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IJIS
12,1 Reaching sustainability during
a digital transformation:
a PLS approach
52 Wail El Hilali, Abdellah El Manouar and
Mohammed Abdou Janati Idrissi
Received 9 September 2019
Revised 8 November 2019 Mohammed V University of Rabat, Rabat, Morocco
6 December 2019
Accepted 16 December 2019

Abstract
Purpose – In a world where big data have become crucial to guarantee the success of companies, digital
transformation came to help companies transition towards a digital business and accept the changes in
the organizational structure as well as the market. Nonetheless, even with the ever-growing importance
shed on it, few articles and studies have linked it to the sustainability paradigm. Empirical studies that
have linked between the factors of digital transformation and a more sustainable business are still scant.
Many efforts are still needed to reduce the knowledge gap between these two concepts. The purpose of this
paper is to fill this gap by examining (empirically) the effect of digital transformation on sustainability.
Design/methodology/approach – The study validates five different hypotheses highlighted by the
literature using structural equation model (SEM) analysis from partial least square (PLS) approach. It uses a
new conceptual framework using a survey data, answered by 41 small- and medium-sized enterprises (SMEs)
in Morocco from different industries.
Findings – Using PLS-SEM modeling, the results show that customers, data and innovation, which are
drivers that companies should work on during a digital transformation, have a significant impact on
companies’ quest to reach sustainability. However, and in contrast to the existing literature, authors
find that competition did not play a significant role in enhancing the companies’ commitment to
sustainability.
Practical implications – Authors’ findings encourage firms to seize the opportunity of digital
transformation to embrace sustainability, because the implementation of these two concepts requires radical
changes at the business model level. Authors suggest that the road to achieve sustainability in a digital era
should focus on three main axes, enhancing the customer experience and adopting customer centricity,
building data analytics capabilities and shifting innovation to the business model level.
Originality/value – To the best of the authors’ knowledge, this study is one of the first research papers
that explain how to reach sustainability during a digital transformation. The originality of this paper lies in
the fact that it focuses on SMEs as they remain the backbone of the Moroccan economy. This study is also
novel for showing with empirical evidences that working on the axes of customers, data and innovation,
during a digital transformation journey, will improve sustainable practices within businesses.
Keywords Sustainability, Digital transformation, PLS approach, Digital capabilities
Paper type Research paper

1. Introduction
Many companies are facing nowadays a fierce competition from both existing players and
new entrants. Business risk of disruption has become a reality in the digital world, making
International Journal of Innovation
Science
entire industries at the mercy of the rise of a new technology (Albinson et al., 2016). In this
Vol. 12 No. 1, 2020
pp. 52-79
new context, changing the way we are doing business has become necessary. Digital
© Emerald Publishing Limited transformation emerged as an imperative alternative to the classic way of doing business.
1757-2223
DOI 10.1108/IJIS-08-2019-0083 As Redhat (2018) stated, almost every keynote, panel discussion, article or study related to
how to remain competitive in the digital era is referring to the concept of digital Reaching
transformation. sustainability
Digital transformation is reinventing business by creating new revenue streams in new
ways (Wiles, 2019). New and adapted business models were crafted by companies to be able
to capture value in the digital age. Becoming a customer-centric company, outdoing the
competition, exploiting the tremendous opportunities that digital capabilities offer and
possessing innovation capabilities are what firms look for during a digital transformation
(Carayannis and Hanna, 2016). 53
On the other hand, managers and academics are still looking for the ultimate way to
reach sustainability. Victor and Dolter (2017) did not exaggerate when the concept of
sustainability was described as the “Holy Grail” to look for. Diverse research papers were
published, discussing reaching sustainability from different points of view. Many of them
have explored the roads to reach sustainability (Rothenberg, 2007; Nidumolu et al., 2009;
Eccles and Krzus, 2010; Gray and Stites, 2013; Abu-Tayeh and Myrach, 2016; Joyce and
Paquin, 2016), yet very few papers discussed the link between sustainability and digital
transformation. This paper is an attempt to enrich the published literature by discussing
how to seize the opportunity of digital transformation to sustain a given business. Five
hypotheses were highlighted from the literature and were the subject of an empirical
analysis.
Empirical investigations and quantitative methods are based on observed and measured
phenomena and derive knowledge from actual experience rather than from theory or belief
(Libraries, 2019). They are heavily used in the business disciplines and in the field of global
strategy (Bontis, 2000). Their objective is to study a particular topic across organizations to
find out trends and patterns (Myers, 2019). Brandimarte (2012) also recommends using a
quantitative analysis if the purpose is to shed some light on the relationships between two or
more variable of interest.
Our conceptual model was validated by a partial least squares path modeling approach
(PLS-PM), which allows to estimate complex cause–effect relationship models using latent
variables (Hair et al., 2013).
The following sections describe the theoretical background, the conceptual model of the
study, the methodology used, discussion of the results and conclusions.

2. Problem statement
Companies are in need to invest in sustainability to continue creating value. As there is no
“secrete sauce” that explains how to reach sustainability, it would be judicious to explore the
possibilities that digital transformation offers to firms regarding sustainability.
In fact, digital transformation is an emerging concept that looks different for every
company. It is about integrating radical changes at the business model level to continue
creating and capturing value in the digital era.
Today, only few academic articles assessed the impact of this transformation on a firm’s
sustainability commitment. In addition to that, we did not succeed to find any empirical
study that has been done before to investigate the relationship between the two concepts, in
the context of an emerging economy that relies on small- and medium-sized enterprises
(SMEs). This paper provides an empirical study that shows, with evidence, the positive
impacts of digital transformation on companies’ commitment to sustainability.

3. Research objectives
Our research aims to enrich the literature on both the two concepts by addressing the
identified gap and discussing how to seize the opportunity of digital transformation to
IJIS sustain a given business. Accordingly, our empirical study has the following specific
12,1 objectives:
(1) to inspect, with empirical evidence, whether a company could enhance its
corporative sustainability initiatives during a digital transformation; and
(2) to examine the factors that influence a company’s quest for sustainability
positively during a digital transformation journey.
54

4. Literature review
Our literature review is centered on our main research question: “Could companies achieve
sustainability during a digital transformation?”. In the attempt to answer this question, we
will define the concepts of sustainability and digital transformation and we will develop the
main hypothesis of our research model.

