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Digital Transformation: A Literature Review and Guidelines for Future Research

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The aim of this paper is to provide insights regarding the state of the art of Digital Transformation, and to propose avenues for future research. Using a systematic literature review of 206 peer-reviewed articles, this paper provides an overview of the literature. Among other things, the findings indicate that managers should adapt their business strategy to a new digital reality. This mainly results in the adaptation of processes and operations management. Scholars, for the other side, are also facing challenges, as prior research may not have identified all the opportunities and challenges of Digital Transformation. Furthermore, while the Digital Transformation has expanded to all sectors of activity there are some areas with more prospects of being developed in the future than others.
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Digital Transformation: A Literature Review
and Guidelines for Future Research
João Reis
1(&)
, Marlene Amorim
2
, Nuno Melão
3
, and Patrícia Matos
4
1
Department of Military Science and Technologies, and CISD&CINAMIL,
Military Academy, Lisbon, Portugal
reis.joao@ua.pt
2
Department of Economics, Management and Industrial Engineering
and Tourism, and GOVCOPP, Aveiro University, Aveiro, Portugal
mamorim@ua.pt
3
Department of Management and CI&DETS, School of Technology
and Management of Viseu, Polytechnic Institute of Viseu, Viseu, Portugal
nmelao@estgv.ipv.pt
4
Higher Institute of Social and Political Sciences, and CISD, Lisbon, Portugal
psmatos@tvi.pt
Abstract. The aim of this paper is to provide insights regarding the state of the
art of Digital Transformation, and to propose avenues for future research. Using
a systematic literature review of 206 peer-reviewed articles, this paper provides
an overview of the literature. Among other things, the ndings indicate that
managers should adapt their business strategy to a new digital reality. This
mainly results in the adaptation of processes and operations management.
Scholars, for the other side, are also facing challenges, as prior research may not
have identied all the opportunities and challenges of Digital Transformation.
Furthermore, while the Digital Transformation has expanded to all sectors of
activity there are some areas with more prospects of being developed in the
future than others.
Keywords: Digital Transformation Business strategy Processes
Operations Systematic literature review
1 Introduction
With the rise of new digital technologies, e.g., social networks, mobile, big data, etc.,
rms in virtually all industries domains are conducting multiple initiatives to explore
and exploit their benets [1,2]. This frequently involves transformations of key
business operations and affects products and processes, as well as organizational
structures, as companies need to establish management practices to govern these
complex transformations [3]. Thus, the society as a whole is facing a fast and radical
change due to the maturation of digital technologies and their ubiquitous penetration of
all markets [4]. To add to the increased demand from customers, companies are facing
ever tougher competition due to globalization [5] and putting pressure to go digital
before others do, seeking to survive and attain competitive advantages [6]. Hence, in
©Springer International Publishing AG, part of Springer Nature 2018
Á. Rocha et al. (Eds.): WorldCIST'18 2018, AISC 745, pp. 411421, 2018.
https://doi.org/10.1007/978-3-319-77703-0_41
recent years born digitalpioneers (e.g., Amazon, Facebook and Google) have grown
into powerful behemoths, while companies that long dominated their industries found
their traditional value proposition under threat [7]. However, despite the multiplicity of
technological novelties and recipes for their implementation, whether in business,
public governance and private life, real Digital Transformation is taking much longer
and facing more difculties than it has been expected [8]. Unfortunately, there are
many recent examples of organizations that have been unable to keep pace with the
new digital reality: examples include the bankruptcy of movie-rental Company
Blockbuster, largely resulting from those rmsinabilities to rapidly develop and
implement new digitally-based business models [9]. Successful Digital Transformation
requires an organization to develop a wide-range of capabilities, which will vary in
importance depending on the business context and the specic organizations needs.
Digital technology needs to become central to how the business operates, and orga-
nizations effectively need to re-think and possibly re-invent their business models in
order to remain competitive [10]. This article differs from previous literature reviews as
it strictly focuses on the concept of Digital Transformation. Several concepts have been
advanced to label Digital Transformation (e.g. digitalization, digitation) and whereas
they are often used indistinctively in the literature, researchers continuously try to
determine their boundaries to avoid overlaps. We felt that it would be not prudent to
dene several terms in such a short paper; while, at the same time, there was a need to
draw attention to Digital Transformation, as few literature reviews were conducted
when compared, for instance, with the Digitalization term. Henriette et al. [11] con-
ducted a similar systematic literature review, but used a different database (Scopus).
