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Digital transformation strategy: a literature review

Conference Paper · February 2019

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Dimitrios Mitroulis Fotis Kitsios

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This is a pre-print version. The final paper is available at: Mitroulis, D. and Kitsios, F. (2019). Digital
transformation strategy: a literature review, Πρακτικά 6ου Φοιτητικού Συνεδρίου της Ελληνικής Εταιρείας
Επιχειρησιακών Ερευνών, Ξάνθη, σελ. 59-61. [see: https://6eeeestudent.files.wordpress.com/2019/06/6eeeestudent-
proceedings-1.pdf]

Digital transformation strategy: a literature review

Dimitrios Mitroulis Fotis Kitsios

School of Information Sciences,
Department of Applied Informatics,
University of Macedonia, Thessaloniki,
Greece.
tm1133@uom.edu.gr
School of Information Sciences,
Department of Applied Informatics,
University of Macedonia, Thessaloniki,
Greece.
kitsios@uom.gr

Abstract
New digital technologies have brought both opportunities and threats to the organisations, especially those whose
success was built οn the pre-digital economy. As a result, firms need to quickly adapt to the digital era in order to
gain competitive advantages and offer added-value to their customers, based on a digital transformation strategy.
Researchers highlight the importance of formulating a digital transformation strategy, although this field has not been
fully investigated. The purpose of this research is to propose a model of digital transformation strategy including
factors that affect decision-making. A systematic review of digital transformation literature was conducted, leading to
a concept analysis and discussion of digital transformation strategy. Based on this review, five dimensions were
identified: use of technology, change in customer experience, changes in value creation, structure changes and
financial aspect of digital transformation. Findings are synthesized as a conceptual model, based on these dimensions,
providing further evidence related to digital transformation strategy and its evaluation. This paper expands the
literature of digital transformation strategy, stating the need for further research.

KEYWORDS
digital transformation strategy, innovation, digital technologies, literature review

1. INTRODUCTION
The implementation of new digital technologies by organisations has caused many changes, leading to digital
transformation. This new form of organisational transformation has a great impact on many different aspects of
the organisation. Internet of things, social media, cloud computing, social media, data analytics and other digital
technologies have transformed the operational processes, value creation and customer experience (Nadeem,
Abedin, Cerpa, & Chew, 2018; Reis, Amorim, Melão, & Matos, 2018). In today's digital era, organisations
should consider their IT strategy not as a functional level strategy, but as a part of business level strategy
resulting to digital transformation strategy (Bharadwaj, Sawy, Pavlou, & Venkatraman, 2013). According to prior
literature reviews, there is still a conflict among the views, frameworks, conceptualizations and definitions of a
digital transformation strategy (Chanias, Myers, & Hess, 2018; Hess, Benlian, Matt, & Wiesböck, 2016; Nadeem
et al., 2018). Digital transformation strategy is still an ongoing area of research, which leads to an immature
literature and inadequate understanding. More research should be conducted in order to make it clear and
enhance the literature.
Despite the prior research, specific guidelines for organisations on how to formulate, implement, and evaluate
digital transformation strategies are still vague and both academics and practitioners need to further investigate
this field. The purpose of this paper is to propose a model of digital transformation strategy including factors that
affect decision-making.
The rest of this paper is structured as follows: section 2 includes the implementation of the literature review
methodology, section 3 includes the presentation of the theoretical background and the suggestion of the
conceptual model, and finally, section 4 concludes the paper.
This is a pre-print version. The final paper is available at: Mitroulis, D. and Kitsios, F. (2019). Digital
transformation strategy: a literature review, Πρακτικά 6ου Φοιτητικού Συνεδρίου της Ελληνικής Εταιρείας
Επιχειρησιακών Ερευνών, Ξάνθη, σελ. 59-61. [see: https://6eeeestudent.files.wordpress.com/2019/06/6eeeestudent-
proceedings-1.pdf]

2. LITERATURE REVIEW METHODOLOGY

This study was conducted following a three-step process, to analyze the literature of digital transformation
strategy, systematically. This process was proposed by Webster and Watson (2002) and consists of three stages:
1) search of relevant papers, selection of the appropriate keywords and databases, and clarification of the
inclusion criteria; 2) backward search and 3) forward search. The source of the data was Scopus and the search
was performed in the title, keywords, or abstract using keywords: "digital transformation" AND strateg*. The
initial search fetched 244 papers. Moreover, a set of inclusion criteria was implemented. These criteria were: i)
the publication should be written in English, ii) the paper should be published in a peer-viewed journal or
conference proceedings, iii) the paper should have full-text available and iv) the subject area should be related to
computer science and business management area. The initial result was 244 articles. However, after the
implementation of the criteria, the result was reduced to 137 articles. Analyzing the titles and the abstracts of
these papers, only 27 papers were considered for further analysis. Moreover, 5 papers were excluded due to not
having their full-text available, leading to a total of 22 papers. Proceeding to the next stages of the methodology,
5 articles were added by the backward search and 1 article was added by the forward search, leading to a total of
28 papers. Finally, the total sum of the article was scanned and distilled, providing the basis for the research
framework.

