IMPLICATIONS OF DIGITAL TRANSFORMATION

ON ENTREPRENEURS

Project Report- Mid-Term

Submitted by

ANOUSKA GHOSH ADITI SAXENA

170906424 170906192

Under the guidance of

DR. SUMUKH S. HUNGUND

Assistant Professor- Selection Grade
Department of Humanities and Management, MIT
MAHE, Manipal

in partial fulfilment of the requirements for the award of the degree of

BACHELOR OF TECHNOLOGY
IN
ELECTRICAL AND ELECTRONICS ENGINEERING
DEPARTMENT OF ELECTRICAL AND ELECTRONICS ENGINEERING
MANIPAL INSTITUTE OF TECHNOLOGY
(A Constituent Unit of Manipal Academy of Higher Education)
MANIPAL-576104, KARNATAKA, INDIA
March/April 2021
Project Letter
 TABLE OF CONTENTS
Page No
ABSTRACT
1 INTRODUCTION 1
2 LITERATURE REVIEW 3
3 OBJECTIVES 5
4 METHODOLOGY 6
5 RESULTS & ANALYSIS 11
6 CONCLUSION 12
REFERENCES 13
PLAGIARISM REPORT 14
PROJECT DETAILS 15

ABSTRACT
Digital transformation is metamorphosing the traditional entrepreneurship models. It brings
society new challenges related to reducing production and management costs using digital
economy platforms, with a radical increase in the efficiency of companies, industries, and
educational institutions to withstand global technological, economic, and social challenges.
Digital transformation has become of paramount importance to all businesses, from small to
enormous ones. This message is evident from every article or study related to how companies
can remain competitive, offer digital platforms that understand their employees' needs, and
stay relevant as the world becomes increasingly digital. Few entrepreneurial ventures, oddly
enough, still experience issues accepting that the business commandments behind the
evolution deadlines, the performance of the new operating models, and their capacity to
acknowledge customers and competition are not going anywhere without the cultural
implantation of digital transformation.

Purpose: The objective of this paper is to understand the implications of digital

transformation on entrepreneurship. We aim to interview entrepreneurs and garner
information from the experience that they have had with digitization of their businesses and
the effects the transformation had on their denominators of success.

Design/Methodology/Approach: A structural equation modelling is used to analyse the

conceptual framework developed. The framework is formed based on previously available
literature and a questionnaire is made. This survey questionnaire is answered by Indian
entrepreneurs and other major contributors to start-ups.

Originality/Value: This project work aims at formatting a proper data deluge associated
paper, detailing and forecasting of historic data to develop unit responses and decision
making, understanding the problems with descriptive and prescriptive analysis and providing
structured answers and solutions to the data supported with not only perspectives but also
sequential correlated predictable insights.

Keywords: Digital tools, entrepreneurship, digital transformation, digitization, digitalization,

digital disruption, digital innovation.

Paper Type: Quantitative, causal research

 1. INTRODUCTION

The future of businesses is going to be weird. One of the questions all entrepreneurs need to
be asking themselves is, how confident they are that their organization is using the right
technology for the future, technology that will stay relevant in the future. We don’t even
know what 85% of the jobs in 2030 will look like. The job landscape will have undergone a
monumental shift because of technological disruption. Among all the dystopia that surrounds
us, entrepreneurs are the ones that chase these challenges, imagine a world where these
problems have been overcome and pursue the solutions relentlessly.

In the past 150 years, the global economy underwent many major transformations: structural
changes, the way markets form, the ways in which money moves around the world etc. The
one that stands out the most is perhaps the Industrial revolution where we mechanized the
power of steam to build assembly lines, ships and locomotives and the fore bearers of nearly
everything that makes our modern lives possible. The next revolution was in computation and
augmentation. The PC revolution put massive computational power in the pockets of the
everyday man. We are now about to enter the fourth revolution. A revolution that has
constantly been building upon its preceding revolutions. This fourth revolution will combine
data and informatics, bring all of the world’s crucial information and unimaginable
computing power together and hence, result in consequences beyond what we can ever
fathom presently.