4.1 Sustainability: from ideas to actions

Sustainability, sustainable use, sustainable development and Green are feel-good and
attractive words that are used a lot in this day and age regarding environmental and/or
social issues, reflecting an engagement to solve these problems. Though close in meaning,
their definitions are slightly different.
The word “sustainable,” in the modern sense, appeared for the first time on March 1976
in a report called “limits to growth” (Enders and Remig, 2014) written by a group of MIT
scientists where they linked sustainability to a world:
[. . .] without sudden and uncontrollable collapse’’ (Enders and Remig, 2014). A widely and well
known definition of sustainability relates and likens this concept to a three-legged stool (Newport
et al., 2003) where environment, society and economy represent the three dimensions of
sustainability.
While the concept of “sustainable use” is usually linked to a system S with regard to a
function F and a period L (Hilty and Aebischer, 2015). Sustainable use of S means that this
system is used in a way that does not:
[. . .] compromise its ability to fulfil F for a period L “(Hilty and Aebischer, 2015). As for
sustainable development, the World Commission on Environment and Development linked it to
well-being by defining it as “development which meets the needs of current generations without
compromising the ability of future generations to meet their own needs” (Brundtland, 1987).
However, the concept of Green is more related to nature and environment, and it is by
definition, included in the concept of sustainability explained above (Werbach, 2009).

4.2 Sustainability: the Moroccan context

The kingdom is fully and firmly committed to sustainable development and environmental
responsibilities. This is clearly reflected in its recent hosting of the United Nations Climate
Change Conference, known as COP22. The purpose of the conference was to discuss and
implement actions about combatting climate change and to “demonstrate to the world that
the implementation of the Paris Agreement is underway” (Change, 2016).
Morocco has also adopted the National Sustainable Development Strategy. Its key
objectives, as stated, are to combine competitiveness and sustainability regarding the
economic pillar, to ensure human development and social cohesion and to systematize the
environmental issues consideration (Ministry Delegate of the Minister of Energy, 2014).
 Moroccan companies have also undertaken efforts in echo to this national strategy. Reaching
According to Bouchikhi (2016), several large Moroccan firms are conscious of the gravity of sustainability
the energy question and have undertaken significant initiatives in this field. Some
companies, such as Cherifien Office of Phosphates which is the largest company in the
country and a world leader in the fertilizers market, have adopted an integrating reporting
that listed its actions in favor of sustainable development.
Cherkaoui (2016) conducted a perceptual sensitivity analysis of owner-managers of 55
Moroccan SMEs regarding their commitment to sustainability. The findings showed that
the degree of knowledge of the concept of sustainability depends closely on the company
size. The greater the size, the more the company is steeped in sustainability. The authors
also found that the SME managers tend to link sustainability to its social dimension and the
well-being of the employees, ignoring its economic and environmental dimensions. As
regards the actions, they are limited to the legal minimum and tend towards a simple legal
compliance (Cherkaoui, 2016).

4.3 Small- and medium-sized enterprises in Morocco

Two criteria were considered in the official definition of the SME Charter (Mohammed and
Hicham, 2018). To be considered as an SME, existing companies had to have:
(1) less than 200 permanent employees; and
(2) an annual turnover excluding tax that does not exceed MAD 75M, and/or a total
balance sheet limited to MAD 50M.

A new definition was proposed by Maroc PME in 2011, which is the national agency for the
promotion of SMEs. The definition considers only the criterion of the turnover and ignores
the staff headcount (ARIF, 2011). Three types of companies are distinguished:
(1) micro companies with an annual turnover less than MAD 3M;
(2) small companies having an annual turnover between MAD 3M and MAD 10M;
and
(3) medium-sized enterprises with an annual turnover between MAD 10 M and MAD
175 M.

SMEs are the backbone of the Moroccan economy. They provide the main source of
employment, accounting for 60 to 70 per cent of jobs on average, and are major contributors
to value creation, generating about 40 per cent of value added (Tilfani, 2011).
SMEs are present in all sectors of the Moroccan economic activities. Their performance
varies across sectors. In agriculture, they account for about 78.19 per cent of value added. In
contrast, they contribute less in manufacturing and production sectors.

4.4 From digitization to digital transformation

Digitization, digitalization and digital transformation are three terms that are used
everywhere at the moment. Even their meanings are closed and related, the three concepts
are quite different (Brennen and Kreiss, 2014). This section is an attempt to understand the
distinction between the three concepts before getting to the heart of the matter, how to reach
sustainability during a digital transformation.
4.4.1 The concept of digitization. The oxford dictionary defines digitization as the
process of:
IJIS [. . .] conversion of text, pictures, or sound into a digital form “(Dictionary, 2018). In their paper,
(Schallmo and Williams, 2018) tracked multiple definitions of this concept from both academics
12,1 and industry experts. Cisco (Surber, 2017) went into more depth when they defined digitalization
as “the connection of people, process, data and things to provide intelligence and actionable
insights enabling business outcomes.
This definition brings us to a broader meaning of digitization, by including the perspective
56 of processes too. Clerck (2017) linked digitization to automation and highlighted the fact that
transforming physical data to a digital form is done for a reason, which is automating
business processes and workflows. A report of PricewaterhouseCoopers (PwC) (Sabbagh
et al., 2012) listed many benefits of digitization that can be measured across six attributes,
which are ubiquity, affordability, reliability, speed, usability and skills. The report also
highlighted the positive impacts of digitization on the economic strength, societal well-being
and effective governance.
Digitization in itself is not the ultimate goal to reach. In fact, it is only a major milestone
to reach a more interesting objective, which is succeeding in the digital transformation of a
given business.
4.4.2 The concept of digitalization. Clerck (2017) defined digitalization as:
[. . .] the use of digital technologies and of data (digitized and natively digital) in order to create
revenue, improve business, not simply digitizing them, but to transform business processes (not
simply digitizing them) and create an environment for digital business, whereby digital
information is at the core”.
This definition widens a little bit meaning of digitalization by talking about transforming
business processes. In our point of view, digitalization can be considered as a stepping-stone
toward a fully digital business. It uses digitalized data (resulted from the concept of
digitization) and cutting-edge technologies to improve existing business processes.
This concept is not totally new, as it first appeared in 1971, figuring in an essay
published in the North American Review (Jensen et al., 2016) by Robert Wachal.
4.4.3 The concept of digital transformation. Digital transformation is the next step of
digitalization. It is a polysemous word that is used a lot recently by both academic scholars
and practitioners. Sugahara et al. (2017) listed numerous definitions of this concept from
different viewpoints. Stolterman and Fors (2004) proposed a broad definition of the concept
by linking digital transformation to changes and influencing impacts of digital technology
vis-à-vis all aspects of human life. The consulting company Capgemini, with the
collaboration of MIT Center for Digital Business, linked digital transformation to
performance by defining it as “The use of technology to radically improve performance or
reach of enterprises” (Westerman et al., 2011). They also identified three axes to work on in a
digital transformation of a given business: customer experience, operational processes and
business models. A precise definition was introduced by Thomas et al. (2016), highlighting
the fact that digital transformation is concerned with “changes that digital technologies can
bring about in a company’s business model, products, processes and organizational
structure.”
Rogers (2016) identified five domains of strategy that digital is changing: customer,
competition, data, innovation and value proposition. These axes were also discussed by
Uhl and Gollenia (2016). The authors found that customer centricity, innovation capability,
operational excellence using data capabilities and a competitive mind-set are keys to
succeed in transforming a firm digitally to remain competitive in the future.
4.4.4 Digital transformation: review of relevant frameworks. The following sub-sections
review several conceptual and theoretical frameworks (from both the academic and business
worlds) to adopt to succeed in the digital transformation journey. The common thread in all Reaching
these frameworks is that digital transformation is not just about technology. It is about sustainability
transformative changes that affect the way the value is created and captured inside a given
company.
4.4.4.1 The transformative business model framework. Kavadias et al. (2016) argue
that there are six features that make a business model transformative. These six
keys, which were developed based on the outcome of in-depth analysis of 40
companies, are:
57
(1) A more personalized product or service to reinvent the customer experience.
(2) A closed-loop process that replaces the traditional linear consumption process.
This will help to reduce the companies’ overall resource costs.
(3) Asset sharing through a platform that link two or more interdependent groups.
(4) Usage-based pricing rather than requiring customers to buy products or services
outright.
(5) A more collaborative ecosystem by embracing technology to increase supply chain
performance.
(6) An agile and adaptive organization to make decisions that “better reflect market
needs and allow real-time adaptation to changes.”