3. THEORETICAL BACKGROUND
Digital transformation has an impact on different perspectives and serves different goals(Nadeem et al., 2018;
Reis et al., 2018). Fostering a digital transformation strategy, the organisation highlights the transformation of
products, services processes, business models and the implementation of new technologies (Matt, Hess, &
Benlian, 2015). In addition, digital technologies include changes related to customers as end-users of the
products/services. As a result, digital transformation strategies surpass the concepts of process optimization or
process automation. It is important to understand that digital transformation strategy is a designed plan which is
implemented to manage transformations, caused by the integration of digital technologies, in a sustainable way
(Bharadwaj et al., 2013; Matt et al., 2015).
To guarantee the successful implementation of a digital transformation strategy and take advantage of its
effects on the organisation, it is necessary to align four dimensions: i) use of technologies, ii) structural changes,
iii) changes in value creation and iv) financial aspects of digital transformation (Chanias & Hess, 2016; Chanias
et al., 2018; Ghosh, Dohan, & Veldandi, 2018; Hess et al., 2016; Matt et al., 2015). Sebastian et al., (2017)
combined the elements of successful digital transformation: i) digital strategy related to a SMACIT-inspired
(social, mobile, analytics, cloud and Internet of things) value proposition, ii) an operational backbone that leads to
operational excellence and iii) a digital services platform which enables rapid innovation and responsiveness to
new market opportunities. Additionally, the same authors, combined these elements with two digital strategies: i)
digitized solutions strategy and ii) customer engagement strategy. In Figure 1, the digital transformation strategy
conceptual model is presented.

Figure 1. Digital transformation strategy conceptual model

 This is a pre-print version. The final paper is available at: Mitroulis, D. and Kitsios, F. (2019). Digital
transformation strategy: a literature review, Πρακτικά 6ου Φοιτητικού Συνεδρίου της Ελληνικής Εταιρείας
Επιχειρησιακών Ερευνών, Ξάνθη, σελ. 59-61. [see: https://6eeeestudent.files.wordpress.com/2019/06/6eeeestudent-
proceedings-1.pdf]

4. CONCLUSIONS
Digital transformation is considered to be a main issue for many organisations and industries. On the other
hand, the appropriate way to develop a digital transformation strategy has still no answer. In this research, authors
have provided a set of dimensions, based on prior researches, providing an answer to the question. This research
provides some implications for both managers and academics, who deal with challenges related to digital
transformation strategies. So far, limited number of academic studies have focused on digital transformation
strategies, which could affect the generalization of the conceptual model. Further research should be conducted in
order to analyze the key elements of digital transformation strategies and their overall impact on digital
transformation.

REFERENCES
Bharadwaj, A., Sawy, O. A. El, Pavlou, P. A., & Venkatraman, N. (2013). Digital Business Strategy : Toward a
Next Generation of Insights. MIS Quarterly Executive, Vol. 37, No. 2, pp. 471–482.

Chanias, S., & Hess, T. (2016). Understanding digital transformation strategy formation: insights from Europe’s
automotive industry. In PACIS 2016 Proceedings (pp. 296). Retrieved from http://aisel.aisnet.org/pacis2016/296

Chanias, S., Myers, M. D., & Hess, T. (2018). Digital transformation strategy making in pre-digital
organizations: The case of a financial services provider. The Journal of Strategic Information Systems, (January),
pp. 1–17. https://doi.org/10.1016/j.jsis.2018.11.003

Ghosh, K., Dohan, M., & Veldandi, H. (2018). Digital Transformation Strategies for Healthcare Providers :
Perspectives from Senior Leadership. Americas Conference on Information Systems, pp. 1–5.

Hess, T., Benlian, A., Matt, C., & Wiesböck, F. (2016). Options for Formulating a Digital Transformation
Strategy. MIS Quarterly Executive, Vol. 15, No. 2, pp. 123–139. https://doi.org/10.1108/10878571211209314

Matt, C., Hess, T., & Benlian, A. (2015). Digital Transformation Strategies. Business & Information Systems
Engineering, Vol. 57, No. 5, pp. 339–343. https://doi.org/10.1007/s12599-015-0401-5

Nadeem, A., Abedin, B., Cerpa, N., & Chew, E. (2018). Editorial: Digital transformation & digital business
strategy in electronic commerce - The role of organizational capabilities. Journal of Theoretical and Applied
Electronic Commerce Research, Vol. 13, No. 2, pp. i–viii. https://doi.org/10.4067/S0718-18762018000200101

Reis, J., Amorim, M., Melão, N., & Matos, P. (2018). Digital Transformation: A Literature Review and
Guidelines for Future Research. In Τrends and Advances in Information Systems and Technologies.
WorldCIST’18 2018. Advances in Intelligent Systems and Computing. Vol. 747, pp. 411–421.
https://doi.org/https://doi.org/10.1007/978-3-319-77703-0_41

Sebastian, I. M., Ross, J. W., Beath, C., Mocker, M., Moloney, K. G., & Fonstad, N. O. (2017). How Big Old
Companies Navigate Digital Transformation. MIS Quarterly Executive, Vol. 16, No. 3, pp. 197–213.
https://doi.org/10.1017/S0021859600058731

Webster, J., & Watson, R. T. (2002). Analyzing the past to prepare for the future: writing a literature review. MIS
Quarterly, Vol. 26,No. 2, pp. 13–23.

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