Linking digital transformation and strategic partnership to partnership performance: the mediating role of service innovation

Abstract

This research is intended to investigate the effect of digital transformation, strategic partnerships, and service innovation on partnership performance. The population in this study is made up of 95 organizations that are partners of the Ministry of Finance in receiving state revenues. The research is explanatory research with a quantitative approach that collects data by distributing questionnaires to 95 managers from different organizations. The data was analyzed using structural equation modelling and partial least squares with SmartPLS software. The results show that digital transformation has an insignificant effect on partnership performance, while the other variables, namely strategic partnership and service innovation, have a significant effect on partnership performance. However, with the mediating variable service innovation, the effect of both digital transformation and strategic partnership becomes significant. The results of this study suggest that organizations must apply digital transformation to service innovation to obtain the desired partnership performance.