Business Developer | Nicolai Errebo Birch 💻
Business Developer | Nicolai Errebo Birch 💻
Overview of digital transformation: alignment of tech and operations, small tests, and measurable progress.
Digital transformation sits within broader business adaptation. It isn’t the only factor, but it often determines whether change sticks. When technology is aligned with people, processes, and day-to-day operations, organisations adapt faster to disruptions and opportunities, meet evolving customer needs, and create room for future growth and innovation.
In the first of the four industrial revolutions, steam power was the disruptive technology that changed the world. In the second, it was the assembly line; in the third, the computer. Today, we are in the midst of the fourth industrial revolution, which is digital.
Intelligent digital technologies such as artificial intelligence (AI), machine learning, the Internet of Things (IoT) networks, advanced analytics, and robotics have the potential to redefine how we work and conduct business – and how companies engage with their customers and the world (Abdin, 2017).
Data analytics and ROI
A study of German SMEs reports a weighted average ROI of 13.44 from data-analytics initiatives, indicating earnings gains or cost reductions when analytics are applied to core processes. The finding supports prioritising analytics tied to operational decisions and building the basic data capabilities needed to realise those returns (Pfister & Lehmann, 2023).
Macro outlook
The World Economic Forum estimated that the value unlocked by digital transformation could exceed $100 trillion by 2025, driven by technologies such as AI and cloud computing and enabled by cross-sector collaboration at global, industry, and societal scale (World Economic Forum, 2016).
Budget reality
Deloitte notes that over half of IT spend goes to maintenance, with roughly 19% allocated to innovation; Spiceworks reports that refreshing ageing infrastructure remains a primary driver of rising IT budgets (56% plan increases), underscoring the balance between upkeep and new investment (Deloitte, 2020; Spiceworks, 2021).
Following the financial and strategic signals, it helps to ground the “why.” In Vial’s view, digital transformation is propelled by disruption – shifts in customer behaviour and expectations, competitive dynamics, and data accessibility. These pressures push organisations to refine strategy and operations, and to use digital platforms and ecosystems where they create real value (Vial, 2019).
Vial also emphasises integrative capabilities: the ability to connect people, processes, data, and partners across increasingly complex value networks. This coordination capacity often determines whether change sticks. Taken together, the need to adapt and to integrate is why digital transformation moves from “beneficial” to “essential” in a dynamic, digital-first environment (Vial, 2019).
This page offers a brief overview of digital transformation. Core ideas, a simple framework, and a few practical indicators to watch. It also includes short case pointers, a concise FAQ based on questions I had, and a reference list for further reading.
Overview of digital business development: definitions, scope, a practical method, brief examples from startups, FAQ, and sources.
Overview of digital transformation and why it matters, with theory notes (framework, building blocks), indicators, and example links.
Digital communication in a transformation context: interaction models, stakeholder dynamics, plus theory, method notes, and an FAQ.
This section draws on Vial’s (2019) framework for digital transformation. An analysis of 282 scholarly articles (from an initial pool of 381) that describes the process through eight interlinked building blocks. The aim of the framework is to characterise what digital transformation is and what it does to organisations, not to prescribe a single way of working (Vial, 2019).
On this page, I use Vial’s model as a lens: first a short definition and process overview, then brief snapshots of the core components that commonly appear in transformation work, followed by references for deeper reading. The goal is orientation and shared language rather than a comprehensive guide (Vial, 2019).
Note: The arrows do not indicate a statistical relationship or causality as found in variance models. Instead, they outline a comprehensive sequence of relationships described by DT literature (Vial, 2019).
Vial’s (2019) literature review looks at 28 sources and identifies 23 different definitions of digital transformation. He then proposes his own definition based on that range of views. Three points stand out: most definitions are written from an organisational perspective (with less attention to sector- or society-level effects); the technologies in use and the context strongly shape what DT looks like and what it delivers; and, despite similar wording across studies, there are ambiguities and overlaps that make the concept hard to pin down. To address this, Vial uses semantic decomposition, breaking the idea into parts and rebuilding it, to clarify terms and arrive at a more precise, workable definition (Vial, 2019).
Through ‘semantic decomposition,’ Vial identifies four foundational characteristics of DT: (1) target entity, (2) scope, (3) means, and (4) expected outcome. Leveraging these pillars, he proposes a definition:
“a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies” (Vial 2019, p. 121).
This conceptual framework not only serves as the bedrock for our theoretical understanding but also guides our practical approach to navigating the DT process. It emphasizes a holistic view, incorporating human, organizational, and technological perspectives. It promotes strategic adjustments to leverage technology in value creation, addressing structural challenges and barriers.
