SYNTHESIS OF DIGITAL TRANSFORMATION BEYOND TECHNOLOGY
Underlining evidence towards the strategic importance of Digital Transformation (DX) is highly conclusive. Across industries, Digital Transformation has become a focal point where organizations explore to enhance digital capabilities to sustain hyper-competitive markets whilst inclined to extend personalize the experience to digitally savvy customers. Despite central attention and correct investments, many organizations fail DX efforts, as many failures derived where organization initiates transformation within standalone technology focus architectures in IS (Information Systems), IT (Information Technology) platforms. On contrary, many scholars depicted that sustainability in successful DX efforts would derive by the synchronized synergy between Technology and Nontechnology antecedents. These focal antecedents such as Business Strategy, Leadership, and Culture bundle with key success to transformational agents such as Customer centricity, Digital Business process, and Structural agility are being discussed in isolation in a different school of academia, However literature to Digital Transformation and connected Nontechnological antecedents are scares. This paper intends to address this by presenting connected literature in defining DX and exploring literature to validate how each Nontechnology antecedents enable successful DX whilst support to enhance digital maturity where benefits of disruptive technologies could be managed and convert as capabilities as against act as a threat of existence.
“The mobilities paradigm explores the movement of people, ideas and things, as well as the broader social implications of those movements” (Sheller,2011 p.146). Hyper globalization accelerated innovations, rapid urbanization, and changing demographics have been the underline challenges and opportunities encountered by today’s business environment. Contemporary businesses explore the clarity and efficiencies of the newer digital business ecosystem towards facilitating evolving customer experience and scaling businesses whilst protecting the bottom line which influenced by the modern technology provisions (Alrawadieh, Alrawadieh & Cetin, 2020). This is the underline reason why businesses across the globe change their strategic direction towards Digital Transformation (DX) to sustain competitive scope to deliver greater customer experience and have a value-driven relationship with the connected stakeholders in the business ecosystem (Berman, 2012; Fitzgerald et al.,2014). Which is why CEO’s across counties consider Digital Transformation risk as to the main risk factor in their businesses (Tabrizi et al., 2019). Hence the importance of getting it correct has become paramount. Digital transformation embodies multifaceted characteristic which formulated across multiple technology provision which is parallelly adopted and sync to create values across the business. These bundle technologies are driven by both technology and non-Technology antecedents which set to bringing the power of technology with the culture embrace change which formed with better formation and implementation of Digital Strategy and govern practices (Newman, 2016). Mithas et al. (2013) put forward that Digital transformation isn’t merely single innovation entrenched to organizations. Despite the rich collaboration of digital transformation in IS (Information systems) and IT (Information technology), most scholars depicted that successful formation and application of Digital Transformation embedded heavily on the non-technological phenomenon. Hence this paper intended to explore academic discussion on non-technological attributes and agents of Digital Transformation which facilitate the sustainable success of DX initiatives.
Synthesis of Digital Transformation which comprises several dynamics and agents which often discuss in harmony. Definitions of the Digital Transformation accentuate hyperfocus customer centricity as one of the underline character agents of Digital Transformation which determines the “make or break” of the DX process (Dimension Data,2017; Doug Tedder, 2016; Desmet et al., 2015). Further business process transformation also perceived as one of the other critical agents of synthesis of DX where the strategic formation of seamless multifunctional integrated business processes are in essential towards facilitating changes in customers dynamics and to network across with extended business stakeholders (Rai et al., 2012; Bharadwaj et al., 2013; Rogers, 2016). Structural agility of organizations has been another critical agent of Digital Transformation which extensively discusses in related Digital academia (Corver & Elkhuizen, 2014; Dimension data, 2017; Köffer et al., 2015). Moreover, synchronized academics of Digital Transformation, Business Management, Information Technology, and Business phycology outline several other non-technological attributes that are pivotal towards the successful formulation as an application of Digital Transformation. Hence this paper further discusses academia scope towards Digital Business Strategy (Bhardwaj et al., 2013; Tabrizi, 2019; Chanias & Hess, 2016; Peter, Kraft, & Lindeque, 2020), Scope of Digital Leadership (Riggio, 2014; Schwarzmüller, 2016; Deloitte, 2014; Khan, 2016; Shaughnessy, 2018) & Embedded Cultural scope (Capgemini, 2017; Ikeda, Marshall & Majumdar, 2014; Westerman et al., 2014) which associate essential determinants of Digital Transformation.
