Transform or be transformed: the importance of research on managing and sustaining digital transformations

ABSTRACT

Digital transformation is here to stay. With the emergence of new digital innovations and diverse and rich data sources, only those organisations that can adapt faster and make better, quicker decisions will become more competitive. Yet, being a first mover is only the start of the transformation process. Organisations need to address and implement digital strategies to manage and sustain a digital transformation in order to stay with, or ahead of, their competition. In this article, we outline some of the key challenges associated with researching digital transformations within the information systems (IS) field and stress the importance of shifting the focus on how digital transformations are managed and sustained. To explore this further, we launched a Special Issue on “Managing and Sustaining Digital Transformations” and received a large volume of submissions. After a series of reviews and revisions, we were delighted to unearth four excellent articles on this important topic. Our hope with this Special Issue is to improve researchers’ abilities to identify the importance of managing and sustaining digital transformations and to encourage them to build on these contributions to better unpack the digital transformation process for the future.

KEYWORDS:

• Digital Transformation
• Managing
• Sustaining
• Research Agenda

1. Introduction

Ever since the world became digitally connected though the global interconnect computer network (i.e., the Internet) almost 40 years ago, the world has changed radically with billions of people now connected through various digital devices. Given this increased connectedness, digital transformation has the potential to radically re-write how individuals, businesses, and societies live, work, learn and entertain (Brunetti et al., 2020; Hess et al., 2016). The strong trajectory of information systems (IS) research looking at technology-enabled transformation and change indicates that although the concept of digital transformation may not be new per se, its importance and intensity for organisations has significantly increased as a result of how technological advancements continue to modify boundaries, operations, and profit expectations of organisations. Research developments over the past few decades have evolved from digitisation, digitalisation, and digital transformation. Digitisation refers to the process of converting analog information into digital format, such as scanning paper documents into digital images. Digitalisation refers to the integration of digital technologies into everyday life and business practices and builds on IT-enabled change and IT change management, such as using software to automate processes or support a business function (for example ERP or CRM). Digital transformation refers to the profound and accelerated transformation of business and organisational activities, processes, competencies, and models to fully leverage the opportunities of the digital era. Therefore, digital transformation goes beyond digitisation and digitalisation and involves a change in core practices, processes, culture, and mindset, with a focus on delivering new value to customers, employees, and the wider society. It is therefore not surprising that digital transformation has gained significant interest among IS researchers and practitioners (Legner et al., 2017; Markus & Rowe, 2021; Mergel et al., 2019; Vial, 2019). Indeed, the ongoing acceleration of digital technologies in today’s business environment poses not only opportunities but also major challenges for organisations to continuously invest in and embed transformations in order to survive.

Our motivation for pursuing this Special Issue was prompted, in part, by a number of factors, some of which emerged from digital transformation research and others from common assumptions held across IS literature and industry. We tried to be all-encompassing by choosing a broad theme of “managing and sustaining” digital transformations. This is important given that a digital transformation is often considered to be a “journey” or a never-ending process of continuously reconfiguring an organisation through the exploitation of digital technologies to enhance its value (Chanias et al., 2019; Mergel et al., 2019; Vial, 2019; Warner & Wäger, 2019). Yet, we also need to recognise that organisations need to achieve some stability while being in flux throughout the transformation process. In addition, digital transformations have the potential to create a new and improved identity for an organisation (Wessel et al., 2021) which can bring about a new business purpose as well as new values, a new culture, and new roles (Carroll & Maher, 2023; Hinings et al., 2018; Ranerup & Henriksen, 2019). Yet, when we examine the literature around digital transformation, there is a growing concern that digital transformation efforts may end up in failure – which is not surprising given a reported aggregated failure rate of 87.5% (Wade & Shan, 2020). This demonstrates, among other things, that our empirical understanding of how organisations implement digital transformations initiatives still remains fragmented (Loonam et al., 2018). However, the majority (if not all) of the published cases on digital transformation seem to describe successful transformation processes. Thus, there seems to be a real disconnect between the IS literature and the practitioner audience failing to report on reasons surrounding the high failure rates. In fact, researchers might have focused too much on a very narrow perspective of digital transformation that has generated many assumptions across IS research about the digital transformation phenomenon. To draw additional attention and “lift the hood” on the so-called success or failure stories, we need to shift the focus towards understanding more about the transformation process and the associated techniques, challenges, and complexities around managing and sustaining digital transformations.