The biggest cause of concern is the rate at which these revolutions have caused the shifts. In a
mere 60 years, we have gone from a few gasoline cars confined to only the rich and elite to
driverless, solar powered and an uncountable number of cars. From people saving for years to
buy a CRT television with two channels in it to single platforms that don’t even have a
physical existence, where we can consume nearly the entire world’s media from. From
people queueing up in droves in front of vinyl record stores after every release to buy a single
track’s record to having access to all the world’s music ever created by man through the
touch of a screen and a countless other mind-boggling transitions. If these changes seem wild,
what lies in wait in the future is even more so. If anything, this rate of change is only going to
go through the roof, exponentially. What took 60 years to happen then, is going to take, may
be a decade now. Nobody knows what the future of mankind is going to be like even in the
next ten years because of the unprecedented rate of change.

Of course, any innovation system eventually will become the victim of its own success. As
the sandbox expands and the company’s revenue grows as a result of the sandbox’s
innovations, the cycle will have to begin again. The former innovators will become guardians
of the status quo. When the product makes up the whole sandbox, it inevitably will become
encumbered with the additional rules and controls needed for mission-critical operation. New
innovation teams will need a new sandbox within which to play. [1]

The digital transformation will have a profound impact on the way firms enter and compete
in the market, particularly as processes become replicable at near zero cost margin.
Competition will be vital in driving innovation, and the policies set out by policy makers
should reflect this. (OECD, 2018)
So, the way entrepreneurs prepare for the world that’s facing them is by asking themselves
questions like, “Are we using technology to improve our use of time?”, “How are we
implementing digital tools and practices to reduce friction and inefficiencies in our

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organisation?”, “Is our organization future-proof?”. Innovation needs to be at the core of
everything an entrepreneur is pursuing. We are entering a world that was not really structured
for us to navigate easily. It’s up to entrepreneurs to spearhead the way that leads the world to
a better and more equal place to live in. It’s not that we need to be afraid of these seemingly
unsurpassable roadblocks; the opportunities are bigger than ever and we now have tools that
allow us to impact the world on a humongous scale.
Although digitalization concerns all spheres of social life, it primarily determines the
transformation of entrepreneurial and business models in different industries. The main
reason for this is the changing needs of society (either caused by new demands or pushed by
industry) regarding products and services (e.g., enhanced connectivity and individualization)
that determine adaptations in the value-creation process as well as communication and
cooperation patterns; this process, in turn, fosters innovative transformations of business
models (Sustainability 2020, 12, 2764). For an established entrepreneur and a budding one
alike, the digital era has arrived and there is no denying it and as entrepreneurs aim to step
into power and control of changing the organisation's mission and vision, so as to be ahead
with respect to the pace at which a society evolves and people's routine change; digitalisation
is a very emerging powerful tool to understand the dynamics of the business world.
The message needs to be communicated clearly that innovation and entrepreneurship can
occur without threatening the core product or service base. This is particularly salutary if we
accept that an unknown business may be seeking to steal your market in the very near future.
(Johnson & Johnson, 2003)

There are many advantages to digitalisation but solution to a problem comes with challenges
too. The area of social engineering, privacy concerns, digital media manipulation, work and
skill overload, data security, crime & terrorism are some of the challenges digitalisation
brings to the table irrespective of revenue scale, profit margins, operation costs and the
integrity of a company betting in the digital world.

Taking all the problems into consideration, this project work aims at
1. reviewing, interviewing, and researching journals and papers
2. studying historic data and generating fresh useful insight
3. formatting a proper data deluge associated paper
4. detailed forecasting of historic data to develop unit responses and decision making
5. understanding the problems with descriptive and prescriptive analysis
6. providing structured answers and solutions to the data supported with not only perspectives
but also sequential correlated predictable insights

The project work proposes a detailed review on the "Implications of Digital Transformation
on Entrepreneurs". The significance of our project is that this project is meant to guide us
through the innumerable implications that affect entrepreneurs that are working in the digital
space, or are transitioning into it. We get a peek into how they feel about this through our
thoroughly and extensively designed questionnaire. We make use of their hard earned
experience in the field to learn about various possible roadblocks that should be anticipated
by any aspiring digital entrepreneur so as to make his/her journey a smoother one.