Their work also focuses on the vulnerabilities and opportunities of digital transfor-
mation, but different contributions arise by emphasizing the impact of digital capa-
bilities on the digital transformation and the explanation on how digitalization
transforms business models, operations processes and user experience. Thus, based the
literature review, our paper proposes a denition of Digital Transformation, delivers a
general overview of the literature, along with some suggestions for future research. To
this end, the next section provides a brief description of the methodological approach
and is followed by the literature review. We end with some concluding remarks.
2 Methodology
This article follows a systematic literature review method, which adheres closely to a
set of scientic methods that aims to limit systematic error (bias), mainly by attempting
to identify, appraise and synthesize all relevant studies [12]. Undertaking a review
provides the best evidence for informing academics and practitioners by adopting a
replicable, scientic and transparent process[13]. To reduce potential bias, we
adopted two different approaches: a qualitative approach based on a bibliometric
analysis and a qualitative approach centered on a content analysis of the literature [14].
Table 1summarizes the research methodology.
Both approaches should be seen as being complementaryin acknowledging the
structure of the eld of study [15]. Other researchers have also conducted identical
literature reviews, vide [14]. The data search was conducted on September 17
th
, 2017,
412 J. Reis et al.
and the selected peer-reviewed database was the Institute for Scientic Information
Web of Science (ISI).
We started with the inclusion criteria by using the Digital Transformationterm in
the topic (title, abstract and keywords). Although different keywords may be consid-
ered as a viable alternative, Digital Transformationis the phenomenon that we want
to study. By adding similar terms to the research, it might lead researchers into a biased
understanding, as not all terms have the same meaning (e.g. digitalization, digitation).
The search for articles was conducted regardless the time limitations, but we reduced
the coverage to journal articles and conference papers. To avoid wrong interpretations,
the selected documents had to be written in English (Table 2). The exclusion process
resulted in a total of 206 academic articles from the ISI database.
3 Findings
3.1 Quantitative Analysis
Although the number of papers on Digital Transformation evolved over time, it was
only after 2014 that their numbers increased signicantly. In 2016, 45% of the total
number of articles is journal articles and 55% are conference papers, highlighting a
high value for conference proceedings (Fig. 1). The countries that most contributed to
these publications are the United States of America, Germany and Popular Republic of
China, with 21%, 19% and 5%, respectively. The reason behind these numbers, in
Table 1. Research methodology
Approach Description Content
Quantitative
approach
A quantitative characterization of the selected
publications
Publications distribution
Distribution per author and
journal
Major research approaches
Keywords frequency
Qualitative
approach
Content analysis of the selected articles Digital Transformation
denitions
Themes and categories
Table 2. Systematic literature review process
Institute for Scientic Information Web of Science
Criteria Filters Documents
Keyword Digital Transformation
Restriction Topic (title, abstract, author keywords) 260
Document type Articles and conference proceedings 235
Language English 206
Digital Transformation 413
those countries, might be due to the adoption of new technologies across the main
sectors of activity.
In addition, we evaluated the citation distribution (Table 3). The most cited articles
focus on the challenges that innovative technologies bring to rmsbusiness e.g., [16].
Therefore, they do not examine the post-adoption determinants of digital transforma-
tion, in order to understand its effects. Additionally, some other relevant articles rise,
while governmental efforts surge to digitalize the Healthcare Systems, as a means to
make them safer, accessible and more affordable [17].
We also explored the journal distribution and the quality of those publications by
conducting a research on the Incites Journal Citation Reports, which measures the
journals impact, inuence or prestige (Table 4).
The journal that had the largest number of publications in Digital Transformation
was the MIS Quarterly Executive, which is a journal with an emphasis on
practice-based research, a strong indication that this theme is largely being driven by
practitioners. We also observed a signicant increase in the number of publications of
lower quality in the years of 2016 and 2017. To best of our knowledge, the quality of
the research has not declined, since there was simultaneously an increase of high
quality publications over the last years. We also reported the main research approaches
(methods). The bars from Fig. 2illustrate the dispersion of each approach.