Terminologies such as Digital Transformation, Digitization, and Digitalization seems to represent similar narrative but these terms represent unique characteristics against another. Digitization “is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities” ( Bloomberg, 2018, p.3), whereas the term Digital Transformation which also abbreviated as (DX) (Westerman et al., 2013; Greene, Parker & Perry 2017: i-scoop, 2018; Morakanyane et al.,2020), represent broader terms which effect across every organization which enables capturing complex benefits in a unique way thus allowing the transition of technology-driven business model which gain short term benefits and whilst paving the path to adopting new technologies to sustain ongoing mechanism to the continuation to capture such benefits (Desmetet al.,2015), In conjunction the “Process of digitalization, and its subsequent effects”, described as digital transformation (Bounfour, 2016). Defining of Digital transformation has gone through several different schools of thought. Many scholars defined digital transformation along with the holistic approach whilst emphasizing the importance of customer focus, business process, structural implication along with other related strategic and operational dimensions.
Modern literature debate that the Digital Transformation does not merely represent the technology element alone, it represents the digital reflection that flows across the businesses and how engagement forms within societies (Andal-Ancion, Cartwright & Yip, 2003; Newman, 2019). Definition by Vial (2019), formulated from a study of understanding Digital Transformation scientifically attempted to defined digital transformation with the review of 23 unique definitions found in DX Literature which stand out as the most dated and focused definition of Digital Transformation. As portrayed by several scholars in Digital Transformation (Table 1) phenomena discuss key dimensions such as Transformation in Customer centricity, Transformation in business Process/operations, Transformation in the organizational structure along with the technology adoption in overall organizational perspective as the defining pillars of Digital Transformation. This paper attempt to explore these dimensions of customer-centricity, business process and organization structure and its implication towards Digital Transformation.
Customer Centricity; Today’s customers hold the defining power to control how the business has to conduct the way it brings greater value proportion facilitated towards them. That the reason DX scholars identify that Digital Transformation often begins with “Customer” (Corver & Elkhuizen, 2014; Blakely, 2018). Customer experience is the most defining critical success factor modern-day experience-based business engagement which formulate between customer and business. Ubiquitous connectivity, greater diffusion of social media platform, and an increase in the social mobility of modern-day customers have urge businesses to use technology dynamics to connect with customers in real-time to enhance product/service experience (Fitzgerald et al., 2013; Buhalis & Sinarta, 2019). A deeper knowledge of customers allows businesses to improve service levels and build capabilities to enhance the unique customer experience. Which align towards enhanced brand equities which businesses compose upon the hyper interaction with social media platforms and influence with the greater engagement word of mouth (WOM), traditional or electronic-based, within closer and broader communication circles (Li & Petrick,2008; Nikhashemi, Paim & Khatibi, A.,2015; Jayasuriya,N.A et al.,2018). It is important for businesses to replicate the analogous experience across multiple Omni platforms between customers and businesses. Across industries, there is an obvious increase in demand for this rich experience which facilitates seamless online-to-offline activities throughout decision-making process where the business has to provide what customers pre/post-experience and purchase behavior as against what business has to offer customers (CMO Council, 2016; Kanwar, 2016). “Cognizant Digital transformation framework” of Quido & Gerard (2014) outlines concurrent digitization of customer experience and product offering is critical to enhancing to the extent the ultimate customer experience. “Seven dimension and impact criteria” framework of Digital transformation by Lucas et al., (2013) discusses the importance of digital connectivity between customer and business and changes in creating user experience to enhance the overall digital experience of the customer. Doug Tedder (2016) also put forward “Four characters of digital transformation” which outlines deep learning of customer behavior which includes buying patterns, level of business interactions, demographics mix allow hyperfocus towards customer centricity which is a key pillar for the Digital Transformation. Further Westerman et al., (2014) under Digital capability building, Desmet et al., (2015) “Six building block of Digital Enterprise” and many academia critically persistence about the importance of customer-centric aspect which drives the sustainability of DX initiatives. (Peter, Kraft & Lindeque, 2020; Fitzgerald,2014; Alrawadieh et al., 2020)
Business Process Transformation: Changing customer dynamics and interconnectedness of global value chains has urge companies to operate beyond legacy business processes. Different forms of technologies in use also greatly influence the operational side of the business process (Kuruwitaarachchi et al., 2018). Digital Transformation academia outline that the Transformation of the Digital business process as one of the defining features which need to be designed in the core of Digital Transformation strategies. (Westerman et al., 2014; Venkatraman, 1994; i-SCOOP, 2016; Dimension Data, 2019; Peter et al., 2020).Disruptive characteristics of digital technologies fundamentally activated modern-day industries to transform. Such technology dynamics urge businesses to function in multifactional business strategies and business processes that actively support the demanding need of digital necessities to manage extended and interconnected business networks (Bharadwaj et al., 2013; Rai et al., 2012). Digital Transformation literature outline underline elements such as speed, sharing, and creation of focus information (Westerman et al., 2014), real-time business integration (Collin et al., 2015), ability to activate short time decision making (Rogers, 2016), process transparency (Mäenpää & Collin, 2015; Doug Tedder, 2016), value creation capability and support to bring agility (Bharadwaj et al., 2013; Dimension Data, 2019), cost reduction (Venkatraman, 1994) as critical elements of formulating digital business processes in supporting Digital Transformation. The further abstract framework of such as the “four characteristics of digital transformation framework” by Doug Tedder (2016), “Cognizant Digital transformation framework” (Corver & Elkhuizen, 2014), “Six building blocks for high-performance Digital Enterprises” (Desmet et al., 2015), “Digital transformation matrix” (Planing et al., 2016), “Drivers of Key Themes of Digital business strategy” (Bhardwaj et al., 2013) too depict the underline necessity of Digital Business Transformation as an integral part of the Digital Transformation.