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 2. LITERATURE REVIEW

According to The Enterprisers Project, "Digital transformation is the integration of digital

technology into all areas of a business, fundamentally changing how you operate and deliver
value to customers. It's also a cultural change that requires organizations to continually
challenge the status quo, experiment, and get comfortable with failure." (Rudder, 2019)
Our reliance on digital technologies is growing by the day. To ensure that the company does
not fall behind, one must understand what it means to be a digitally progressive company. A
business's digital transformation is a dynamic evolution of its organizational processes,
strategies, product growth, and models. (Drake, 2019) This transformation enables a
company to fully utilize the numerous digital technologies that enhance existing organization
systems and prepare for future shifts to reap long-term profitability. Regardless of the size of
your company, change is inevitable. We must consider the digitally transformative tools and
processes that can bring about the necessary change for increased efficiency, reduced
resource spending, and competitive advantage to meet the growing and changing customer
requirements. (Gunasilan, 2019)
Digital transformation extends to all types of enterprises, whether you are a company or an
enterprise, an online store, a start-up or a brick-and-mortar warehouse. This transformation is
a cultural shift within an organization that necessitates constant rethinking and exploration in
all business areas to find unique ways to deliver value to customers. Digital transformation is
currently not adequately understood, and several myths obscure the path to realizing its
value-creation potential. The initiative debunks some of the most prevalent digital myths,
such as the true extent of disruption caused by digital start-ups and how the effect of
automation on jobs is likely to be very different from what we currently know. [2]
To reap the benefits of digitalization for society and industry, action will be required. Given
digitalization's central role in addressing many of today's problems, the importance of
realizing the combined value of digital transformation cannot be overstated. The world's use
of energy and natural resources, for example, is unsustainable. Furthermore, further increases
in life expectancy are jeopardized unless the rising cost structures of overburdened health
systems are addressed. (OECD, 2018) However, digitalization benefits will not be realized
immediately by industry or society, and there is a possibility that the promise of digital
transformation will not be realized. Furthermore, companies do not always realize the effect
of their digital initiatives on various facets of society–from jobs to the environment and
beyond–or what responsibility they should bear for dealing with any unintended
consequences of digitalization.
Organizations that excel in achieving real change with emerging technology appear to be
outward-thinking, both in terms of looking at what their consumers and markets want and
looking beyond their immediate space to see how other companies respond to new
technologies. Often, organizations make a concerted effort to collect suggestions for

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creativity and change from staff, consumers, and other stakeholders and then put processes in
place to take meaningful action on those ideas. So, in a nutshell, it's about being open to new
ideas – no matter where they come from.
The most significant impediment to success is a lack of coordinated thought. It's not so much
a "people problem" or a "process problem" as it lacks an up-to-date strategic vision of how
technology can bring value to the company and who will be responsible for making progress
toward that aim. Digital will help the company become more agile. Since existing banking
infrastructures did not allow it, many banks established a FinTech arm to retain their
competitive advantage and fend off new competition.
Most companies have a talent gap between the IT department, which has pockets of deep
understanding of how to use big data, Internet of Things, machine learning, predictive
analytics to drive innovation and the talent required to carry out these functions. There is
often a lack of understanding and fear of these types of technologies, especially among those
in management or executive roles, and an inability to understand how they can be
operationalized to drive business innovation. However, since management controls the purse
strings, it is in the best interest to educate leadership on these technological opportunities to
be familiar with and understand how technology can help them achieve their goals.
The failure to articulate a consistent vision across the enterprise and resistance to embracing a
new culture are the two key reasons why digital transitions stall or fail. When leaders
consider digital shifts, they mainly concentrate on the technical aspects of the transition, such
as software upgrades and the implementation of new technologies. An effective transition,
however, requires more than that. Digital transformation ushers in a paradigm change in how
workers function and how a company provides value. It is the technological challenges that
are easier to fix, and it is the organizational defects that become impediments to progress.
Even organizations that are doing well implementing their Digital Transformation, face
difficult obstacles such as budget restraints, lack of understanding from the directors and
board members, teams that are resistant to change and, crucially, the impacts on cultural
changes that are generated. Organizations that are delaying the implementation of a true
Digital Transformation will struggle to survive. This is especially true as we are already
evolving into the era of Post-Digital Transformation, and your company cannot afford to
stagnate behind the others. [3]