Although Fig. 2does not show all research approaches, we considered those that
had more incidences. The literature reviews just counted with four occurrences;
however, the prevalence of conceptual and illustrative case studies is a clear indication
of the lack of maturity of this phenomenon, consequently, future research should focus
more on setting the theoretical foundations of the eld, based on existing theories or
developing new ones. We have performed a similar search in the ISI database
(September 23
rd
, 2017) with the term Digitalization, in the topic and with the same
Fig. 1. Publications distribution
414 J. Reis et al.
lters, and we found 2,200 documents. This search resulted in a higher number of
articles and conference proceedings, but also on literature reviews. It will be valuable
for academics to draw more attention to Digital Transformation, as few articles and
literature reviews were conducted when compared with other similar terms, but also to
try to understand why there is such a big discrepancy between terms. In order to
understand the most important research topics, we also collected the most ISI cited
keywords (Table 5).
The bars reveal that most common keywords are: Digital Transformation, Digi-
talization, and Management, by this order. A keyword analysis can provide clues to
discover areas for future research, but also to understand which terms are closest to the
Digital topic. It is almost self-evident that the top terms are closely related. From our
Table 3. Article distribution per author
Top 10 author(s) Journal Year Citations
Karimi and
Walter [16]
Journal of Management Information Systems 2015 133
Nagy and Koles
[18]
Convergence The International Journal of Research into
New Media Technology
2014 120
Trantopoulos
et al. [19]
MIS Quarterly 2017 115
Alos-Simo et al.
[20]
Industrial Management & Data Systems 2017 109
Sherer et al. [21] Information & Management 2016 106
Ranganathan
et al. [22]
International Journal of Information Management 2011 101
Agarwal et al.
[17]
Information Systems Research 2010 95
Benlian and
Haffke [23]
Journal of Strategic Information Systems 2016 94
Chen et al. [24] Internet Research 2016 84
Schmidt et al.
[25]
Practice of Enterprise Modeling 2015 82
Table 4. Article distribution per journal
Top 5 publication journals Count Quartile % of 206
MIS Quarterly Executive 10 Q2 4.854%
Communications in Computer and Information Science 6 2.913%
Lecture Notes in Business Information Processing 5 2.427%
Digital Transformation and Global Society 4 1.942%
Lecture Notes in Computer Science 4 Q4 1.942%
Digital Transformation 415
analysis, Digital Transformation and Digitalization are similar terms that apply to
services, processes and organizational structures throughout IT/IS and web-based
enablers; therefore, the connection to management is as vital as companies need to
establish management practices to govern these complex transformations [3].
3.2 Qualitative Analysis
As Kokkinakos et al. [26] argues that state-of-the-art technologies, like social software,
data analytics etc., revolutionize the every-day operations of modern organizations in
Fig. 2. Major research approaches
Table 5. Keywords frequency ( 6 occurrences)
416 J. Reis et al.
every possible level and ways, and, thus, it is expected that Digital Transformation
lately constitutes one of the prevalent terms around the World Wide Web; because of
its importance, many authors attempt to dene and discuss the exact notion of Digital
Transformation. This argument reafrms the importance of dening Digital Transfor-
mation, as no formal categorization exists in academic literature and its boundaries are
often blurred. The challenge of dening Digital Transformation concept can be tackled
after the denitions have been reduced to their basic elements. Table 6illustrates
typical denitions taken from the literature.
The different denitions for Digital Transformation (DT) may be categorized in
three distinct elements: (1) Technological DT is based on the use of new digital
technologies such as social media, mobile, analytics or embedded devices; (2) Orga-
nizational DT requires a change of organizational processes or the creation of new
Table 6. Digital Transformation Denitions
Author(s) Denition(s)
Fitzgerald et al. [1];
McDonald and Rowsell-Jones [27]
Use of new digital technologies, such as social media,
mobile, analytics or embedded devices, in order to
enable major business improvements like enhancing
customer experience, streamlining operations or
creating new business models [1]. As such, the Digital
Transformation goes beyond merely digitizing
resources and results in value and revenues being
created from digital assets [27]
Solis et al. [28] The realignment of, or new investment in, technology
and business models to more effectively engage digital
customers at every touch point in the customer
experience lifecycle
Collin et al. [29]; Gimpel and
Röglinger [30]; Kane et al. [31]
While digitization commonly describes the mere
conversion of analogue into digital information, the
terms Digital Transformation and digitalization are
used interchangeably and refer to a broad concept
affecting politics, business, and social issues
Martin [32] Digital Transformation is now commonly interpreted as
such usage of Information and Communication
Technology, when not trivial automation is performed,
but fundamentally new capabilities are created in
business, public government, and in peoples and
society life
Westerman et al. [5] Digital Transformation is dened as the use of
technology to radically improve performance or reach
of enterprises
Stolterman and Fors [33] Digital Transformation is the changes that digital
technology causes or inuences in all aspects of human
life
Digital Transformation 417
business models; (3) Social DT is a phenomenon that is inuencing all aspects of
human life by e.g., enhancing customers experience. Almost all of these topics are used
in the researchersdenition of Digital Transformation (Table 6). Therefore, we dene
Digital Transformation as the use of new digital technologies that enables major
business improvements and inuences all aspects of customerslife. We also examined
the most relevant categories by crossing the most used research areas and ISI cited
keywords, as the following (Table 7):
Digital Transformation has always had a strong connection to the industry, and is
currently re-experiencing huge changes, as the industry 4.0 represents the coming
fourth industrial revolution. It focuses on the end-to-end digitization of all physical
assets and integration into digital ecosystems with value chain partners [34]. Another
signicant challenge is to integrate digitalinto the DNA of the business models. This
is essential for success of any company and it is becoming a critical management issue
[35]. As with any IT-enabled change, it is not enough to bring the IT to the organi-
zation [36]; the Digital Transformation success depends on process and operations
management changes [37]. To accomplish such management, people must be trained in
a change process that takes into account the unique challenges presented by IT [36].