4.4.4.2 The Digital Orchestra framework. This framework was published by the Global
Centre for Digital Business Transformation (Wade et al., 2017). The idea behind it is that
decision-makers must determine what type of value they want to create, and decide the
strategic options for achieving it. The framework identifies ten areas, grouped in four
sections, that companies must actively consider during a digital transformation. The areas
and sections are as follows:
(1) Go-to-Market: Which will discuss the offering and the channels.
(2) Engagement: How will the company engage differently with key stakeholders:
customers, partners and workforce?
(3) Operations: Which new technology capabilities do the company need and how it
will create new business processes?
(4) Organizations: How should the company change its structure, incentives and
culture to support the new operating model?

4.4.4.3 Cognizant’s digital transformation framework. The framework proposed by Corver

and Elkhuizen (2014) is built on four key items: customers, products and services, operations
and organizations. According to the authors, the digital transformation journey starts by
digitalizing the customer experience. By leveraging customer insights and using new
channels of interaction so that companies could serve their customers in the best possible
way. The next step is to digitalize the products and services. Organizations today
“increasingly realize they can no longer focus on just selling products and they need to sell
an experience.” By using sensors, companies could for example monitor the usage of their
products and offer additional services such as predictive maintenance. Next comes
operations. Advanced digital technology, aided by sensors, can improve business processes
in several ways. Finally, companies must digitalize their organizations, as employees need
to work together in a new way, breaking down silos and collaborating across different
departments for more creativeness and agility.
IJIS 4.4.4.4 MIT’s digital transformation framework. MIT, with the collaboration of
12,1 Accenture (Westerman et al., 2011), published a framework of three building blocks that
have to be object of a digital transformation. The framework is the result of a study of 50
large companies (with $1bn or more in annual sales) in 15 countries. To move forward in the
transformation journey, companies must first transform the customer experience by
building data analytics capabilities to understand deeply the customers’ needs and
58 preferences. Transforming internal processes is the second block. The authors found that
the interviewed companies focused on process digitization, virtualizing individual work and
performance management to transform their internal processes. The last block to transform
is the business model, which is done by reshaping the companies’ boundaries through
digital.
4.4.5 Digital transformation in Morocco. The digital transformation in Morocco is
gradually taking place in various sectors of activity. This dynamic is the result of an
ambitious national strategy called “Maroc Digital 2020,” sponsored by the government in a
bid to boost the development of the digital economy sector (Guerraoui, 2019). The ultimate
goal is to reinforce the North African country’s position as a regional digital hub and
enhance its digital skills and governance.
A survey, conducted by El Hilali and El Manouar (2018) among 15 well-established
Moroccan companies from different industries, found that 87 per cent of the questioned
firms have taken a digital transformation initiative. The vast majority of the questioned
companies linked their digital transformations to the enhancement of the customer
experience, the adoption of cloud computing, the integration of the mobile as a channel to
reach customers and the use of big data. The ONPM (The Moroccan Observatory of
Management Practices) published a recent study on digital transformation and industry 4.0
inside the kingdom (Taleb, 2019). Out of these, 77 per cent of the questioned SME managers
affirmed being aware of the industry 4.0 phenomenon. The survey noted that 30.8 per cent of
questioned managers affirmed that a digital transformation initiative has been taken up or
is under consideration in their companies, which remains relatively low.
While digital transformation offers SMEs opportunities to innovate and grow, significant
barriers remain preventing the realization of these opportunities, and slowing the process of
digitalization within this market segment. According to Dubosc (2019), financial means may
play a part in this equation. The limited capital availability of SMEs in comparison to large
enterprises, places a constraint on the ability of these companies to invest in a digital
transformation.

4.5 Hypotheses development and research model

Digital transformation is about using digital capabilities (such as big data, IoT and cloud
computing) to revolutionize the customer experience, to outdo the competition and to create
an innovative business model adapted to this era (Westerman et al., 2011). To link it with
sustainability, a digital transformation should help companies to increase their financial
numbers, their social footprint on communities and to reduce their negative externalities on
environment.
We decided to work on four components linked to digital transformation as we have seen
in Section 3.4.3 to frame hypotheses. These components are customers, data, innovation and
competition. Below is the explanation of each element.
4.5.1 Customers. Customers are at the heart of any digital transformation. Transforming
the customer experience is a common thread between all the frameworks reviewed in the
Section 3.4.4. This appears also in a detailed comparative study, carried out on eight digital
transformation frameworks, published by Nwaiwu (2018).
 In the digital era, customers are no longer seen as a mass market but as a dynamic Reaching
network instead (Rogers, 2012). This network has all the capacity to broaden the market sustainability
share of a given business as advertisements, feedbacks and recommendations can go viral.
Transforming a business into a digital one gives the company some sort of flexibility to
experiment its products (via Minimum viable products) (Gholami et al., 2016), and to pivot in
case of any negative feedbacks from customers. All these points help the company to
increase its market share, its revenues and its customers’ satisfaction.
Furthermore, in the digital age, the customer has the ability to collaborate and to 59
contribute in the funding (through crowdsourcing), the creation and the enrichment of the
product. Take, for example, the WAZE application (Afonso et al., 2017) that uses data
collected from customers’ phones to get a real-time image on the traffic. By making
customers involved in the continuous improvement process of the application, the company
has succeeded in creating a loyal network, which justifies the huge amount of $1.1bn paid by
Google to acquire the company.
Additionally, experts are recommending platform thinking concerning the nature of
products to develop in the digital age (Parker et al., 2016; Rogers, 2016). A platform was
defined by Rogers (2016) as “a business that creates value by facilitating direct interactions
between two or more distinct types of customers.” A platform business model can create a
win-win situation, where customers have access to a secure market place, helping them to
earn an income. Companies like Uber and Airbnb succeeded in lowering the unemployment
rate (Dillahunt and Malone, 2015) even if it has disturbed entire industries (Mauborgne and
Kim, 2017). Other companies chose to combine traditional and platform business models, to
maximize their revenue while giving customers the opportunity to earn money (Amazon for
example). Facebook, the social media giant, has followed as well the trend by launching
recently a new feature called “Marketplace” (GRIFFIN, 2016), where connected users can
buy and sell products and services. In fact, the users benefit from a virtual market place
where Facebook enriches its data assets about its users. Platform business models
contribute also in the social development of communities from an educational point of view.
Massive open online course (MOOC) solutions, such as Coursera and Edx, are examples of
platforms that link people with universities from all over the world, proposing a large choice
of both free and paid educational contents.
Moreover, accessibility has been put in the digital world at the forefront while developing
any business idea (Gamage, 2016). Creating accessible websites, digital materials and
remote workstations reduce the carbon footprint of companies caused by the employees’
daily commute from home to work and by brick and mortar stores’ impacts on environment.
Companies could also seize the opportunity of having established communication channels
with customers to sensitize them about the fact that sustainability is everyone’s
responsibility. The sensitivity of customers to sustainability was the subject of a report
published in 2015 by Nielson (Nielsen, 2015). In fact, the result of a survey has shown that 66
per cent of interviewed customers would pay more for a product or a service if the company
were committed to affect positively both society and environment. Hence, we summarize
that:

H1. Customers in the digital era have a positive influence on companies’ commitments
to sustainability.
4.5.2 Competition. Competition is seen differently in the digital age. In fact, a relatively
recent concept called “Co-opetition” has changed the traditional way companies are
competing (Dagnino and Padula, 2002; Rogers, 2016). The rivalry between companies in
some areas does not impede their collaboration in other fronts. Apple, for example, uses
IJIS different features from its competitors. It incorporates Samsung’s OLED screen in their new
12,1 generation of iPhone, as well as Google Maps knowing that Apple owns a map solution
called Maps. Companies are thinking differently in the digital age, every opportunity is to
seize even it means that you have to collaborate with your sworn enemy.
Digital transformation is also the opportunity for a company to go beyond a competitive
advantage in a red ocean business environment (Mauborgne and Kim, 2017). Digital
60 transformation means blurring boundaries and breaking barriers to create and capture new
kind of value from adjacent markets. Take for example Orange, the French operator, which
launched recently “Orange bank,” a new online bank (Nikolaeva et al., 2017). In four months,
the Telco has succeeded in attracting more than 100,000 customers. By betting on a digital
strategy, Orange is aiming “to steal share from established lenders” (Nikolaeva et al., 2017),
taking advantage from its technological superiority.
Additionally, collaboration between competitors is possible in the digital age. Businesses
are banding together to learn from each other. As an example, Facebook, Amazon, Google,
IBM and Microsoft have formed new Artificial Intelligence (AI) alliance to improve the
living conditions of society (Hern, 2016). According to the coalition’s announcement (Horvitz
and Suleyman, 2019), the objective is:
[. . .] to invest more attention and effort on harnessing AI to contribute to solutions for some of
humanity’s most challenging problems, including making advances in health and wellbeing,
transportation, education, and science.
For sure, these companies have seen from solving social problems a business opportunity to seize
and a way to create what Michael Porter named as “Shared value” (Porter and Kramer, 2011).
The point to highlight is that alliance and synergies could emerge from a fierce competitive
digital environment for the sake of society.
The competition on the field between businesses has moved to another level. Companies
are shining their brand images by publishing and revealing their carbon footprints. Tech
firms are also racing to reach a 100 per cent renewable energy target (Moodie, 2016). Google,
for example, has tweeted in November 2017 that its datacenters and its offices are officially
running on clean energy (Google, 2017). Facebook also was one of the pioneers to promote
the use of clean and renewable energy. Thus, we postulate that:

H2. Competition in the digital era has positive influence on companies’ commitment to
sustainability.
4.5.3 Data. Facing a data deluge! This is how academics are describing the huge amount of
data that is generated everywhere and anytime (Carayannis and Hanna, 2016). Big data has
changed the game’s rules, as it becomes a strategic asset. According to statista.com, the
global big data market size is about 34 billion US dollars in revenue (Statista, 2018).
Rogers (2016) categorized data, in the digital age, in three different types:
4.5.3.1 Business process data. Business process data are gathered from business
operations and processes that constitute the value chain of a given business. It is used to
optimize business operations to increase efficiency and reduce cost. Data on inventories and
on supply chain could be used for example to implement just-in-time inventory systems,
reducing meaningfully the costs and the risks of any shortage.
4.5.3.2 Product or service data. Product/service data are mandatory data used to deliver
the value proposition of a given product or a service (Immonen and Saaksvuori, 2013).
Business data for yahoo finance is a good example of this category of data. The company
cannot deliver to its business customers what they are looking for without these data.
The more product/service data a company is having, the more the value of the product is Reaching
increasing. sustainability
4.5.3.3 Customer data. Verhoef et al. (2016) distinguishes between two types of customer
data: data on the supply side and others on the demand side:
(1) Data on the supply side: Data related to the historical products and services
purchased or used by the customer.
(2) Data on the demand side: Data that describe the behaviors, expectations, 61
satisfaction and interactions of the customer with the organization.

As seen in our review of digital transformation frameworks (Section 3.4.4), companies should
develop data analytics capabilities to enhance the customer experience. Customer data provide
a complete picture on customers and enhance the relationship between the two stakeholders.
Treating and parsing the unstructured data will help to identify customers’ needs and turning
them into business opportunity to seize. Starting from this premise, we presume that:

H3. Data in the digital era enhance the relationship between companies and customers.
Having a positive impact on society starts by identifying the social needs of customers.
There is no better way to dig out community than analyzing and treating the huge amount
of data coming from social media. Companies could either see it as a part of its corporate
social responsibility or a business opportunity to seize to give birth to a “shared value”
(Porter and Kramer, 2011). Shared value is relatively a new business concept that emerged
recently. It incites businesses to prioritize solving social and societal needs while still
looking for more value to capture (Wieland, 2017). It is a way to create a win-win situation
where all the stakeholders get a piece of the pie.
IDesouza and Smith (2014) deconstructed the world of big data and showed how data
sets are not applied adequately to social innovation. The same article listed few obstacles
that impede the use of big data to tackle social problems such as the unreliability of data that
could emerge from social media. It proposes also four steps to increase the use of big data,
which are building global data banks on critical issues, engaging citizens, building a cadre
of data curators and analysts and promoting virtual experimentation platforms.
Furthermore, big data can play a tremendous role concerning environment. In fact, the
usefulness of big data appears in its ability to help companies understand and measure the
impacts of their operations on the environment (Salvatore and Carmine, 2014). In addition to
that, data were always the key for assessing ecological risks (Glenn, 2007). With the rise of
big data, many tools have emerged that monitor and assess risks using various parameters
from the field (Magdziarz et al., 2017) such as AQUA-DUCT.
Another added value of big data is its contribution in helping companies to optimize the
usage of resources. According to YIFAT (2017), “Big data can take decisions about resource
use to the next level.” In fact, the consumption of energy and other resources could be
tracked in real time using relevant data produced by what the author called a new
generation of “smart” meters and sensors (YIFAT, 2017).
Regulation could also be another advantage of the use of big data. Better environmental
regulation could be ensured if data collected from sensors were used while crafting
government policies related to environment. Focusing on this perspective, we infer that:

H4. Data in the digital era will enhance the companies’ commitment to sustainability.
4.5.4 Innovation. In the digital era, the way the word innovation is conceived has changed.
Even if “digitalization came hand in hand with product innovation,” the real source of
IJIS innovation is to implement creative changes in the business model (Zott and Amit, 2017).
12,1 Business model innovation concept gives companies the opportunity to deliver value in a
new way by reinventing two or more elements of the business model (Lindgardt et al., 2009).
It gives the possibility to create new kind of value and new way to reach customers.
Linking sustainability to business model innovation was subject of many academic
papers in the literature. (Foss and Saebi, 2017) identified and analyzed 150 peer-reviewed
62 scholarly articles on business model innovation published between 2000 and 2015. Evans
et al. (2017) listed many propositions, which lay down the foundational concepts for
innovation towards sustainable business models. These propositions could be summarized
in the following bullet points:

The sustainable value through a business model innovation should incorporate
economic, social and environmental benefits as value forms.

An innovative business model requires the design of a new purpose, value
proposition and governance.

An innovative business model requires the creation of a system of sustainable value
flows that include all the stakeholders.

Innovation in term of business models benefited from the relative ease to conduct
experiments in the digital era. Rogers (2016) argues that testing ideas has become cheap, fast
and easy inside digital companies compared to classic businesses. Furthermore, these
experiments are conducted constantly and oriented problem-solving. The use of minimum
viable products (MVP) was also trivialized in the digital era to test the project’s value and
the entrepreneur’s growth projections (Moogk, 2012).
In addition to that, a recent concept called “Digital social innovation” has emerged as a
new approach in the social innovation filed that “leverages digital tools to address societal
challenges” (Andrea, 2017). Digital technologies come to reinforce the impact and the
footprint of the world of business regarding society. Kramer and Porter were among the
pioneers to formalize the role of business towards society with the concept of “shared value”
(Porter and Kramer, 2011). This concept prompts companies to prioritize solving social and
societal problems while still looking to capture value. Companies should bear in mind this
spirit and seize the opportunity of digital transformation to pivot and direct their innovation
to solve social and societal problems.
There are numerous examples of digital social innovations that helped to improve the
well-being of citizens. The application named:
Ushahidi “for example was designed to map violent acts following the 2008 elections in Kenya by
collecting and broadcasting information collected by citizens about urban violence (Rotich, 2017).
Another example of a Digital social innovation is the Egyptian application HarassMap that
allows women to report instantaneously any case of sexual harassment.
This crowdsourcing solution protects women from crossing dangerous areas thanks to the
digital technology (Johnson, 2014).
The above examples underline a common goal to all digital social innovation solutions,
which is solving a social or a societal need using an innovative technology. The business
model and the technology used could differ from a solution to another, improving by that the
well-being of citizens.
Digital transformation through innovation has also brought new solutions that have
played major roles to solve ecological problems. Platforms business models, for example,
and specially sharing economy solutions have strongly benefited the ecology from reducing
the amount of goods needed to be produced and the waste to recycle. Other solutions such as
Uber have reduced the number of vehicles on the road, minimizing by that the impacts of Reaching
transportation on the environment. sustainability
Furthermore, the emergence of the internet of things (IoT) has enabled the delivery of
huge amount of data, offering by that valuable information to manage effectively the natural
resources and to avoid disasters.
IoT has invaded many fields. Agriculture for example has benefited from valuable
information generated by connected devices that analyses the soil to decide about water
needs for a smarter irrigation (Lambert, 2017). 63
By corroborating the arguments, we infer that:

H5. Innovation in the digital era is a key driver of companies’ commitment to

sustainability.
All in all, based on the theoretical developments and hypotheses described, this study
advances the following research model (Figure 1).

5. Methodology
5.1 Research design and sample
To examine the relationships between the variables, cross-sectional data were collected from
41 SMEs in Morocco. Morocco and SMEs were selected for two reasons. Firstly, Morocco is
moving toward a digital economy. The kingdom is betting on digital transformation to
achieve a qualitative leap in economic and social development. Secondly, SMEs are the
backbone of the national economy as stated is Section 3.3. Because of their size and simpler
structure, they are more flexible and will have a greater capacity to adapt to changes.
The selection criterion for responding firms was that the firms must be SMEs and
operating in service industries such as information technologies (IT), finance, consulting,
transportation, media, marketing and sales. These sectors deal more with digital capabilities
and are the most digital according to Gandhi et al. (2016). In view of time constraints and the
absence of a national database that we can take as reference, the sampling technique used in

Competition

H2

Customers H1

H3 Sustainability

DATA H4

Innovation
H5 Figure 1.
The research model
IJIS this study was non-probability convenience sampling method. The survey was conducted
12,1 between October 2018 and February 2019. Contacts of firms were acquired from the internet.
First, phone calls were made to identify the right respondents and to get their emails. Next,
emails with a cover letter and the online link to the survey were sent to the potential
respondents. The target sample size in this study was 150. We achieved a response rate of
about 27 per cent yielding a final sample of 41. Sample characteristics are presented in
64 Table I).
To honor ethical values, survey participants agreed that the collected data could be
shared and published for scientific purposes, in an anonymous form.

5.2 Measures
The measurements were developed based on a comprehensive investigation of existing
literature. The survey was divided into two sections: the first section was designed to collect
information on respondents’ demographic profile, whereas the second section contained
measurements on theoretical constructs for the present study. All the constructs are
measured reflectively and the participants were requested to specify the degree of their
agreement/disagreement with each statement using a five-point Likert scale, where “1”
shows a strongly disagreement and “5” illustrates strongly agreement.
The items that composed the survey covered the five axes discussed above, namely,
competition, customers, data, innovation and sustainability. The constructs and items used
in the questionnaire are displayed on Table II.

5.3 Method
To properly assess our measurement and structural model, a component-based PLS-SEM
analysis was performed. SMART PLS 3.2.7 was used as a tool to analyses our data to
validate our model and verify our hypotheses. The choice of using PLS-SEM was made on
the base of its ability to estimate causal relationships among all latent constructs
simultaneously, while dealing with measurement errors in the structural model (Hair et al.,
2016).
Moreover, and according to Sinkovics et al. (2016), PLS-SEM is appropriate to use as the
goal is to identify key drive construct, the simple size is small and the data are no normally
distributed. The same reference argues that using PLS-SEM approach is equivalent to
assess two models: the measurement model (outer model) and the structural model (inner
model). Figure 2 shows in details the steps needed to process a PLS-SEM analysis.
5.3.1 Assessment of the measurement model.
5.3.1.1 Convergent validity. The convergent validity shows the degree to which each
measurement item correlates strongly with its assumed theoretical construct (Gefen and
Straub, 2005). It is measured by Garson (2016):

The indicator reliability that denotes the proportion of the indicator variance that is
explained by the latent variable. Indicator loadings should surpass the critical
threshold of 0.7.