Agile Structures: Structural agility of an organization perceived as another critical element of DX. Agility provide much-needed speed and logical flow of information that activate sequence and logical flow of actions that support the digital business process and rapidly changing customer experience. Further Structural agility enables the business to facilitate cohesive integration of the varied ecosystem of business integration across multiple boundaries which in turn support businesses become more lean and integrated whilst breaking down the individual and group silos which disturb value and efficiency flow demanded in a modern business entity(Corver & Elkhuizen,2014).“Six building blocks frame” of Desmet et al., (2015) portrayed that the supportive structure of digital businesses avoids rigid, slow-moving nature of business operations which bring fluid, agility, and flexibility to the business which can exist in seamless collaboration to run the business smoothly. Scholars DX tend to agree that agile organizational structures facilitate business to remove traditional hierarchical barriers and creating connected harmony to create value, operate in lean, better interaction with customers and faster technology adoption which define the success in Digital Transformational applications of any businesses (Westerman et al., 2013; Rishipal, 2014, Hiekkanen, 2015). Further Designing the digital workplace by Köffer (2015), Digital Cultural Journey by Capgemini (2017), Digital workplace Report by Dimension data (2017), Digital transformation framework by Matt et al. (2015) also depicted the importance of Supporting agile organizational structure in order to enhance digital customer experience and leverage business process and create value provision which are the underline investment returns of Digital Transformation. Beyond the elements of customer-centricity, business process, and structural agility DX academia further emphasizes the importance of non-technological antecedents such as business strategy, culture, and leadership as underlining determinants of thee success or failure of DX initiatives.
Strategy scope of Digital Transformation: Success in digital business is not merely established on technology determinant. Multiple academia including professional bodies such as MIT Sloan Management Review and Deloitte identifies that the “Strategy” which formulate and implement with the digital ecosystem holds critical importance towards digital success (Kane et al., 2015). As compelling forcers of enhanced digital customer experiences, real-time connected business processes, agile and lean business hierarchies facilitate faster and focus information towards creation value, the need to synchronize strategic approach to Digital Transformation. Where such action immensely important rather than take each element as an operational subsegment, which implies to the broader level understanding of the Strategy. According to Hax (1990) , the strategy is “a logical system for differentiating managerial tasks at corporate, business, and functional levels” (Hax,1990, p. 36). Digital business strategies facilitate businesses to form dynamic capabilities to succeed in a competitive and unpredictable business environment (Pavlou & El Sawy, 2010). Several Scholars depicted the integral importance of “Digital business Strategy” in Digital Transformation (Tabrizi, 2019; Kane et al., 2015; Bharadwaj et al., 2013; Matt et al., 2015; Paul & David, 2013; Chanias & Hess, 2016; Peter, Kraft, & Lindeque, 2020). One school of thought identify digital strategy as a separate strategic element which formatted in with functional and corporate level organizational strategy (McDonald, 2012), other schools of thoughts debate that DX strategy support both operational and functional level strategy which function align to the corporate business strategy (Matt et al., 2015). Which again challenge by different schools of opinion in which perceived digital business strategy simply represents organizational strategy which facilitated to generate business values and unique experience with effective utilization of extant resources (Bharadwaj et al., 2013).Drivers of Key Themes of Digital business (Bhardwaj et al., 2013) highlight that synchronization of internal direction and external technology collaboration towards driving digital strategy dynamic of Scope, scale, speed, value creation which ultimately determines the business performance. Literature outline that digital business strategy must formulate with depth understanding of the essential business area which facilitates digital adaption. According to Bharadwaj et al., (2013), the Four Strategy dimension focuses scrutiny on Digital business strategy with correct questioning (Table 2) towards formulating a profound and well balance digital business strategy.