A digital revolution is positively developing the digital and standardized working
environments [38]. Some workplaces are being virtualized or remotely controllable,
which requires new communications skills and knowledge of virtual worlds [39,40].
Socially, customers are also acquiring new competences, to be able to engage with
digital organizations, in order to subsist in the Digital Era [8]. The digital Era is not
only driving innovation in the enterprise sector, it seems to inuence developments in
the public sector as well [26]. The governmental digitalization is one of the promising
themes, with more prospects of being developed in the future. There is also a growing
interest in the healthcare sector [41], as there has been a signicant research increasing
on the digitalization of the healthcare over the past last years [17,41]. Although we
acknowledge the existence of maturity models in this eld, having been developed
primarily by practitioners (e.g. IDC maturity model), the academic community has not
yet elected a consensual maturity model for Digital Transformation that can be applied
Table 7. Qualitative Analysis
%of
206
Research area ISI cited keywords Categories
34% Information
systems
Industry 4.0 IT/IS integration
22% Business
economics
Digital business enterprise
architecture
Development of new
business models
8% Education Educational technology Training/Education to add
new skills
4% Management
science
Management Process and operations
management
1% Government Public sector transformation Ramication to other sectors
418 J. Reis et al.
to all sectors of activity. Therefore, we propose an in-depth research on the distinction
of associated terms to Digital Transformation, and a maturity model to determine the
organizational degree of Digital Transformation.
4 Concluding Remarks
Although Digital Transformation is popular among practitioners, this term tends to be
neglected in the scholarly literature, and so we decided to conduct this literature review.
The aforementioned argument is well evidenced if we conduct a search in ISI database
using both terms Digital Transformationand Digitalization. We present the con-
clusion from two different perspectives. First, from the cynic viewpoint, Digital
Transformation may be considered as a management fashion [42] or as the reincar-
nation of past IT-enabled change initiatives with new outts. IT-enabled change
resurfaced a few years ago through the business process management movement. As
business process management seems to be losing interest, a new buzzword to capture a
renewed interest from managers, consultants and software companies. On the other
hand, enthusiasts may argue that Digital Transformation includes novel elements that
deserve due attention and pose interesting challenges for future research. In particular,
the results support that managers should adapt their business strategy to the digital
reality, by integrating new technologies in their business models, which raises the
importance of processes and operations management topic. Scholars, at the other side,
are required to conduct further research to address DT opportunities and challenges.
This article has some limitations. As this literature review is limited to a single term, it
is possible that some relevant articles are missing. A truly comprehensive approach to
produce a systematic literature review also requires the use of more than one digital
repository; therefore, by analyzing other repositories besides ISI, the results obtained
might be different; however, given that our priority is transparency and easy repro-
duction of results this choice may be acceptable when comparing the pros and cons.
We also believe that the methodology used in this article can be reproduced with other
terms. For this reason, we will carry out a new research so that we can compare
different terminologies. Furthermore, ISI database is constantly being updated with new
peer-review articles. Finally, it should be noted that due to space limitations, this article
does not list all the references. References may be provided on request by contacting
the rst author.
