Practical advice

A summary of advice based on a selection of research articles is given below (with references and links to internal article reviews where available):

Top management support:

• Digital transformation needs to be envisioned, supported, and guided from the top management [7]. This may be particularly important in the initial phase where existing norms and practices need to be critically reflected upon. Top-management support is hence crucial to develop a shared understanding of, and commitment to, the work to be done [8].
• Different perspectives on IT between business and IT managers may represent challenges for digital transformation, and it is important that IT management develops a vision and negotiate the business case for the transformation program. Organizations should also resist perceiving efficiency and innovation as contradictory outcomes and demands [4].

Development and exchange of knowledge:

• Organizations should emphasize networking, collaborating, and exchanging knowledge on digital transformation [7].
• Organizations may benefit from developing capabilities in digital scenario planning and digital scouting to pinpoint new technological, customer, and competitor-based trends, and to predict the emergence of future competitors from adjacent industries. Big data analytics and artificial intelligence can in this regard also contribute to sense new customer-centric trends that are hard for strategic planners to predict [9].
• There is a growing importance of external collaboration and taking a viewpoint/strategy of “winning with partners” may be viable. Traditional incumbent organizations should consider building or joining a digital ecosystem to work with new partners on “co-creation” and “coopetition” activities [9]. Learning how to identify, encourage, and leverage external partners is important, and can be accomplished by use of scenario planning workshops, innovation contests, and crowdsourcing initiatives. Such open collaborative approaches can also contribute to improving the digital maturity of the workforce [8].
• Organizations should emphasize mutual learning between the digital and traditional business. Interaction between the top management team (particularly CEO) and the digital unit is important in this regard, as well as between the digital unit and IT department to understand IT systems. Employees from various departments should also be involved in mutual knowledge exchange to get a sense of the new business and build mutual understanding [10].
  • Organizations should arrange regular meetings across functional boundaries and hold workshops involving multiple organizational levels [7].
• Organizations should explore whether and how standardization of IT can be a fundament for differentiation and innovation. Business units must therefore be involved in discussions on how standardization of core systems can be combined with differentiated and flexible satellite systems [4].

Organization of work:

• Organizations should consider different options for organizing their work on digital transformation [11]. They must carefully configure governance structures and create new standard operating procedures and governance processes [7].
  • Creating a new department may be necessary to run and coordinate the digitalization work [10], as well as other governance structures like digital transformation board, steering group, and judging panel. Steering and executing digital transformation efforts under the direct responsibility of the CEO may avoid the work being hindered by internal politics [7].
  • Organizations need to balance new opportunities and established practices [8]. In case of tensions between the digital and traditional business, organizations can consider placing the project under an existing function (e.g. marketing) [10], as this may leverage the legitimacy and institutionalized practices of an existing functional unit [11].
  • Decisions on organization of innovation work need to include assessment of competing concerns that may arise. This requires competence on how to combine different logics, i.e. combining digital innovation logics with traditional product innovation management. Organizations should in this regard be aware of (and be prepared to manage) the potential resistance among employees (e.g. middle managers) experiencing discrepancy between existing practices and novel work processes and requisite capabilities. It also requires development of capabilities for decision-making that are consistent with risks and uncertainties associated with digital innovation [8].
• Organizations may benefit from efforts to integrate existing and new business, and (in later phases of the transformation work) seek to expand and integrate growing digital processes with traditional business. To achieve this, organizations can explore opportunities for job rotation and/or internal repositioning to bridge new and old business [10]. Organizations should also seek to identify processes and other internal resources that could be used for work on the new digital business – i.e. resources that can help align the new and existing business and/or existing resources that the new business can exploit. However, it is important that organizations are observant of tensions between the digital and traditional business during all phases of the transformation work, and initiate actions to reduce/eliminate tensions that might occur [10].
• Bottom-up strategizing as part of the digital innovation process may be more effective than a top-down approach in driving digital transformation. Bottom-up strategizing may foster and enable the required cultural transformation, and hence contribute to change the prevailing styles of leadership and working [7].

References / sources

1. Understanding digital transformation: A review and a research agenda.
   Vial, G. (2019). The Journal of Strategic Information Systems, 28(2). 
2. The digital transformation playbook. Rethink your business for the digital age.
   Rogers, D. (2016). Columbia Business School Publishing. 
3. Digital maturity, not digital transformation.
   Kane, G.C. (2017). MIT Sloan Management Review.
4. Paradoxes and the nature of ambidexterity in IT transformation programs. 
   Gregory, R.W., Keil, M., Muntermann, J. & Mähring, M. (2015). Information Systems Research, 26(1). 
5. How DBS Bank pursued a digital business strategy 
   Sia, S.K. Soh, C. & Weill, P. (2016). MIS Quarterly Executive, 15(2).
6. Five myths about digital transformation.
   Andriole, S.J. (2017). MIT Sloan Management Review, 58(3).
7. Digital transformation strategy making in pre-digital organizations: The case of a financial services provider. 
   Chanias, S., Myers, M.D. & Hess, T. (2019). The Journal of Strategic Information Systems, 28(1).
8. Embracing digital innovation in incumbent firms: How Volvo Cars managed competing concerns. 
   Svahn, F., Mathiassen, L. & Lindgren, R. (2017). Management Information Systems Quarterly, 41(1).
9. Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. 
   Warner, K.S.R. & Wäger, M. (2019). Long Range Planning, 52(3).
10. Aligning with new digital strategy: A dynamic capabilities approach. 
    Yeow, A., Soh, C. & Hansen, R. (2018). The Journal of Strategic Information Systems, 27(1).
11. Digital innovation and institutional entrepreneurship: Chief Digital Officer perspectives of their emerging role. 
    Tumbas, S., Berente, N. & vom Brocke, J. (2018). Journal of Information Technology, 33(3).

Other external resources for practitioners

Unlocking success in digital transformations (McKinsey & Company)

5 myths about digital transformation (Computerworld)

Relevant presentations: “The transformative effect of digitization on organizing” [3:55] by Professor J.P. Eggers and “Rapid scaling of digital ventures” [22:30] by Professor Ola Henfridsson

Article reviews related to Digital transformation