Bharadwaj et al., (2013) outline, successful digital strategy formulated with depth understanding of Digital Product /Service and business process which draws in line with greater customer experience. The scope of the strategy has to facilitated to transform traditional business processes and to provide supporting strategic focus towards the hierarchical alignment of the organizational structure. Digital business strategy expected to scale up or down the business with the context, The literature outline that the scope of the strategy focuses on the best utilization of digital resources, capabilities, and how extended digital business networks allow a better increase in the scale of the business. Further Speed elements of Strategy dimension underpin Timing to the strategic decision, orchestration of connected benefits from supply chains, and how fast and accurate business respond to the changes in the business environment. Moreover, the value creation dimension of the Digital business Strategy fundamentally focusing on new source value which could be orchestrated on leverage on information, leverage on the multisided business model, connectivity among stakeholders, and expected value creation from internal organizational Digital architecture (Bhardwaj et al., 2013). Many IT strategies function with clear detachment from a holistic digital strategy. According to McDonald (2012), it is fundamental that clarity of better integration between IT and overall strategy is vital to pull successful digital transformation. As described by Matt et al., (2015), Digital Transformational strategies take on different perspectives and pursue a different set of goals and intentions. “The Four Dimensions of Digital Transformation Strategies” Matt et al. (2015) (Figure 1) which design to give the direction DX Strategy synchronized operational and functional level strategies of a business that has broader integration towards the corporate strategy of that business entity.
Further, Mithas et al., (2013) put forward that the formation of a Digital Transformation strategy must seek beyond the internal perspective. His work argues strategy in digital context should not be raised to attain inward efficiencies but that is also aligned to the concurrent awareness of external respondents such as competition and arises with a deep understanding of the digital-oriented customer's experience. Work of Chanias & Hess, T. (2016) outline that the bottom-up approach of DX strategy where the strategy has to be shaped by the diversity of emergent strategizing activities of separate organizational subcommunities which enable holistic approach of formatting the strategy in bottoms-up approach. Overall literature on Digital transformational strategy put weight on key defining elements such as the formation of strategy in of focusses on enhancing along with existing capabilities, increase the scale of business with underline technologies and business processes which need to be backed with by the speed of businesses operations and decision making towards creating new value propositions to the business. Further integration multi-level strategy provision such as IT, operational, business, and corporate has to connect with interdependency when formulating and implementing Digital Transformational Strategies.
Leadership scope of Digital Transformation: Recent literature in DX identify Leadership as another critical nontechnological antecedent of Digital Transformation (Hameed et al., 2012; Westerman et al., 2014; Delloite, 2014; Giles, 2016; Schwarzmüller, 2016; Khan,2016; McKinsey Implementation, 2018; Hemerling et al ., 2018; Warner, K.S. & Wäger, M,2019). In Particular work of Westerman et al., (2014) set significant weight on Digital leadership along with the Digital capability building as the most compelling dimensions of Digital Transformation. Digital Transformation and leadership cannot be discussed in isolation as both dimensions underpin each other towards the application and sustainability of any Digital transformational initiatives in an organization. Cohesive understanding of leadership is paramount to adapt and capture new digital capabilities which significant in today’s changing business environment (Collin et al., 2015; Balan & Cavendish, 2017). As it implies, Digital Transformation has become a high priority task in leadership where 90% of business leaders from the UK and US perceived increase strategic contribution in this era. (Bonnet, D et al.,2012). Rapid changes in the business environment often trigger businesses to revitalize strategies hence impact on structures and context of the business. These dynamics urge modern business leaders to instill digitally centralized behavior as it could support the sustainability of modern business (Chew, 2015; Rogers, 2016). One school of thought underpin that leaders in Digital Transformation should possess a combination of Transformational and Authentic Leadership traits. Bass & Riggio (2006) outline Transformational Leaders projects characteristics of, “Idealized influence”– who delivers what is said and have strong loyal followers, “Inspirational motivation” - Maintain a high level of self-motivation and who project belongingness, “Intellectual stimulation”-Positive mindset which encourages radical and controversial suggestions to technology and knowledge sharing, “Individualized consideration”– who has a desire to grow and play individual mentor role. Further, Copeland (2014) depicted that leadership in Authentic paradigm compose with characteristics of self-awareness (personal strength and weaknesses of what need to assess in a digital context), Relational Transparency (quality to promote genuineness, trust, and open behavior), Balanced processing (Make information and analysis in the core towards function with alternative probabilities) and Internalized Moral Perspective (leaders who maintain quality of doing the right thing or ethical correct decision). Furthermore, several other scholars represent the ideology despite having natural born traits leaders to develop skills and capabilities which facilitate successful Digital Transformation of a business (Bounfour, 2016; Westerman et al., 2014; Schwarzmüllerv, 2017). Where business leaders should develop capabilities to 1. Create Transformative Digital vision 2. To energize internal engagement among employees, 3. Strong focus on execution of digital governance across the organization, and 4. Building technological leadership (Westerman et al., 2014) and Strategic risk management towards successful implementation technology-infused businesses (Alzaabi et al.,2020).