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 3. OBJECTIVES

The objectives of Anouska are as follows:

• Prepare the abstract.
• Write the introduction citing papers.
• Frame the methodology with all the sampling techniques.
• Design the conceptual framework.
• Read research papers.
• Prepare half of the questions of the questionnaire.

The objectives of Aditi are as follows:

• Prepare the Literature review.
• Write the expected outcome.
• Mention references.
• Work on citations.
• Read research papers.
• Prepare the other half of the questionnaire.
• Do the formatting of the final documents.

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 4. METHODOLOGY

DIGITAL
INTENTION

DIGITAL
READINESS

DIGITAL
BUSINESS
MODEL

DIGITAL
TECHNOLOGY

INNOVATION

DIGITAL
TRANSFORMATION

ENHANCED
PERFORMANCE

Transforming digitally for a business needs a whole lot of factors to work in tandem with
each other. The impact of digital transformation on a business varies with multiple factors
like increased revenue, decreased operating costs, improved customer satisfaction, lowered
fragmentation, optimized operations and more. Here, we consider them to form the
conceptual framework of this study. The framework used here has been built keeping the
model provided by the article Sustainability, by Bican and Brem (2020) in mind.

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Construct Definition Source

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Business model The all-encompassing term Sustainability 2020, 12, 5239
that incorporates the Conference summary, London, United Kingdom 1
organization’s value 8-9 November 2018.
propositions and the various
stages that lead to digital
transformation.

Digital intention The conscious partaking of a 1.David Johnson, (2001) "What is innovation and
firm’s members in reaching a entrepreneurship? Lessons for larger
consensus of bringing about organisations".
digital transformation in its
activities.
Digital readiness The willingness of the Sustainability 2020, 12, 5239
organization’s members to 2. Sustainability 2020, 12, 2764
embrace digitization and
sustain it.
Innovation An innovation system may be 1. Sustainability 2020, 12, 2764
understood as an interactive
learning system with a focus
on the enhanced learning
capability of individuals,
organizations, and regions as
part of capacity building in
order to meet new challenges
and to enable an innovation-
based economic performance.

Digital The combined system of 1.David Johnson, (2001) "What is innovation and
technology highly interconnected and entrepreneurship? Lessons for larger
highly intricate tools that organisations".
allow storage, generation and 2. Sustainability 2020, 12, 5239
processing of data, enabling
transformative change.
Digital Business The model that shows the 1. International Review of Management and
Model process of generation of value Marketing, 2019, 9(5), 23-29
for customers through the use 2. Sustainability 2020, 12, 5239
of digital tools. The value
proposition stated for the use
of a digital means of
conducting business.
Digital The entire process of 1. David Johnson, (2001) "What is innovation and
Transformation digitalization across multiple entrepreneurship? Lessons for larger
parts or the whole organisations".
organization and its 2. Sustainability 2020, 12, 5239
consequences.
Enhanced The resulting changes in the 1. International Review of Management and
performance key performance indicators of Marketing, 2019, 9(5), 23-29

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 a business, mostly positives.