2. Managing and sustaining digital transformations

Digital transformation may not be considered a new topic per se, however, its relevance to organisations has dramatically changed as advancements in technology have accelerated. While initiating a digital transformation can be considered a daunting task, sustaining the transformation process typically receives much less attention (Carroll, McLafferty, et al., 2021). The term “sustain” may be defined as “to cause or allow something to continue for a period of time” (Cambridge Dictionary, 2023). The need to “continue” over a “period of time” is critical within a digital transformation context but given its complexity and the gravity of its uncertainty, business executives are increasingly seeking new ways of ensuring business continuity and stability. Yet, despite the hype and promise of digital transformation (OECD, 2019; Omar & Elhaddadeh, 2016), studies have identified significant shortcomings on how organisations approach a transformation process, along with its risks and employee resistance (Magnusson et al., 2021; Vial, 2019).

We know that the process of digital transformation is inherently uncertain, and the majority of efforts typically fail (Tabrizi et al., 2019; Wade & Shan, 2020). Central to the challenge of undergoing a digital transformation is the need to strategize about how to embed and sustain a long-term transition from a business’s current state to its future state and to synchronise diverse groups across an organisation with the goal to improve and strengthen its competitive position (Prahalad & Krishnan, 2002). However, organisations often grapple to sustain the ripple effect of a digital transformation for various reasons, including traditional hierarchies and organisational bureaucracy (Mergel et al., 2019), hence the high failure rate. In addition, just as the pandemic accelerated, the need for change through digital transformation laid bare the massive global shortage of digital skilled employees needed to deliver and operationalise digital transformation strategies. As a result, organisations turned towards other methods of empowering employees, letting them play a direct role in digital transformation efforts and, by doing so, building momentum to manage and sustain digital transformations. In fact, there is a growing trend across organisations towards the adoption of citizen development – an approach which guides non-IT users with little to no coding experience to build low-code or no-code digital applications that solve specific business problems and drive digital transformations (Carroll & Maher, 2023).

In many cases, employees realise the need to undergo a transformation before the managers do. The COVID-19 pandemic, for example, was found to be an unfortunate accelerator regarding digital transformations whereby many organisations were forced to transition to new operating models (Gavrila & Ancillo, 2021) and “new normal” work practices (Carroll & Conboy, 2020). It directly impacted many industries, such as retail, restaurants, and education (Soto-Acosta, 2020). In addition, software companies were particularly interested in the topic of digital transformation since they were forced to deal with the opportunities and risks of novel digital technologies much earlier than others (Hess & Bohrer, 2022). It became evident that a systematic approach towards digital transformations across various industries was needed (Hess & Bohrer, 2022).

Digital transformation explicitly implies using digital technologies as a vehicle to drive significant changes through an organisation’s capabilities, structures, business model, culture, and roles. Regardless of the digital technologies used, a transformation requires a roadmap that guides an organisation to steer the vehicle on its long journey. It is important to steer the transformation process as much as possible to have a positive impact and influence on the business model (Carroll, 2020; Fitzgerald et al., 2014; Kraus et al., 2021) in the search for opportunities to improve the overall value chain (Porter, 2008). Yet, while extant literature on digital transformation describes considerable efforts to usher in the new digital technologies with few considerations for a means to sustain the long-term transformation process, it is fundamental to establish new insights on how they contribute to sustaining transformations within the fabric of an organisation.

One of the reoccurring issues across IS research studies that directly impacts our understanding of digital transformations is the set of weak assumptions derived over very short research timeframes, often ranging from six months to one year only. Indeed, many digital transformation studies have been restricted to short timeframes covering the initial adoption of digital technology only rather than subsequent phases of digital transformations and long-term normalisation, which are crucial for embedding and sustaining a transformation.