“Leading Digital” by Westermann et al (2004) outlines four levels of Digital Mastery as strategic direction where leaders can pursue in Digital Transformational journey (Figure 2). Where literature outline that the “Digital Master” status quo is the most significant position where organization and leadership both optimize respective dynamics to stay strong and compete and have been able to 9 to 26 percent more profits than Beginners and Fashionistas. Moreover, Concept of digital maturity matrix by Andervin and Jansson (2016) which developed in line with Kotter’s transformation process (Kotter, 1996) , Digital Maturity Model (Deloiite, 2018) and leadership models by Kakabadse et al. (2011), Digital Transformation Matrix (Westerman et al.,2014) and work of Schwarzmüller (2017) reinstate the strategic importance leadership in Digital Transformation.
Scope of Culture in Digital Transformation Culture in an organization perceived as an integral mechanism within a business which synchronize multifaceted business verticals. Hemerling et al.,(2015) mention that culture consists if unique values and integral elements that determine the behavior of an organization. Scholars in various discipline agree that culture is a pivotal elements of successful Digital Transformation (Gupta, Dasgupta, & Gupta, 2008; Kane al., 2015; Valentine, & Stewart, 2015; Westerman et al., 2014: Newman et al, 2016; Wang, 2016; Hartl, & Hess, 2017). Further literature portrays that business that peruses technology-infused culture would be a defining strength towards business sustainability than those who not.
The study of BCG found that 80% of businesses that foster digital culture sustain strong performance ( Hemerling et al., 2015), In a contrary study by Dimension data outline Culture as the main obstacle of Digital Transformation across industries. Kane et al., (2015) outline that several dynamics of culture are conducive to Digital Transformation or can become a risk as more digitally advanced companies could leverage on competitive advantage. Inline to defining elements Hartl & Hess (2017) put forward that concept of culture comprises of explicit elements such as structures and practices and implicit elements such as beliefs and norms. Academia outline several cultural attributes such as Taking risk (Kane et al., 2015; Fitzgerald et al., 2014; Alzaabi et al.,2020), Learning (Vey, et al., 2017; Wördenweber et al., 2012), Innovativeness (Fichman et al., 2014), Collaborative working environment (Westermann et al., 2014), trial or error mentality (Kane et al., 2015; Piccinini et al., 2015) with other attributes (Table 3) of culture which sporadically foster digital Transformation.
Further, Ikeda et al.,(2014) identify a successful organization in Digital Transformation take appropriate measures to instill culture which encourages innovation and faster diffusion. The same alignment of literature from Hemerling et al. (2015) and Nalin, B. D. V et al. (2020) emphasize five defining elements of digital culture, 1. External orientation (towards customers & partners), 2. Delegation & trust against control, 3. Risk-taking and learning over caution 4. Short term orientation 5. Collaboration over individualist efforts, which has to establish within a digital-driven organization in which the element could be vary based on the socio-economic and industrial context of any business.
CONCLUSION: Digital Transformation perceived as one of the most debated and highlighted scopes of business among modern businesses. Both academia and empirical conclusions are absolutely over the strategic importance of DX which facilitates digital capabilities to strengthen and sustain complexities arise from disruptive technologies. Synthesis of Digital Transformation consists of dominant technology-driven dynamics such as IT, IS, and Smart technology attributes. However, this paper emphasizes non-technology based attributes such as strategy, leadership, and culture which discuss extensively in business management, ICT, business psychology, and social science disciplines. Further study accentuates connected agents of Digital Transformation such as customer centricity approach, digital business process transformation, and digital structural agility which are perceived as defining pillars of Digital Transformational initiatives. As cohesively, the literature of Digital Transformation is scared, and in developing concurrently this paper perceived to contribute to the literature provision of the Digital Transformation and highlight imperative elements that could be used in the practice and formulation level of Digital Transformation across industries and varied business verticals.