The composite reliability to evaluate internal consistency reliability. The results
should exceed the threshold value of 0.7.

The average variance extracted (AVE) that shows how much a measure correlates
positively with alternative measures of the same construct. Each calculated AVE
should be above the critical threshold of 0.5 to be confirmed.
Variables (%)
Reaching
sustainability
Characteristics of the owner-managers
Gender
Male 34 82.9
Female 7 17.1
Age
< 30 6 14.6
65
30-40 15 36.6
41-50 14 34.1
>50 6 14.6
Education
No qualification 3 7.3
High school diploma 9 22
Bachelor’s degree 15 36.6
Master’s degree 12 29.3
PhD 2 4.9
Characteristics of the enterprise
City
Casablanca 26 63.4
Rabat 9 22.0
Tangier 6 14.6
Sector of activity
IT 15 36.6
Finance 6 14.6
consulting 7 17.1
Transportation 3 7.3
Media 5 12.2
Marketing and sales 5 12.2
Turnover (MAD)
3-10 3 7.3
10-50 5 12.2
50-100 14 34.1
100-175 19 46.3
Number of employees
<50 employees 3 7.3
51-100 employees 15 36.6
101-150 employees 14 34.1
> 150 employees 9 22.0
Age of the firm
< 5 years 4 9.8 Table I.
6-10 years 16 39.0 Sample
> 10 years 21 51.2 characteristics

5.3.1.2 Discriminate validity. The discriminant validity assessment has the goal to ensure
that a reflective construct has the strongest relationships with its own indicators (Garson,
2016). Two indicators were analyzed as recommended by Hair et al. (2013):
(1) Cross loading that shows how each measurement item correlates weakly with all
other constructs except for the one to which it is theoretically associated (Henseler
IJIS Construct Item Source
12,1
Customers Cust1: Customers are becoming a dynamic network and have viral Rogers (2012)
impact on the brand image
Cust2: Customer are more sensitive to social and environment Nielsen (2015)
impacts in the digital Era
Cust3: Customers could contribute to the creation of the content Afonso et al. (2017)
66 and the funding
Cust4: Customers prefer platform business models to stream a profit Andreassen et al.
(2018)
Competition Comp1: Digital transformation is the opportunity to go beyond Mauborgne and Kim
competitive advantage to increase profit, it is also an opportunity (2017)
to craft blue ocean strategies
Comp2: Digital transformation is the opportunity for a Rogers (2016)
collaboration between competitors to increase profit and their
positive impacts on society
Comp3: Digital transformation increased the competition to shine Moodie (2016)
the brand image
Data Data1: Big data is seen as a strategic asset to increase profit in the Rogers (2016)
digital era
Data2: Big data is used to understand and measure the impacts on Glenn (2007),
environment Salvatore and
Carmine (2014)
Data3: Big data is used to assess ecological risks and optimize the Magdziarz et al.
resources usage (2017), YIFAT (2017)
Data4: Big data is used to enhance customer relationship, to
identify social needs and for social innovation
Innovation Innov1: Innovation in the digital era concerns more the business Zott and Amit (2017)
models to increase profit
Innov2: Testing ideas has become cheap, fast and easy inside Rogers (2016)
digital companies
Innov3: Customers are waiting from companies to innovate to Andrea (2017)
solve their social and environmental issues
Innov4: IoT and sensors are used to deliver data from the field Lambert (2017)
Sustainability Sust1: Digital transformation has increased market share of
companies
Sust2: Digital transformation has increased the economic benefits
of companies
Sust3: Digital transformation has increased the social footprint of
companies
Sust4: Digital transformation has shined more the brand image of
companies
Sust5: Digital transformation has decreased the carbon footprint of
companies
Sust6: Companies are becoming more aware of their negative
externalities after conducting a digital transformation
Table II. Sust7: Companies find more a balance between the three
Constructs and items dimensions of sustainability thanks to digital transformation

et al., 2015). An indicator’s outer loading on a construct should be higher than all
its cross loadings with other constructs.
(2) Fornell–Larcker criterion which detects specific constructs that show more
correlation with another construct than with their own measures. For each
construct, this indicator should be higher than its highest correlation with any
other construct (Fornell and Larcker, 1981).
 Reaching
SMART PLS
sustainability

Assessment of Measurements Model Assessment of Structural Model

(Outer model) (Inner model)
67

Convergent validity 1- Coefficient of determination - R2

1- Individual item reliability 2- Effect size - f2
2- Composite reliability 3- Predictive relevance Q2
3- Average Variance Extracted 4- Goodness of Fit of the Model - GoF
5- Hypotheses Testing (Path Coefficient) Figure 2.
Steps to process a
PLS-SEM analysis
Discriminate validity through SMART PLS
1- Cross loading
according to Garson
2- Variable correlation (Root square of AVE)
(2016)

5.3.2 Assessment of the structural model

5.3.2.1 Coefficient of determination R2. This coefficient is a measure of the model’s predictive
power, and it is calculated as the squared correlation between a specific endogenous construct’s
actual and predicted values (F. Hair et al., 2014). Another way to see R2 is that it represents the
exogenous latent variables’ combined effects on the endogenous latent variable.
Even though the acceptance rate of R2 depends on the research context (F. Hair et al., 2014),
the threshold of 0.10 as a minimum acceptable level was proposed by Falk and Miller (1992).
5.3.2.2 Effect size f2. The effect size f2 shows the change in the R2 value when a specified
exogenous construct is omitted from the model (F. Hair et al., 2014). This indicator helps to
evaluate whether the omitted construct has a significant impact on the endogenous constructs.
The interpretation of the effect size (f2) was detailed by Cohen (1988): values of f2 above
0.35 are considered large effect size. Values of f2 ranging from 0.15 to 0.35 are medium effect
size. Values of f2 between 0.02 and 0.15 are small effect size whereas f2 values less than 0.02
are considered with no effect size.
5.3.2.3 Predictive relevance Q2. The predictive relevance Q2 will measure the predictive
capability of our model. Q2 greater than 0 means that “the PLS-SEM model is predictive of
the given endogenous variable under scrutiny” (Garson, 2016).
5.3.2.4 Goodness of fit of the model. The purpose of goodness-of -fit (GoF) is to highlight
how much we can account on the studied model at both levels, which are the measurement
and structural models with a focus on the overall performance of the model (Henseler and
Sarstedt, 2013). GoF is computed as follows:
pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
GoF ¼ R2  AVE

The GoF values lie between 0 and 1. The interpretation of GoF was detailed by Wetzels et al.
(2009): 0.10 (small), 0.25 (medium) and 0.36 (large) indicate the global validation of the path
model.
IJIS 5.3.2.5 Hypothesis testing (path coefficient). This coefficient assesses the validity of the
12,1 hypotheses through the estimation of paths between our independent constructs
(competition, customers, data and invention) and the purpose (sustainability).