As stated in the journal Sustainability 2020, 12, 5239, Digital Transformation is influenced
by various factors like customer focus, customer proximity, margin pressure, speed of change
within respective business activities, or—as put by their focus group—by Digital Readiness
and external collaboration. (Bican, 2020) As per the Conference summary, London, United
Kingdom, 2018, Debora Revoltella, Director of the Economic Department, European
Investment Bank conducted a survey after which she concluded that there are three key
barriers to firms not readily making a shift towards digitization, including firm-size
distribution, market fragmentation in services, and a financial system that is skewed towards
debt finance. Lack of staff with the right skills is considered a key barrier to digital adoption
by organizations. (Johnson & Johnson, 2003)

The same journal also includes the work of Hugh Milward, Director, Corporate External and
Legal Affairs at Microsoft, who mentioned that firms that do not adopt AI technologies report
extensive costs, skills deficits and culture issues. He noted that firms that do adopt AI report
productivity gains of up to 7%, while also mentioning the anxiety of firms about the
sustainability of their business model in the digital age.
According to the journal Sustainability 2020, 12, 2764, given the conception that the
organizational management process is determined by the internal and external environments,
we may suggest that the intensity and success of business digitalization depend on the
interconnections between internal and external factors. External factors are strongly affected
by spatial, spill over, and temporal effects on entrepreneurial activity. Internal factors are
strongly connected to individual characteristics of entrepreneurs (managers and founders), the
mission and objectives of a company, and the operational process within a business model
(including value creation, revenue policies, customer relations, etc.).

In order to answer the problem statement, we conducted a bibliometric research to perform a

meta-analysis of the available literature. A conceptual framework was formed based on the
available literature, and hypothesis statements were constructed. The type of research chosen
is causal as we want to obtain definite relationships among the variables under study. The aim
is to achieve fairly conclusive confirmatory results and can define the course of action for the
present day entrepreneur to bring about digitization in the whole of his enterprise.

Our research instrument is a well-structured questionnaire. This questionnaire will have

multiple choices based on the 5 point Likert scale, ranging from “strongly agree” to “strongly
disagree” on general outlook of the entrepreneur toward the digital transformation of his/her
business. Since, the entrepreneurs are questioned directly, the sources used are primary. This
is also done because data hasn’t been collected previously that will completely fit our
research needs.

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The need to attain a clear conclusive answer to the research questions, led us to conclude that
surveys are the best way to go about our problem statement. Surveys are efficient,
inexpensive and relatively accurate ways to garner data. Thus, the reasons for choosing a
survey questionnaire for this study is based on the fact that the objective of this paper is to
study entrepreneurs for their future preparedness which can be best done when they are
directly questioned on their choices.
For this research, the sampling design is as follows:

Population: As the goal of this study is to analyse the implications of digital transformation
on businesses, the population considered for the study is an entrepreneurial one.

Sampling frame: The sampling frame used here would be the typical digital entrepreneur, a
techie may be, or it can even be a previously conventional entrepreneur who has made the
shift to the digital territory and who will be better able to give us insights and comparisons,
pros and cons of the two worlds.

Sampling procedure: Due to gigantic size of the sampling frame, which is about 11% of the
adult population in India, we use convenience sampling. That is, we try to obtain information
from easily available respondents. This may lead to a skewed representation; therefore, we
use snowballing technique to achieve a more accurate representation. In snowballing, the
original respondents are used to get additional respondents.

Sample size: The goal is to get a sample that is unbiasedly represents the sampling frame
closely. Therefore, we try to get as many respondents as possible to make sure that the
responses are unbiased and error-free.

Sample unit: The basic unit of this sample would be an entrepreneur that has had experience
going digital or having started out digitally.

The research tools used will most likely be SPSS and/or smart PLS/ AMOS. This software
helps in statistical analysis of models. We will try and analyse the conceptual framework and
obtain definite relationships based on mathematical measures like covariance and regression
models.
First, the constructs and variables undergo descriptive analysis to understand their conceptual
definition and define their operational definitions as to be used in the study. This is done
based on the content analysis of previously available literature. The conceptual framework is
constructed and the constructs are analysed to form the survey questionnaire. Then the
conceptual framework undergoes path analysis, structured equation modelling and constructs
undergo confirmatory factor analysis. This is done using the various research tools mentioned

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before. We carry out a causal research according to the results of the analysis and finally
reach a conclusion on the relationship of the various constructs.

