Transform to Succeed: An Empirical Analysis of Digital Transformation in Firms

Authors: Sarah E. Stief, Anne Theresa Eidhoff, Markus Voeth

Abstract:

Despite all progress firms are facing the increasing need to adapt and assimilate digital technologies to transform their business activities in order to pursue business development. By using new digital technologies, firms can implement major business improvements in order to stay competitive and foster new growth potentials. The corresponding phenomenon of digital transformation has received some attention in previous literature in respect to industries such as media and publishing. Nevertheless, there is a lack of understanding of the concept and its organization within firms. With the help of twenty-three in-depth field interviews with German experts responsible for their company’s digital transformation, we examined what digital transformation encompasses, how it is organized and which opportunities and challenges arise within firms. Our results indicate that digital transformation is an inevitable task for all firms, as it bears the potential to comprehensively optimize and reshape established business activities and can thus be seen as a strategy of business development.

Keywords: Business development, digitalization, digital strategies, digital transformation.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1124445

References:

[1] R. Kohli and S. Devaraj, “Measuring information technology payoff: A meta-analysis of structural variables in firm-level empirical research,” Information systems research, vol. 14, no. 2, pp.127-145, 2003.
[2] N. Melville, K. Kraemer, and R. Gurbaxani, “Review: Information technology and organisational performance: An integrative model of IT business value,” MIS Quarterly, vol. 28, no. 2, pp. 283-322, 2004.
[3] A. Bharadwaj, O. A. El Sawy, P. A. Pavlou, and N. Venkatraman, “Digital business strategy: toward a next generation of insights,” MIS Quarterly, vol. 37, no. 2, pp. 471-482, 2013.
[4] S. De Haes, and W. Van Grembergen, “An exploratory study into IT governance implementations and its impact on business/IT alignment,” Information Systems Management, vol. 26, no.2, pp. 123-137, 2009.
[5] V. Sambamurthy, and R. W. Zmud, “Research commentary: The organizing logic for an enterprise's IT activities in the digital era—A prognosis of practice and a call for research,” Information Systems Research, vol. 11, no. 2, pp. 105-114, 2000.
[6] F. Damanpour, and J. D. Wischnevsky, “Research on innovation in organizations: Distinguishing innovation-generating from innovation-adopting organizations,” Journal of Engineering and Technology Management, vol. 23, no. 4, pp. 269-291, 2006.
[7] G. Seeger, and M. Bick, “Mega and Consumer Trends–Towards Car-Independent Mobile Applications,” in Proc. 12th International Conference on Mobile Business (ICMB), Berlin, 2013, p. 27.
[8] M.G. Aboelmaged, “Predicting e-readiness at firm-level: An analysis of technological, organizational and environmental (TOE) effects on e-maintenance readiness in manufacturing firms,” International Journal of Information Management, vol. 34, no. 5, pp. 639–651, 2014.
[9] L. Downes, and P. F. Nunes, “Big-bang disruption,” Harvard Business Review, vol. 91, no. 3, pp. 44-56, 2013.
[10] D. Nylén, and J. Holmström, “Digital Innovation Strategy: A Framework for Diagnosing and Improving Digital Product and Service Innovation,” Business Horizons, vol. 58, no. 1, pp. 57–67, 2015.
[11] R. Amit and C. Zott “Value Creation in E-Business,” Strategic Management Journal, vol. 22, no. 6-7, pp. 493–520, 2001.
[12] C. S. Lee, “An analytical framework for evaluating e-commerce business models and strategies,” Internet Research, vol. 11, no. 4, pp. 349-359, 2001.
[13] J.F. Schrape, „The change of bookselling by digitalization and internet“, original title: “Der Wandel des Buchhandels durch Digitalisierung und Internet.“ Discussion Paper in: Stuttgarter Beiträge zur Organisations- und Innovationsforschung, University of Stuttgart, Germany, 2011.
[14] Y. Yoo, R. J. Boland Jr., K. Lyytinen, and A. Majchrzak, “Organizing for innovation in the digitized world,” Organization Science, vol. 23, no. 5, pp. 1398-1408, 2012.
[15] C. Matt, T. Hess, and A. Benlian, “Digital Transformation Strategies.” Business and Information Systems Engineering, vol. 57, no. 5, pp. 339-343, 2015.
[16] M. L. Markus, “Technochange management: using IT to drive organizational change,” Journal of Information Technology, vol. 19, no. 1, pp. 4-20, 2004.
[17] M. Iansiti, and K.R. Lakhani, “Digital Ubiquity: How Connections, Sensors, and Data Are Revolutionizing Business,” Harvard Business Review, vol. 92, no. 11, pp. 90–99, 2014.
[18] E. Piccinini, R. W. Gregory, and L. M. Kolbe, “Changes in the Producer-Consumer Relationship - Towards Digital Transformation”, in Proc. 12th International Conference of Information Systems, Osnabrück, 2015, pp. 1634-1648.
[19] M. Fitzgerald, N. Kruschwitz, D. Bonnet, and M. Welch, “Embracing digital technology: A new strategic imperative,” MIT Sloan Management Review, vol. 55, no. 2, pp. 1-14, 2013.
