Digital Transformation of Industrial Organizations: Toward an Integrated Framework

Abstract

ABSTRACT Industrial organizations are responding to new risks and opportunities originating from exponentially growing and disruptive digital technologies, by taking company-wide digital transformation initiatives. However, the key enablers of such digital transformation initiatives that facilitate operational performance outcomes in industrial organizations demand further investigation. Therefore, drawing on the sociotechnical system theory (STS), the objective of this study is to explore the digital transformation enablers and their impact on performance outcomes. Research data was collected from four leading industrial organizations that engaged in digital transformation programmes. Our results indicate that leadership, structures, and culture are the key enablers of digital transformation that help industrial organizations to achieve performance outcomes (i.e. collaboration, customer-centricity, and agility). By providing an empirically grounded integrated framework with future research propositions, this study contributes to the existing literature on digital transformation and sociotechnical system theory. MAD statement This article aims to make a difference by exploring industrial digital transformation in order to identify the key enablers and performance outcomes. We highlight the need for alignment and joint optimization of social and technical systems to effectively capitalize on the digital transformation initiatives. Moreover, we call for urgent attention to the development of leaders, as well as the further identification of supportive digital transformation leadership competencies. Competent leaders assume a central role in correcting outdated and invalid assumptions, conceptualizing new ideas, and reinforcing cultural values. Furthermore, we elaborate the necessity of cultural transformation in industrial organizations for impactful digital transformation. Lastly, our findings confirm the significance of organizational structure in digital transformation and simultaneously warn that too little is happening.