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... With the increase in the rise of digital technologies such as mobile gadgets, artificial intelligence, and social networks just to mention but a few, companies have embarked on conducting multiple initiatives as a way of exploring and exploiting the benefits that come with these technologies (Karimi & Walter, 2015;Reis et al., 2018). However, this has impacted the way key business operations are now being conducted thereby affecting end products and processes. ...
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The chapter explores the concept of digitalization and digital technology and its importance. The research is based on a systematic literature review, which analyzed articles on digitalization and digital technologies. However, primacy was given to articles on the digitalization of organizations in a marginalized context. The chapter identified the critical success factors and formulation of a digitalization strategy formulation for the transformation of marginalized communities in Zimbabwe. Therefore, the authors highlight the need to explore human-centered digital transformation capabilities and dynamic capabilities in developing countries. The chapter then formulated a strategy for the digitalization of marginalized communities in a developing context.
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This paper aims to present the model of factors which influence the digital transformation in maritime transport sector. The preliminary model is based on a literature review and interviews conducted to identify the relevant factors influencing the digital transformation of stakeholders operating in the maritime transport sector. In order to test the model, the survey was conducted on the sample of Croatian administrative (port authorities, ministry, harbormaster’s offices, etc.) and commercial stakeholders (freight forwarders, agents, terminal operators, etc.) operating in maritime transport sector. The collected data was analyzed using the partial least squares structural equation modeling (PLS-SEM) approach. The research has shown that organizational, technological, and environmental (TOE) factors affect the digitalization of the organizations in the maritime transport sector. As a result of digitalization, changes in business models are visible: organizations in maritime transport sector generate additional revenue from new sources, provide new services, and introduce new sales channels.
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This article shows the process of carrying out an innovation proposal at the Cali Experimental Theatre (TEC) in the context of isolation measures due to the Covid-19 pandemic. Through a process of “infrastructural inversion” inspired on the canonical work work of Star and Bowker, and following Simonsen and Hertzum, we revealed the deep historical connections that not only the TEC but the entire Colombian theatre movement of the 1960s had with the activists of social change such as workers’ organizations, trade unions and revolutionary movements. We present the iterative process of how this proposal was co-created with leadership of the TEC exposing infrastructural points of resistance and opportunity in the realisation of digital innovation. Our resulting proposal to the TEC reconnects the theatre group with the equivalent current actants of social change, such as independent journalism, citizen movements and non-governmental organizations, through a digital transformation, positioning it not only as a product of artistic quality but also as a social and historical research group. All this without altering the identity and dramaturgical tradition that the group has maintained intact for 65 years of existence. We conclude the paper by discussing the disciplinary paradoxes and sociotechnical limitations faced by this type of innovation requiring a digital transformation of their performing and delivery infrastructures.
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Digitalization and sustainability are central issues in today’s world. Innovation in this area represents catalysts for the development of the circular economy. Digital technologies have the potential to streamline the operation of existing circular business models and thus significantly facilitate the emergence of new ones. The area that has been the subject of research includes tasks such as: product or resource awareness. Along with resources and products, another task is to harmonize the demand side and the supply side. The use of secondary materials or resources must be improved, also increase the longevity of products, and simplify the sharing of product portfolios and, of course, services. All this is taken to some extent as assistance in the process of closing the material cycle or cycles. Among the essential digital technologies that belong to the area of circular economy are Big Data, AI, which is considered one of the most important and best-used systems, for example, the use of so-called chatbots, detailed analysis of the customer and his feedback and is also characterized by to offer of personalization services, Blockchain, Cloud computing, especially in the fields of banks, these are cases of using a network of servers at a greater distance at lower, so optimal costs, 3D printing, but also online platforms. Digitalization can contribute in principle to the functioning of the circular economy and the improvement of resource use with the lowest possible impact on nature and the environment. This paper aims to conceptually define the enterprise digital transformation and sustainable goals after the end of the pandemic. It is also necessary to focus on the consumer perception of the research issue.
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Digital transformation, which often includes establishing big data analytics capabilities poses considerable challenges for traditional manufacturing organizations, such as car companies. Successfully introducing big data analytics requires substantial organizational transformation and new organizational structures and business processes. Based on the three-stage evolution of big data analytics capabilities at AUDI, we provide recommendations for how traditional manufacturing organizations can successfully introduce big data analytics and master the related organizational transformations.
