Abstract
The 21st century has seen significant changes in the way enterprises operate and are managed. One of the most important key trends was digital transformation, which has had a profound impact on enterprises, forcing them to transform their operations to become more agile, efficient, and customer focused. Despite its many benefits, this digital transformation has not yet fully entered the traditional sector such as the furniture one. Hence, the main purpose of this chapter was to present how what factors could affect the integration of 4.0 technologies by Spanish companies from the furniture sector. The Tornatzky and Fleischer's Technology-Organisation-Environment model and an in-depth study of the art of the furniture sector were used to define these factors. Based on those factors, the author has been conducting comprehensive research in Spanish furniture sectors companies using interviews. From this conducted research, it can be concluded that the organisational factors influence the adoption of 4.0 technologies more than environmental or technological factors.
TopIntroduction
Since the beginning of this second decade of the twenty-first century, we are currently experiencing rapid and accelerating changes, both in society and in the environment that businesses operate in (climate change, COVID-19 pandemic, Russia-Ukraine conflict, the increase in fuel prices and raw materials, etc.) (Allam et al., 2022). Businesses need to make financial and behavioural changes that will lessen the likelihood that future shocks will have an impact on their daily operations as well as on them, while also attempting to increase their resilience to them when they do (Building Back Better, 2020).
This resilience should be primarily fuelled by a technological revolution that results from widespread adoption of technology, where businesses will digitise more quickly and adopt fully digital technologies and ways of working to transform their business models and generate new revenues (Galvin et al., 2021).
And this shift to a digital environment is becoming more prevalent every year. The International Data Corporation (IDC Global)'s Digital Transformation Spending Guide predicts that from 2021 to 2025, expenditure on digital transformation would grow at a Compound Annual Growth Rate (CAGR) of 16.4%. This is a result of businesses pursuing a more comprehensive digital strategy that considers people, process, technology, data, and governance. By 2025, the global amount spent on the digital transformation of business processes, products, and organisations is predicted to be more than double from that of 2020, reaching around 2.6 trillion euros (Shirer, 2022).
The digital revolution in which industry and, therefore, the business cluster is immersed to achieve what is commonly known as Industry 4.0 has been progressive and depends very much on the sector and activity concerned (De la Torre, 2018). Traditional industrial sectors such as furniture are lagging in transforming their business models and production systems due to their lower investment in Research, Development and Innovation (R&D&i) and the low-skilled profile of a large part of their workforces (Del Val, 2016).
Nevertheless, other studies (Nascimento et al., 2019; Wang et al., 2017) have suggested and demonstrated success stories from companies about the potential of 4.0 technologies to provide furniture companies with operational efficiency, data control, and overall higher productivity that positions companies in today’s highly competitive and personalised market (Capgemini, 2019).
Under this context, this chapter will analyse what factors condition the digital transformation of organisations in the furniture sector through the application of the Technology, Organisation and Environment (TOE) model of Tornatzky and Fleischer.
Key Terms in this Chapter
Technological Factors: One of the components of the TOE model that refers to the characteristics of the technology itself, including its features, capabilities, and compatibility with existing systems.
Organisational Factors: One of the components of the TOE model that refers to the internal factors within the organisation, including its culture, structure, resources and the skills and knowledge of its workforce.
4.0 Technologies: Term also known as Industry 4.0, refers to a set of advanced technologies that can transform the way that products are manufactured and delivered. Some examples are the Internet of Things, Artificial Intelligence, etc. These technologies are transforming manufacturing processes, supply chain management and customer interactions, enabling companies to be more efficient, flexible and responsive to customer needs.
Environmental Factors: One of the components of the TOE model that refers to external factors that can influence technology adoption, such as regulatory, economic and social factors.
Furniture Sector: Industry dedicated to the manufacture, marketing and supply of furniture items (chairs, tables, beds, cabinets, etc. from different spaces and applications such as home, workplace, hotels, etc.). Manufacturers, distributors, retailers, and other similar companies are included in this.
Digital Transformation: Process by which an organisation attempts to integrate digital technology into all the areas of the business in a way that completely changes the way it delivers value to customers.
TOE Model: Framework used to understand the adoption and implementation of new technology innovation in organisations. This model suggests that this adoption depends on the three main contexts: technology, organisation and environment.
Innovation: Process of developing something new or enhancing an existing product, service or process to better serve clients or address a challenge. For that purposes, ideas, resources or technology could be brought.