6. Results
6.1 Assessment of the measurement model
68 6.1.1 Convergent validity. Table III illustrates the findings regarding the convergent validity
assessment.
6.1.2 Discriminate validity. Tables IV and V exhibit the obtained values.

6.2 Assessment of the structural model

6.2.1 Hypothesis testing (path coefficient). To assess the validity of our hypotheses, the
bootstrapping method, using SMART-PLS, was used with 5,000 resamples. The results are shown
in Table VI.
6.2.2 Coefficient of determination R2. For our model, and using SMART-PLS tool, the
results are presented in Table VII.
6.2.3 Effect size f2. As explained before, this indicator helps to evaluate whether the
omitted construct has a significant impact on the endogenous constructs. Results are
presented in Table VIII.
6.2.4 Predictive relevance Q2. In our case, calculations done by SMART-PLS (Table IX)
show that the predictive relevance Q2 is greater than 0 for both the two endogenous variables.
6.2.5 Goodness of fit of the model. Wetzels et al. (2009) published baseline values to
consider for explaining GoF of a given model. In our case, we obtained a GoF value of 0.517,
which exceeds the cut-off value of 0.36 declared by Wetzels et al. (2009) for large effect sizes
of R2.
Figure 3 shows the PLS test of the proposed structural model:

Constructs Items Factor loading Composite reliability AVE

Competition Comp1 0.869 0.783 0.555

Comp2 0.79
Comp3 0.537
Customers Cust1 0.897 0.912 0.723
Cust2 0.895
Cust3 0.748
Cust4 0.852
Data Data1 0.889 0.88 0.649
Data2 0.853
Data3 0.734
Data4 0.734
Innovation Innov1 0.811 0.903 0.7
Innov2 0.874
Innov3 0.884
Innov4 0.772
Sustainability Sust1 0.73 0.92 0.624
Sust2 0.698
Sust3 0.827
Table III. Sust4 0.731
The convergent Sust5 0.848
validity assessment Sust6 0.874
of the model Sust7 0.805
Items Competition Customers Data Innovation Sustainability
Reaching
sustainability
Comp1 0.869 0.058 0.168 0.221 0.158
Comp2 0.79 0.036 0.292 0.229 0.137
Comp3 0.537 0.125 0.069 0.103 0.018
Cust1 0.072 0.897 0.503 0.416 0.597
Cust2 0.055 0.895 0.359 0.435 0.476
Cust3 0.217 0.748 0.052 0.248 0.284 69
Cust4 0.038 0.852 0.266 0.294 0.359
Data1 0.224 0.348 0.889 0.423 0.737
Data2 0.192 0.399 0.853 0.455 0.575
Data3 0.298 0.111 0.734 0.341 0.267
Data4 0.236 0.346 0.734 0.477 0.583
Innov1 0.329 0.255 0.395 0.811 0.5
Innov2 0.195 0.621 0.462 0.874 0.637
Innov3 0.068 0.325 0.499 0.884 0.563
Innov4 0.395 0.137 0.432 0.772 0.391
Sust1 0.022 0.354 0.467 0.36 0.73
Sust2 0.037 0.348 0.391 0.473 0.698
Table IV.
Sust3 0.332 0.332 0.628 0.473 0.827
Sust4 0.194 0.395 0.566 0.501 0.731 Discriminant validity
Sust5 0.162 0.449 0.667 0.603 0.848 assessment using
Sust6 0.274 0.572 0.676 0.67 0.874 cross-loading
Sust7 0.034 0.511 0.554 0.381 0.805 approach

Constructs Competition Customers Data Innovation Sustainability

Table V.
Competition 0.745
Customers 0.027 0.85 Discriminant validity
Data 0.277 0.409 0.805 assessment using
Innovation 0.273 0.431 0.534 0.837 Fornell–Larcker
Sustainability 0.186 0.544 0.727 0.639 0.79 criterion

Hypothesis Relationship Std.Beta Std. Error t- value p- value Decision

H1 Customers ! Sustainability 0.219 0.239 2.123 0.034 Supported

H2 Competition! Sustainability 0.022 0.059 0.143 0.886 Not supported
H3 Data ! Customers 0.409 0.454 3.661 0 Supported
H4 Data –> Sustainability 0.489 0.458 3.339 0.001 Supported
H5 Innovation ! Sustainability 0.289 0.147 1.971 0.049 Supported Table VI.
Path coefficient of the
Note: Only hypothesis with a p-value <= 0.05 are accepted research hypotheses

7. Discussion
The present paper aimed at developing a research model that explains the key drivers to
reach sustainability during a digital transformation inside a given business.
The assessment of both the convergent and the discriminant validity of the constructs
were conclusive. The individual reliability of the items, the composite validity and the
IJIS average variance extracted were above their satisfactory thresholds. The results of the cross
12,1 loading and the Fornell–Larcker criterion were also satisfactory. These results confirm that
our measurement model is both reliable and valid and could be used to assess our structural
model.
Furthermore, the assessment of the structural model coefficients was also in favor of our
model. The coefficient of determination R2 was superior than the threshold value of 0.10 for
70 our endogenous latent variables, which showed that the model is predictive. The effect size
f2 affirmed that data, customers and innovation had effects on sustainability, unlike
competition which had no effect. Q2 and GoF coefficients confirmed that our model performs
well compared to the baseline values detailed in the methodology and results sections
(Sections 4.3.2 and 5.2).
Four of the five hypotheses formulated were supported in the context of the investigated
companies. In support of H1, our model has brought evidence that customers can positively
influence the quest of companies to reach sustainability. As the empirical study indicated,
the dynamics that the digital era brought inside customers, the increase of customers’
sensitivity towards sustainability issues, the changes in their traditional roles and their
willing to stream profits from the offered services are what leverage customers’ impacts on
financial benefits, on the increase of social footprints and on the decrease of environmental
negative externalities. Although the digital transformation journey will vary based on the
firm’s specific challenges and demands, rediscovering the customer experience is a common
theme among existing case studies and published frameworks about this concept.