[20] S. Mithas, A. Tafti, and W. Mitchell, “How a Firm's Competitive Environment and Digital Strategic Posture Influence Digital Business Strategy,” MIS Quarterly, vol. 37, no. 2, pp. 511-536, 2013.
[21] G. Westerman, C. Calméjane, D. Bonnet, P. Ferraris, and A. McAfee, “Digital Trans-formation: A Roadmap for Billion-Dollar Organizations,” 2011. Retrieved from: https://www.capgemini.com/resource-file-access/ resource/pdf/Digital_Transformation__A_Road-Map_for_Billion-Dollar_Organizations.pdf (visited on 11/05/2015).
[22] S.J. Berman, “Digital Transformation: Opportunities to Create New Business Models,” Strategy & Leadership, vol. 40, no. 2, pp. 16–24, 2012.
[23] R.B. Cooper, “Information Technology Development Creativity: A Case Study of at-tempted Radical Change,” MIS Quarterly, vol. 24, no. 2, pp. 245-276, 2000.
[24] G. Piccoli, Information Systems for Managers: Texts and Cases, Hoboken, NJ: John Wiley and Sons, 2007.
[25] D.Q. Chen, M. Mocker, and D.S. Preston, “Information Systems Strategy: Reconceptualization, Measurement, and Implications,” MIS Quarterly, vol. 34, no. 2, pp. 233-259, 2010.
[26] Y. E. Chan, and S. L. Huff, “Strategy: an information systems research perspective,” The Journal of Strategic Information Systems, vol. 1, no. 4, pp. 191-204, 1992.
[27] O. A. El Sawy, A. Malhotra, Y. Park, and P. A. Pavlou, “Research Commentary-Seeking the Configurations of Digital Ecodynamics: It Takes Three to Tango,” Information Systems Research, vol. 21, no. 4, pp. 835-848, 2010.
[28] V. Lorenzi, and H.E. Sørensen, “Business development capability: insights from the biotechnology industry,” Symphonya. Emerging Issues in Management, vol. 2, pp. 45–60, 2014.
[29] M. Voeth, J. Poelzl, and A.T. Eidhoff, “It’s all about growth – an empirical status report of business development,” International Journal of Entrepreneurship and Innovation Management, in press.
[30] M. Coester, C. J. Petri, and F. Nilsson, “The hen or the egg?: IT innovations’ influence on business strategy,” in Proc. 21th Nordic Academy of Management Conference, Stockholm, 2011, pp. 1-18.
[31] E. Brynjolfsson, and L.M. Hitt, “Beyond Computation: Information Technology, Organisational Transformation and Business Performance,” Journal of Economic Perspectives, vol. 14, no. 4, pp. 23–48, 2000.
[32] G. Piccoli, and B. Ives, “Review: IT-dependent strategic initiatives and sustained competitive advantage: a review and synthesis of the literature,” MIS Quarterly, vol. 29, no. 4, pp. 747-776, 2005.
[33] B. Carlsson, M. Coester, P. Fryk, M. Kollberg-Thomassen, B. Rapp, and Å. Rehn, “European industrial transformation - the effects of digitization,” in Proc. 13th Swedish Network for European Studies in Economics and Business Conference, Mölle, 2011, pp. 1-41.
[34] S. Berman, and A. Marshall, "Reinventing the rules of engagement: three strategies for winning the information technology race," Strategy & Leadership, vol. 42, no.4, pp. 22-32, 2014.
[35] S.C. Voelpel, M., Leibold, and E.B. Tekie, “The Wheel of Business Model Reinvention: How to Reshape Your Business Model and Organizational Fitness to Leapfrog Competitors,” Journal of Change Management, vol. 4, no. 3, pp. 1–39, 2004.
[36] G. Garrison, “An Assessment of Organizational Size and Sense and Response Capability on the Early Adoption of Disruptive Technology,” Computers in Human Behavior, vol. 25, no. 2, pp. 444–449, 2009.
[37] B.W. Wirtz, O. Schilke, and S. Ullrich, “Strategic Development of Business Models: Implications of the Web 20 for Creating Value on the Internet,” Long Range Planning, vol. 43, no. 2-3, pp. 272–290, 2010.
[38] D.A. Littler, and R.C. Sweeting, “Innovative business development: selection and management issues,” Futures, vol. 19, no. 2, pp. 155–167, 1987.
[39] K. de Ruyter, and N. Scholl, "Positioning qualitative market research: reflections from theory and practice," Qualitative market research: An international journal, vol. 1, no. 1, pp. 7-14, 1998.
[40] S. M. Wagner, P. Lukassen, and M. Mahlendorf, “Misused and missed use—Grounded Theory and Objective Hermeneutics as methods for research in industrial marketing,” Industrial Marketing Management, vol. 39, no. 1, pp. 5-15, 2010.
[41] B. Dehning, and T. Stratopoulos, "DuPont analysis of an IT-enabled competitive advantage," International Journal of Accounting Information Systems, vol. 3, no. 3, pp. 165-176, 2002.
[42] A. Sorescu, R.T. Frambach, J. Singh, A. Rangaswamy, and C. Bridges, “Innovations in retail business models,” Journal of Retailing, vol. 87, no. 1, pp. 3-16, 2011.
[43] R. A. Bettis, and M. A. Hitt, “The new competitive landscape,” Strategic Management Journal, vol. 16 (Special Issue), pp. 7–19, 1995.
[44] B. Wooldridge, and S. W. Floyd, "The strategy process, middle management involvement, and organizational performance," Strategic management journal, vol. 11, no. 3, pp. 231-241, 1990.
[45] J. Karimi, Y. P. Gupta, and T. M. Somers, “The congruence between a firm’s competitive strategy and information technology leader’s rank and role,” Journal of Management Information Systems, vol. 13, no. 1, pp. 63–89, 1996.