Happy to share a pointer or compare notes.
The core technologies in Vial’s (2019) research on digital transformation are encapsulated by Sebastian et al.’s (2017) SMAGIT acronym, representing social, mobile, analytics, cloud, and the Internet of Things (IoT), with Vial also emphasizing platforms as a crucial technology. This highlights the situational use of digital technologies in combination, extending beyond common technologies like the internet, software, and blockchain, which, while central to digital transformation, appear less frequently.
Digital technologies naturally induce disruption, affecting societies, industries, or specific organizations. Vial (2019) identifies three primary areas impacted by digital technologies: customer behavior and expectations, the competitive landscape, and data accessibility. These areas underscore the transformative power of digital technologies in reshaping traditional norms and practices.
Faced with disruption, organizations must devise strategic plans to remain competitive. Digital technologies present both significant opportunities and existential threats. Vial (2019) views the response to disruption as both an endogenous and exogenous phenomenon, leading to the emergence of digital business and transformation strategies as means to navigate these challenges.
Digital business and transformation strategies pivot on the use of digital technologies to alter the value creation process. According to Vial (2019), digital technologies’ value largely depends on the context, with organizational change emerging as a result. He highlights new pathways for value creation through digital transformation, fundamentally altering digital business models and the value creation process itself.
The shift in value creation precipitates structural changes within organizations, emphasizing the importance of cross-functional collaboration. Vial (2019) also points to culture, leadership, employee roles, and competencies as critical facets of digital transformation, influenced by these structural adjustments.
Despite a focus on transformation, inertia and resistance can impede the realization of digital transformation. Vial (2019) argues that overcoming inertia and resistance, particularly concerning disruptive resources and capabilities, is among the most significant challenges facing organizations today.
Finally, Vial’s (2019) framework acknowledges that digital transformation can yield both negative and positive outcomes, with implications spanning societal, industrial, and organizational levels. While the focus often remains on organizational impacts, the broader consequences of digital transformation encompass operational efficiency, performance enhancements, and societal improvements, alongside concerns over security and privacy.
Transforming the delivery industry with rapid, drone-based delivery of medical supplies.
Redefining the travel industry by making private homes available to travelers worldwide.
Pioneering in virtual reality, bringing immersive experiences to consumers and businesses.
Automating business processes with Robotic Process Automation (RPA), enhancing efficiency.
Revolutionizing the global finance sector with its borderless banking platform.
Optimizing agriculture with data analytics and automated operational reports.
Notes & references
Short FAQ and selected references for orientation and further reading.
The alignment of technology, operations, and ways of working so an organisation can deliver value in a digital context. It involves changes to processes, roles, and data use, not only new tools.
It helps organisations adapt to shifting customer expectations and market conditions, improve efficiency and reliability, and create room for new products, services, or delivery models.
Common starting points include a brief current-state map, a small set of outcomes and indicators, and a limited pilot that can be reversed if needed. The scope is kept tight so learning can inform the next step.
Cultural resistance, unclear strategy or ownership, integration with legacy systems, data quality and governance, and competing budget priorities. Progress tends to stick when responsibilities are clear and reviews are regular.
Abdin, M. (2017). Digitisation of SMEs – Opportunity or challenge. Recieved from https://dx.doi.org/10.2139/SSRN.2917003
Deloitte Insights. (2020). Tech leaders reimagining work, workforce, and workplace. Recieved from https://www2.deloitte.com/us/en/insights/focus/technology-and-the-future-of-work/tech-leaders-reimagining-work-workforce-workplace.html
Pfister, P., & Lehmann, C. (2023). Measuring the success of digital transformation in German SMEs. Recieved from https://dx.doi.org/10.53703/001c.39679
Sebastian, I. M., Ross, J. W., Beath, C., Mocker, M., Moloney, K. G., & Fonstad, N. O. (2017). How Big Old Companies Navigate Digital Transformation. MIS Quarterly Executive, 16(3), 197-213.
Spiceworks. (2021). The State of IT 2021. Recieved from https://www.spiceworks.com/research/state-of-it-2021/
Vial, G. (2019). ‘Understanding digital transformation: A review and a research agenda’, The Journal of Strategic Information Systems, 28(2), pp. 118–144. Recieved from doi:10.1016/j.jsis.2019.01.003.
World Economic Forum. (2016). 100 trillion by 2025: The digital dividend for society and business. Recieved from https://www.weforum.org/press/2016/01/100-trillion-by-2025-the-digital-dividend-for-society-and-business/
