Abstract
The purpose of this document is to systematically review and summarize the literature that studies the impact of digital transformation on companies' business strategies, centered on the key capabilities for a successful digital strategy, as well as on the determinants of success. The systematic review of literature was based on a sample of 39 articles extracted from the Web of Science. The results indicate that leadership, innovation, and organizational structure are the key skills most referenced in the literature for the implementation of a digital business strategy. The trans-functional role of IT, as well as the strategic posture of the company, were also identified as determinants of success. This study provides us with a comprehensive analysis of the success factors of digitalization in companies and helps to identify potential research opportunities. The chapter ends with a research agenda for future studies.
TopIntroduction
The age of globalization encourages companies to embrace and exploit the opportunities presented by digital strategies. The world seems limitless and scientific and technological development is unstoppable (Muafi, Grabara, Sudiyarto, & Siswanti, 2019). However, for organizations to succeed in digital transformation1, they need to redesign and redefine their business strategies. To drive the digitization of business processes, products, and services, it is essential to develop a better understanding of digital business strategies (Yeow, Soh, & Hansen, 2018).
Business strategy has evolved significantly over the last twenty-five years. Organizations have learned to analyze their environment, define their position, develop business advantages, and understand the pressures to maintaining advantage in the face of challenging competitive threats (Casadesus-Masanell & Ricart, 2010). However, factors such as globalization, deregulation, and technological change, to name a few, are profoundly changing the business arena. As suggested by Li et al., (2016), digital technology is increasingly empowering organizations without boundaries in collaborative business environments and forcing new business strategies. Digital technology has changed the boundaries, economies of scale and strategic focus of companies, rules for value creation and supplier-customer interaction.
Being present in a national market without a digital strategy is just a survival approach, but it is almost impossible to penetrate the international market without digital leadership (Fosic, Trusic, & Sebalj, 2017). Overall, digital business strategies help transform markets and support innovation in modern economies by interfacing with customers, partners, and suppliers (Romanelli, 2018). Current digital trends are leading companies to redefine their product and business portfolio by digitizing products and services (Gutierrez-Leefmans, Nava-Rogel, & Trujillo-Leon, 2018).
According to (Romanelli, 2018), governments, businesses and communities need to leverage technology and adopt a digital strategy to improve, sustain growth and create social and public value together. In business, digitization is changing the competitive landscape in many industries. Digitization goes beyond the benefits companies derive from digital platforms, but also reflects the ways in which digital media and platforms influence the restructuring of business, society, and culture (El Sawy et al., 2016). Digitally savvy customers are demanding more, while the threat of digital disruption from new companies is increasing (Sia, Soh, & Weill, 2016). Digital platforms are enabling cross-border disruption in the industry, leading to new forms of business strategies (Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013). Since all businesses use digital technology in some form, no business is immune to digital disruption, and the evolution of digital technology will present unique opportunities and challenges to all leaders (Karimi & Walter, 2015), opening up new opportunities for knowledge sharing and value creation and emphasizes the concept of enterprise and digital ecosystem (Romanelli, 2018).
Key Terms in this Chapter
Leadership: Ability to inspire others, influencing behaviors and actions in a positive way.
Systematic Literature Review: Methodology that allows a systematic review of published literature on a particular area of study.
Digital Business Strategy: Digital business strategy is the organizational strategy formulated and executed by leveraging digital resources to create differential value.
Digital Platforms: Technological platforms that allow interaction between systems and/or between systems and users.
Innovation: New concept or product derived from a new idea or scientific investigation.
Digitalization: The use of digital technology to do anything. For example, switching invoices from paper to electronic format.
Business Strategy: Detailed plan with the actions to be developed to achieve business success.
Digital Transformation: Digital transformation is a process of continuous change, driven by technology, companies and our entire society.
Dynamic Capabilities: Companies' ability to reconfigure internal and external competencies to deal with rapidly changing environments.