Throughout the Special Issue, we also identified a number of key themes relating to challenges around digital transformation in IS research. We attempt to summarise these in Table 1. Despite the lack of clarity surrounding the unique characteristics of digital transformations, its implementation inevitably poses major challenges for contemporary organisations (Vial, 2019; Wessel et al., 2021). These challenges may include constant disruption, repudiation of norms, risky experimentation, and high failure rates (Gregory et al., 2018; Kozak-Holland & Procter, 2020; Libert et al., 2016). In particular, many digital transformation initiatives fail in practice to deliver expected outcomes, tangible benefits, or to trigger evolutionary change at large scale. While research efforts can often be constrained due to research timeframes, budgets, and access to organisations, digital transformations do require longitudinal case studies which can explain, for example, the various pathways, capability improvements, and decision-making processes throughout the transformation. Furthermore, the process of digital transformation calls for an innovative cultural approach that can sustain the radical changes across organisational settings and their complex pathways towards a digital-led configuration (Garzoni et al., 2020).

Table 1. Summary of challenges on digital transformation in is research.

Theme	Summary of Challenge
Problematising assumptions on digital transformation research	Problematization supports us to challenge assumptions central to digital transformation and present an alternative set. Problematization as a method encourages us to identify and challenge the assumptions underlying existing theories and discourse surrounding digital transformation which is central ingredient in the development of more interesting and influential theories rather than merely identify gaps in literature.
Misusing the term ‘digital transformation’ for all things digital	Language and choice of phrase matters–not least to support a cumulative tradition in IS. The wrong turn of phrase can make a difference between change and transformation, between initiating and sustaining, or between implementation and success. The IS research community needs to be more cautious and deliberate about the term ‘transformation’ when reporting on digital transformation case studies and the transformation process.
Taking a longitudinal perspective to observe digital transformations	We need to encourage the IS research community to move away from reporting on snapshots of digital transformations and explain how they meander throughout the transformation process. We need to develop research designs which involve repeated observations of the same key research variables for a specific digital transformation context over long periods of time. While this may involve multiple researchers over numerous years, it will unpack key factors and trace various pathways during the transformation process that are most important for us in the field.
Examining the root causes of failing to sustain a digital transformation	Although it is widely reported that the majority of digital transformations fail, there is very little research that examines or traces the origin of such failures. While the root cause tends to lead back to how leaders execute a digital transformation strategy, more insights are required on how leaders attempt, but fail, to manage or sustain the transformation process.
Exploring what socio-technical factors are intertwined in a digital transformation	Although the majority of digital transformation research has focused on digital factors, the diffusion of digital technologies to transform an organization is enacted by people. Additional research is required to develop insights about the intertwined properties of a digital transformation while considering a socio-technical perspective and the fluid nature of those relationships over a specific timeframe.
Sustaining and normalizing a digital transformation	Digital transformation research is still in its infancy and most studies focus on the initial adoption and implementation of digital technology rather than the subsequent long-term normalization and sustainment of the transformation process, and how it becomes normalized in practice. The focus on normalization is novel and allows us to uncover how a digital transformation unfolds and becomes stabilized over time and how it provides a new vocabulary of capturing the distinctiveness of the process by unpacking the inner workings of a digital transformation.
Modelling the evolution of digital transformation pathways	When developing digital transformation strategies and empowering employees to play a role in digital transformation, we need to better understand how the transformation process can evolve beyond technology and move towards a cultural shift. Additional research is required to focus on the use of modelling tools and technologies to capture the impact of various management techniques with a focus on temporality, maturity, value mapping, etc. to trace the evolution of transformations over time.
Defining success for a digital transformation	To be successful, digital transformations require clarity and a roadmap towards a defined vision of success. However, given the reported high failure rate of digital transformations, we need more clarity on how managers define and plan for successful digital transformation efforts from multiple perspectives (e.g., business, capability maturity, socio-technical, financial, productivity, performance, etc.).
Reporting on the risks associated with digital transformation	While a digital transformation can bring many benefits, it also presents a number of challenges, including the risk of disruption to existing business models and the potential for external threats, for example, cybersecurity concerns. Additional research should also focus on new models for governance, risk management and compliance as organizations scale digital transformation initiatives.
Strategizing transformations around digital advancements	Strategizing for digital technology advancements is challenging, and organizations grapple with it as a constant ‘moving target’. Organizations find themselves in a state of flux, transforming from one state to another while aligning with market changes and customer demands. Strategies can quickly shift from mobile, to cloud, analytics, AI advancements, and emerging frontiers in information systems. Additional focus should also consider new research frontiers beyond digital transformation, i.e., examining what happens after the transformation process.
Looking at the dark side of digital transformation	Given the growing challenges and high failure rates associated with digital transformations, we need to investigate the dark side of digital transformations and its implications and unforeseen consequences on individuals, organizations, and wider society. Additional research also needs to focus on the growing challenges associated threats to roles, implications on data privacy and other digital threats such as with cybersecurity to realize the potential implications of digital transformations.

