mihu, C., Pitic, A., & Bayraktar, D. (2023). Drivers of Digital Transformation and their Impact on Organizational Management. Studies in Business and Economics, 18, 149 — 170. â€¦ Continue read­ing 28Klein, M. (2020). DIGITAL TRANSFORMATION IN BUSINESSES AND ITS DRIVERS. Journal of Business in The Digital Age. https://​doi​.org/​1​0​.​4​6​2​3​8​/​j​o​b​d​a​.​7​2​9​499

These drivers col­lect­ively push organ­isa­tions to embrace digit­al trans­form­a­tion to stay rel­ev­ant and thrive in the digit­al age.

Learn more: Key Drivers for Digital Transformation

The Digital Transformation Hierarchy

Drawing inspir­a­tion from Maslow’s hier­archy of needs, I’ve broken down the pur­suit of digit­al matur­ity into five dis­tinct stages. 

The digital transformation hierarchy.
The digit­al trans­form­a­tion hierarchy.

Just as humans start by meet­ing basic needs and pro­gress towards self-ful­fil­ment, busi­nesses must meet found­a­tion­al digit­al needs before reach­ing their full digit­al potential.

The 5 Stages of Digital Transformation

The trans­form­a­tion starts with the basic needs and works towards industry lead­er­ship and innovation.

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

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

About Digital Transformation

“Digital trans­form­a­tion is an ongo­ing pro­cess using new digit­al tech­no­lo­gies, with agil­ity as the core mech­an­ism for stra­tegic renew­al of an organ­iz­a­tion’s busi­ness mod­el, col­lab­or­at­ive approach, and cul­ture.“
Source: Long Range Planning 29Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​L​R​P​.​2​0​1​8​.​1​2​.​001

Learn more: The Digital Transformation Hierarchy

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Annotations
Annotations
1, 29 Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​L​R​P​.​2​0​1​8​.​1​2​.​001
2, 7, 9 Warner, K., & Wäger, M. (2019). Building dynam­ic cap­ab­il­it­ies for digit­al trans­form­a­tion: An ongo­ing pro­cess of stra­tegic renew­al. Long Range Planning. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​L​R​P​.​2​0​1​8​.​1​2​.​001
3 Rogers, D., & Euchner, J. (2022). Digital Transformation. Research-Technology Management, 65, 11 — 17. https://​doi​.org/​1​0​.​1​0​8​0​/​0​8​9​5​6​3​0​8​.​2​0​2​2​.​2​0​9​5​759
4, 5, 14 Yaqub, M., & Alsabban, A. (2023). Industry‑4.0‑Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies. Sustainability. https://​doi​.org/​1​0​.​3​3​9​0​/​s​u​1​5​1​1​8​553
6 Hanelt, A., Bohnsack, R., Marz, D., & Antunes, C. (2020). A Systematic Review of the Literature on Digital Transformation: Insights and Implications for Strategy and Organizational Change. Journal of Management Studies. https://​doi​.org/​1​0​.​1​1​1​1​/​J​O​M​S​.​1​2​639
8 Vial, G. (2019). Understanding digit­al trans­form­a­tion: A review and a research agenda. J. Strateg. Inf. Syst., 28, 118 – 144. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​J​S​I​S​.​2​0​1​9​.​0​1​.​003
10, 13 Schneider, S., & Kokshagina, O. (2021). Digital trans­form­a­tion: What we have learned (thus far) and what is next. Creativity and Innovation Management. https://​doi​.org/​1​0​.​1​1​1​1​/​C​A​I​M​.​1​2​414
11 Gong, C., & Ribière, V. (2021). Developing a uni­fied defin­i­tion of digit­al trans­form­a­tion. Technovation, 102, 102217. https://​doi​.org/​1​0​.​1​0​1​6​/​j​.​t​e​c​h​n​o​v​a​t​i​o​n​.​2​0​2​0​.​1​0​2​217
12 Mergel, I., Edelmann, N., & Haug, N. (2019). Defining digit­al trans­form­a­tion: Results from expert inter­views. Gov. Inf. Q., 36. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​G​I​Q​.​2​0​1​9​.​0​6​.​002
15, 18, 20 Tang, D. (2021). What is Digital Transformation. EDPACS, 64, 9 — 13. https://​doi​.org/​1​0​.​1​0​8​0​/​0​7​3​6​6​9​8​1​.​2​0​2​0​.​1​8​4​7​813
16 Feroz, A., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability. https://​doi​.org/​1​0​.​3​3​9​0​/​S​U​1​3​0​3​1​530
17 Figueiredo, R., Soares, R., & Ferreira, J. (2020). Key Strategic Drivers for Business Digital Transformation. https://​doi​.org/​1​0​.​4​0​1​8​/​978 – 1‑7998 – 4552‑2.ch006
19, 21 Bresciani, S., Huarng, K., Malhotra, A., & Ferraris, A. (2021). Digital trans­form­a­tion as a spring­board for product, pro­cess and busi­ness mod­el innov­a­tion. Journal of Business Research, 128, 204 – 210. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​J​B​U​S​R​E​S​.​2​0​2​1​.​0​2​.​003
22 Lammers, T., Tomidei, L., & Regattieri, A. (2018). What Causes Companies to Transform Digitally? An Overview of Drivers for Australian Key Industries. 2018 Portland International Conference on Management of Engineering and Technology (PICMET), 1 – 8. https://​doi​.org/​1​0​.​2​3​9​1​9​/​P​I​C​M​E​T​.​2​0​1​8​.​8​4​8​1​810
23 Feroz, A., Zo, H., & Chiravuri, A. (2021). Digital Transformation and Environmental Sustainability: A Review and Research Agenda. Sustainability. https://​doi​.org/​1​0​.​3​3​9​0​/​S​U​1​3​0​3​1​530
24 Mavlutova, 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 Financial Inclusion and Operational Efficiency. Sustainability. https://​doi​.org/​1​0​.​3​3​9​0​/​s​u​1​5​0​1​0​207
25, 27 Mihu, C., Pitic, A., & Bayraktar, D. (2023). Drivers of Digital Transformation and their Impact on Organizational Management. Studies in Business and Economics, 18, 149 — 170. https://​doi​.org/​1​0​.​2​4​7​8​/​s​b​e​-​2​023 – 0009
26, 28 Klein, M. (2020). DIGITAL TRANSFORMATION IN BUSINESSES AND ITS DRIVERS. Journal of Business in The Digital Age. https://​doi​.org/​1​0​.​4​6​2​3​8​/​j​o​b​d​a​.​7​2​9​499
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 Whispr Group NYC, Springtime PR, and Spotlight PR. Based in Stockholm, Sweden.

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