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This paper describes the model of citizens and more generally any person engagement in Digital Transformation processes. Essential barriers that governments, business and people face and should be ready to overcome in the Digital Era are examined. The two-level model of person involvement in the Digital Transformation based on an increase in person’s motivation for acquiring additional competences and participation in the Transformation is suggested. This motivation is ensured by the synergy of person’s multiple roles and subject domains integration. Successful methods and practices in areas of integrated using information about children’s healthcare and education in Russia, the UK, and Canada are presented in evidence of possibility to gain valuable synergy achieved even at the first level of involvement. The schematic chart of the person’s Private Virtual Workplace and interactions in the Digital Society is presented for the second level of person involvement model realization.
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The proliferation of convergence of digital technologies SMACIT (social, mobile, analytics, cloud, and Internet of Things) has created significant threats and opportunities to established companies. Business leaders must rethink their business strategies and develop what we refer to as a digital strategy. Our research shows four keys to successfully defining and executing a digital strategy: 1. zeroing in on a customer engagement or digitized solutions strategy to guide the transformation, 2. building operational excellence, 3. creating a powerful digital services backbone to facilitate rapid innovation and responsiveness, and 4. ensuring ongoing organizational redesign. A list of publications from the research is provided at the end of this document.
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In this article we discuss the futures of work and robotics. We evaluate key future trends in the field of robotics and analyse different scenarios regarding the futures of human beings and work life. Subsequently, we present a roadmap of robotics, which covers key aspects of industrial and service robotics, discuss technology foresight insights and inter-linkages to robotics, and identify three critical technology roadmaps: the technological future of robotics, digitalisation and ICT technologies. Finally, we analyse economic, social, and political key challenges of the digital transformation of work and labour policy in the European Union in general and against the backdrop of the European robotics strategy in particular.
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Cyber-physical systems and “Industry 4.0” will require future engineers to handle big data and complex, multidisciplinary problems as well as to collaborate with machines in “hybrid teams”. As some work spaces will be virtualized or remotely controllable new communication skills and the knowledge of virtual worlds are necessary. Furthermore, working as a team with machines demands not only knowledge of mechanical engineering and machines but also an extended understanding of team working. To meet such challenges future engineers need to acquire new skills and qualification. This task does not only concern engineering students and trainees but also teachers for engineering. Questions about how to prepare for newly needed engineering competencies for the age of Industry 4.0, how to assess them and how to teach and train e.g. human-robot-teams have to be tackled in future engineering education. The paper presents theoretical aspects and empirical results of a series of studies, which were conducted to investigate engineering education in virtual worlds as well as different aspects about team building in hybrid teams.
Conference Paper
Among the most important, and certainly most promising, trends of the last decade is this of digitization. Organizations, and mainly businesses, of various profiles invest lots of money and effort in order to digitize processes, products and offerings. The paper at hand aims to investigate whether the same applies to the public sector as well. A pair of carefully selected indicators (namely Digital Adoption Index and Digital Evolution Index) are applied to a selected sample of countries (namely Germany, Greece, Russia, Spain and United Kingdom) in order for interesting results to be derived.
Conference Paper
Digital transformation requires an enterprise mind-set and impacts every function and business unit of an organization. In the digital environment, digital technology needs to become central to how the business operates, and organizations effectively need to re-think and possibly re-invent their business models, so that they continually learn from interactions with customers, suppliers, and partners in the business ecosystem in order to remain competitive. These changes require a distinct evolution from traditional thinking - changes that some organizations are undoubtedly struggling with. For effective digital transformation, organizations need to expand their focus beyond solely considering technology in isolation, to include the underlying organizational capabilities necessary to be successful with technology. In fact, there is growing acceptance that adopting a capability approach as opposed to a process-based approach to management can result in greater value generation for an organization. Successful digital transformation requires an organization to develop a wide-range of capabilities which will vary in importance depending on the business context and the specific organization’s needs. Time and resource constraints, however, will undoubtedly challenge organizations that attempt to develop multiple capabilities simultaneously, and ultimately may impede the success of the digital transformation. Framed in the context of adopting a capability-based approach to digital transformation, this paper presents a review of pertinent literature, and discusses core learnings in relation to a number of key capabilities that are the foundation for digital transformation. The authors argue that instead of focusing on a holistic set of required capabilities, organizations should initially focus on developing these foundational capabilities, as they serve as a starting point for digital transformation and lead to the development of additional digital capabilities over time. The paper makes a number of contributions. From an academic stance, it conceptualises key foundational digital capabilities. From a practitioner perspective it provides practical guidance to organizations in overcoming key challenges when embarking on a digital transformation journey.