Constructs relation R2 Results

Table VII. Customers 0.167 Weak
R-square of the Sustainability 0.655 Strong
endogenous latent
variables Note: The R2 value of the overall model is 0.655, suggesting a good model

Constructs Competition Customers Data Innovation Sustainability Results

Competition 0.001 No effect

Customers 0.102 Small to medium
Data 0.2 0.447 Large
Table VIII. Innovation 0.153 Medium
Effect size f2 Sustainability

Constructs Q2

Competition
Customers 0.077
Table IX. Data
Predictive relevance Innovation
Q2 Sustainability 0.358
 Reaching
sustainability

71

Figure 3.
PLS test of the
proposed structural
mode

Thus, companies should start building a customer-centric culture. Being a customer-

centric company means more than just offering good customer services. It is about
creating products and services to address customers’ needs and offering seamless
experiences across the board. Being customer centric is not reserved only for large
companies. SMEs could also put customers at the heart of the business, as they are able to
develop deeper and more intimate relationship with their customers (Parniangtong,
2017). Customer centricity offers opportunities for growth for SMEs because such an
approach is focused on detecting the unfulfilled needs. These companies are in better
position as they are more agile and have more ability to pivot to go after new
opportunities (Brierley, 2019).
As regards to H3 that deals with impacts of data on customers, our model confirmed that
the enormous quantity of data collected from different sources helps companies to better
understand customers and discover their needs. In fact, data should be leveraged to boost
satisfaction and loyalty of customers. As Marr (2017) stated, “the most successful company
is likely to be the one that best uses data to improve the service it provides to customers.”
There is no doubt that the strategic importance of customer data has increased in the
digital age. Companies should gather it, turn it into insights and make decisions and
changes in faster and faster feedback cycles. That is to say, companies have to find out what
is working and what is not and adjust appropriately at lightning speed.
IJIS Our model also validated H4. It is evident that data is the key driver in the digital era. It
12,1 is becoming the most valuable asset a company could possess and monetize (Marr, 2017). A
new discipline called “Infonomics” emerged as the theory and the study of the valuation,
handling and deployment of information assets nowadays, which shows how important
data is becoming (Laney, 2017).
Even in an emerging economy like Morocco, our empirical study showed that companies
72 are aware that data is a strategic asset to increase profit and growth. The collected data is
also used to understand and measure the impacts on environment, to assess ecological risks
and to optimize the resources usage. Furthermore, the abundance of data is transforming
companies’ care to social issues. Customers’ social needs and expectations are now easier to
identify thanks to social media.
In this data-driven world, accessing and acquiring data is no longer a problem. The
challenge is how to profit from a world of big data, analytics and the Internet of things. As
Marr (2017) explained, companies should exploit the collected data to avoid possessing a
huge, expansive but useless big “white elephant.”
To build data capabilities, companies could either work on their own solutions or
outsource data processing services. As an in-house solution requires time, money, skills and
a strong vision to excite and motivate researchers, some non-tech SMEs cannot afford
investing in such solutions. Thus, these companies should look for pay-as-you-go basis
platforms to answer their own needs regarding data.
Exploiting sensitive and personal data raises questions about ethics and security.
Companies should build a strong and successful data governance strategy to protect
themselves from any liabilities (Marr, 2017).
H5 was approved by our model. Innovation could be a key driver to reach sustainability,
which has been already highlighted by several studies (Nidumolu et al., 2009; Hansen and
Große-Dunker, 2013).
One of the most promising areas that sustainability practitioners and business leaders are
focusing on regarding innovation is the field of business models (Schaltegger et al., 2012). For
Clinton and Whisnant (2019), moving beyond product and process modifications to business
model innovation is vital to generate both sustainability and financial performance. Recent
technological advances in the digital era have enabled the emergence of novel business
models, such as platform business models (Täuscher and Laudien, 2018). Thinking platform
and creating digital marketplaces helped companies to reduce their negative externalities and
strengthen the companies’ efforts regarding sustainability (Piscicelli et al., 2018).
Open innovation could also help companies in their quest to reach sustainability. By
involving customers, SMEs could overcome the handicaps which small size can bring (such
as lack of financial resources and technical capabilities). Many studies were published in the
literature regarding models to guide SMEs in the open innovation implementation
(Pellegrino, 2017; Santoro et al., 2018).
Nevertheless, and in contrast to the existing literature, we did not succeed in validating
the second hypothesis with our model. Competition, in the Moroccan SMEs context, is not a
driver to reach sustainability during a digital transformation. Strengthening the
competitiveness of Moroccan SMEs is one of the pillars of the national strategy “Maroc
digital 2020.” Difficulties encountered by SMEs in gaining access to funding may impede
any try to look beyond the traditional way competition is conceived by these firms and start
considering it as a catalyst for sustainable development.
Our findings are in line with the results of a theoretical research (El Hilali and El
Manouar, 2019) that tried to explore the relationship between digital transformation and
sustainability. The study proposed recommendations to enhance a firm’s sustainability
commitment, grouped in three categories: customer experience, operational processes and Reaching
business model. The authors invoked redefining the customer relationship, incorporating sustainability
digital technologies in processes, and creating new cost-value frontiers through adapted
business models to balance the three pillars of sustainability paradigm.

8. Limitations and future research directions

The study conducted here has some limitations. First of all, all the companies questioned are 73
located in Morocco, things that could influence any try to generalize our results. Future
researchers may consider broadening the scope of this study by extending the target
research areas to cover more regions such as European and American countries to compare
findings in emerging and developed economies and to increase generalizability.
Secondly, the number of companies questioned in the survey remains relatively small
and could be widen more. Hence, the findings cannot be generalized to all Moroccan SMEs.
Thirdly, the sampling technique used, which is convenience sampling, is highly vulnerable
to selection bias. Finally, the present paper uses a pure quantitative research method (100
per cent self-administered survey) where more deep responses as well as non-verbal
communication data could be captured through qualitative or mixed research methods.
Future researchers may consider also to analyses the relationship between sustainability
and digital transformation in case of large companies. It will be interesting to investigate
whether customers, data and innovation will also drive these companies in their quest for
sustainability during their digital transformation journeys. Broadening the study to
consider large firms may also change the obtained results regarding competition.

9. Conclusions
Every business requires, at a strategic inflection point, a total re-anchor of how value is
created and captured. Digital transformation comes nowadays as a saver from the
predictability of red ocean business strategies and an immune system from the disruption
risks of cutting-edge technologies. It is a way to perfect the customer experience, redefine
competition, exploit the huge potential of big data, embrace innovation and redefine the
value proposition. This paper tries to discuss how to exploit the potential of digital
transformation to find the requested equilibrium between economy, society and
environment. Out of different Moroccan industries 41 SMEs were object of a survey. The
gathered data was analyzed and exploited to validate a research model using a PLS-SEM
approach. The results affirmed a positive influence of customers, data and innovation on
companies’ quest to reach sustainability. Nevertheless, we did not succeed in proving any
positive impact of competition on sustainability in the digital era.
The findings generated from this study have important implications for researchers and
practitioners. First, digital transformation is an opportunity to reconcile business, social and
environmental interests. By adopting customer-centric approach and building a culture that
embrace data, decision-makers could safeguard the firm’s financial value while, at the same
time, operate ethically in ways that guarantee the well-being of all the stakeholders. Second,
digital transformation is not exclusive to large companies. SMEs could also adapt their
business models to the times we live in. Changing the way customers are perceived,
exploiting data and rediscovering innovation not only are axes that guide SMEs in their
digital transformation adventure but also have positive impacts on these companies’ quest
of sustainability.
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Corresponding author
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Wail El hilali can be contacted at: wailelhilali@gmail.com

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