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 5. RESULTS & ANALYSIS

The pilot survey for this project hasn’t been conducted yet. There is a survey of entrepreneurs
through a questionnaire that needs to be conducted. The questionnaire needs its scrutinising
done by our guide after it is prepared. We will present the analysed outcome of the survey
along with the responses, questions and the operational framework in the final report.

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 6. CONCLUSION

Digital transformation is a continuous process. Furthermore, companies often feel compelled

to incorporate the most recent changes to stay competitive. In the business world, examples
of technological innovation include computerization and mechanization of necessary systems
and processes. Digitally transforming a company's operations would result in a better end-
user experience, which will lead to increased business success and brand loyalty. Digital
transformation is a subset of digital entrepreneurship that aims to take a transformative
approach to existing business models by incorporating cutting-edge digital technologies.
(Nambisan et al., 2019) Digitalization in its entirety, automation, and widespread adoption of
digital technologies are all-natural processes. As a result, a comprehensive picture of
entrepreneurship's "digital" future has yet to emerge. As a result, the outcome of the
upcoming changes cannot be predicted. Only that the information revolution and its offshoot,
the digital economy, are fundamentally altering the nature of economic relations is evident. If
adequately implemented, digital transformation can improve operational efficiency, enhance
product quality, improve team coordination, increase customer retention, and ensure that
products are delivered on time. Companies that ignore digital transformation miss out on
improvements that can lead to increased revenue. As a result, they lose customers, brand
value, and the opportunity to innovate for better products and services.

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 REFERENCES

1. Eric Ries, “The Lean Startup”, Crown Business, 2011 Edition, 9780307887917
2. Drake, E. (2019). Digital transformation. IT3/HWC 2019 - 37th International
Conference on Thermal Treatment Technologies and Hazardous Waste Combustors.
https://doi.org/10.5204/mcj.1899
3. https://europeanbusinessmagazine.com/business/understanding-impact-digital-
transformation/
4. Bican, P. M. (2020). Digital Business Model , Digital Transformation , Digital
Entrepreneurship : Is There A Sustainable “ Digital ”? 1–15.
5. Drake, E. (2019). Digital transformation. IT3/HWC 2019 - 37th International
Conference on Thermal Treatment Technologies and Hazardous Waste Combustors.
https://doi.org/10.5204/mcj.1899
6. Gunasilan, U. (2019). Entrepreneurship As a Driver of the Digital Transformation.
International Review of Management and Marketing, 9(5), 23–29.
https://doi.org/10.32479/irmm.8264
7. Johnson, D., & Johnson, D. (2003). What is innovation and entrepreneurship ?
Lessons for larger organisations.
8. Nambisan, S., Wright, M., & Feldman, M. (2019). The digital transformation of
innovation and entrepreneurship: Progress, challenges and key themes. Research
Policy, 48(8), 103773. https://doi.org/10.1016/j.respol.2019.03.018
9. OECD. (2018). Implications of the digital transformation for the business sector -
summary. Conference on Implications of the Digital Transformation for the Business
Sector, November, 1–9. http://www.oecd.org/sti/ind/digital-transformation-business-
sector-summary.pdf
10. Rudder, C. (2019). What is digital transformation? Your top questions answered. The
Enterprisers Project, 7. https://enterprisersproject.com/downloads/digital-
transformation-cheat-sheet

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 PLAGIARISM REPORT

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 PROJECT DETAILS
Department of Electrical & Electronics Engineering
Project Details

Details of Student 1

Name Anouska Ghosh

Reg. No. 170906424 Section EEE B Roll No. 56

Mail ID anu.ghosh1999@gmail.com Mobile 8787640737

Details of Student 2

Name Aditi Saxena

Reg. No. 170906192 Section EEE B Roll No. 23

Mail ID aditisaxena3107@gmail.com Mobile 9741391449

Project Details

Project Title Implications of Digital Transformation on Entrepreneurs

Date of Reporting 4th January, 2021 Project Duration 6 months

Guide details

Name of Internal Dr. Sumukh S. Hungund

Guide

Designation, Dept Assistant Professor- Selection Grade,

Organization
Department of Humanities and Management

Mail ID sumukh.hungund@gmail.com Mobile 9980876542

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