3. Special issue

In this Special Issue, we argue that the key to sustaining a transformation is to embed what we may call an “execution engine” – a replicable process that fundamentally changes performance rhythms and decision-making within the organisation. From a research perspective, this requires formulating key research questions to develop insights beyond technology and strategic choices. We need to zoom in on the nuanced details around daily initiatives that change how an organisation works to arrive at a digital transformation’s vision. This is fundamental, as we argue that a digital transformation refers to the deep structural business changes organisations make to core processes and business models by exploiting the use of digital tools to compete and meet customers’ demands. Moving beyond a strategic focus and understanding how this is practically achieved, IS researchers will need to examine how organisations assess and understand the competition that motivates the need to embark on a digital transformation. More fundamentally, IS research needs to examine how managers decide on a strategic focus, how they make changes to the organisational structure and culture, and how they decide on streamlining processes using digital technology to deliver improved value (Vial, 2019; Warner & Wäger, 2019). A white spot that has not been tackled in the current academic debate thus far is the question of “What comes after a digital transformation?” (Hess & Bohrer, 2022).

For all those reasons, we put out a call for papers on “Managing and Sustaining Digital Transformations” (Carroll, Hassan, et al., 2021) in 2021 with a deadline of January 21st, 2022. We received a large number of submissions from all across the world. After the first round of reviews, we identified those articles that closely aligned with the Special Issue and invited them to an author development workshop to build and expand on the feedback provided by the reviewers. As part of this workshop, we argued that by examining how digital transformations are embedded and sustained requires a set of new perspectives to better understand the complexities associated with digital transformations (Granovetter, 2018; Uzzi & Lancaster, 2003). For example, embeddedness can better explain how economic actions are interlaced with the social bonds of business stakeholders, and how those actions can be applied to phenomena such as innovation and knowledge creation (Hallin et al., 2011). By unpacking different perspectives of digital transformation and efforts to manage and sustain them, we can better explain how socio-technical factors and various intricacies are intertwined to maintain momentum for digital transformations over the long-term. The articles in this Special Issue contribute to such perspectives.

While there is considerable hype around digital transformation in recent years, in reality we know that many organisations struggle to grasp what a digital transformation really entails (Carroll, McLafferty, et al., 2021; Hess et al., 2016) from a strategic, operational, and cultural perspective (Bharadwaj et al., 2013; Loonam et al., 2018; Matt et al., 2015; Sebastian et al., 2017). This hampers scholarly advancements, particularly from a theoretical perspective. For managers that do believe digital transformation is a critical strategic journey for their organisation, the pace of change can be slow or lack any real urgency (Fitzgerald et al., 2014). Even if organisations gain some momentum for their digital transformation strategy, there is fear that their digital transformation efforts may end up in failure (Fitzgerald et al., 2014; Wade & Shan, 2020). One reason is that our empirical understanding of how organisations implement digital transformation initiatives remains extremely fragmented (Loonam et al., 2018). But digital transformation failures are not at all a mystery. A number of common causes exist that lead to the high failure rates (Wade & Shan, 2020), including unrealistic expectations, limited scope, poor governance, and cultural barriers. It is widely acknowledged that those failure points pose major challenges for practitioners (Bughin et al., 2019; Davenport & Westerman, 2018; Tabrizi et al., 2019) and shines a light on the various assumptions that still exist around sustaining digital transformations.

4. Papers in this special issue

In this EJIS Special Issue on “Managing and Sustaining Digital Transformations”, all papers contain a new perspective of digital transformation that addresses many of the issues outlined above. As digital transformation moves towards achieving an important role in its raison d’être, digital innovations will continue to transform organisations in a proactive way or be a reason to transform them in a reactive way. We have four articles in this Special Issue that provide new perspectives and frontiers on (i) theory and metaphor for digital transformation; (ii) leadership roles to manage and sustain digital transformation; (iii) tensions among professionals with transforming and scaling; and (iv) readiness of microbusinesses to digitally transform.

The first article by Roxana Ologeanu, Cameron Guthrie, and Tina Jensen entitled “Digital Transformation of Professional Healthcare Practices: Fitness Seeking Across a Rugged Value Landscape” presents a middle-range theory, describing the various paths a digital transformation may take in healthcare practices. The authors adopt the metaphor of a “fitness landscape” from evolutionary biology to describe how changes in behaviours and the availability of new digital resources transform the value landscape. They explain how healthcare professionals respond by searching for new paths and peaks of value creation and delivery across a rugged landscape. The theory, along with the metaphor, captures in an imaginary way the complexities of managing and sustaining a digital transformation.

The second article by Arne Buchwald and Felix Lorenz entitled “A Perfect Match or An Arranged Marriage? How Chief Digital Officers and Chief Information Officers Perceive Their Relationship: A Dyadic Research Design” provides insights into the role of collaboration between Chief Information Officers (CIO), Chief Digital Officers (CDO) and their top management teams. The authors apply conflict theory and present a dyadic design approach to report on relationship and role conflicts and tight alignment between the roles. This study demonstrates the importance of a so-called “perfect match” or the need to introduce the new role of a Chief Digital and Information Officer (CDIO) to better resolve the challenges associated with managing and sustaining digital transformations.

The third article by Sirkka Jarvenpaa and Lisen Selander entitled “In Between Scale and Impact: Membership Prototype Ambiguity in Digital Transformation” focuses on aspects of scaling within a digital transformation context. Specifically, it presents novel insights on the bottom-up approach for digital transformations of social movement organisations. The article describes how the rapid growth of new members introduces a tension to prototype ambiguity and captures the attributes, assumptions, and actions of new members entering the digitally transforming organisation. They explain how such ambiguity can have a destabilising effect on collective identity that might significantly weaken the overall sustainability of a digital transformation.

The fourth article for this Special Issue is by Shirish C. Srivastava, Anuragini Shirish, and Niki Panteli entitled “Management and Sustenance of Digital Transformations in the Irish Microbusiness Sector: Examining the Key Role of Microbusiness Owner-Manager”. The authors describe the challenges of digital transformation for microbusinesses and focus on the role of owner-managers, their management and sustenance of their digital transformation initiative, and their digital transformation readiness. The authors explore growth and technology mindsets and how it contributes to owner-managers’ learning resources and processes. In doing so, they identify different archetypes – champion digital transformers, emerging digital transformers, and aspiring digital transformers.

We hope you enjoy the four Special Issue articles which span a wide range of key dimensions of digital transformation. As research efforts on digital transformation will continue to grow along with the advancements of digital technology, we are confident that this Special Issue will trigger new avenues for future research to expand our understanding of managing and sustaining digital transformations.

Acknowledgements

We thank all the associate guest editors and reviewers for their thoughtful insights, their time, and their tireless efforts to develop the set of papers further. Without their dedication, this Special Issue would not have been possible. Our associate guest editors were (alphabet order): Alexander Benlian; Amany Elbanna; André Hanelt; Arto Lanamäki; Brian Fitzgerald; Christian Matt; Christiane Lehrer; Ciara Heavin; Gregory Vial; Jonny Holmström; Michael Cahalane; Nancy Pouloudi; Netta Iivari; Rob Gleasure; Steffi Haag; Sven Rehm; Xiaofeng Wang; and Yogesh K. Dwivedi. Special thanks to Kieran Conboy and Michael Myers for their support with the Special Issue.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported with the financial support of the Science Foundation Ireland grant 13/RC/2094_2 and co-funded under the European Regional Development Fund through the Southern & Eastern Regional Operational Programme to Lero - the Science Foundation Ireland Research Centre for Software (www.lero.ie). This work was also supported through the University of Galway strategic fund to establish the Citizen Development Lab (www.CitizenDevelopmentLab.com).