Article Preview
TopIntroduction
Digital transformation aims to leverage digital tools within an organization’s processes to create value. In today’s environment, businesses must build specific digital leadership capabilities to thrive. This article systematically reviews and explores the fundamental dimensions of digital leadership and digital business transformation to elucidate why some organizations succeed in these areas. A literature review was conducted using systematic review and analysis methods, focusing on the type of publication, relevance of the topic, and date of publication from 2004 to 2024. The highlighted articles provide insights into the practical application of strategic leadership approaches, the challenges and prospects of using digitized technologies in the workplace, and their organizational consequences.
Fragile contextual variables such as technological dynamism and artificial intelligence (AI) (Fountaine et al., 2021), coupled with new inventions like cloud services and data analytics, underscore the urgency of digital business transformation and the need to redesign a firm’s internal environment. Organizations must focus on sustainability in the competitive global market while addressing these challenges and changes (Hannah et al., 2011). Consumers now expect personalized, quick, and straightforward solutions due to advancements in the digital world. Failure to meet these expectations will result in organizations losing their clientele to more perceptive competitors. Hence, achieving digital transformation objectives in the context of customer engagement is essential for any business (Verhoef et al., 2021). Digital native companies and agile startups have threatened incumbent industry firms. To defend its market share and relevance, an organization must devise digital transformation initiatives that enable it to compete on speed and creativity in these uncertain and rapidly changing markets (Coeurderoy, 2020; Ghemawat & Altman, 2016).
Sardjono et al. (2021) and Tarute and Gatautis (2022) have also argued that digital transformation can increase operational effectiveness and reduce costs due to the capabilities and mobility of e-commerce and mobile applications. Reducing cycle time and repetitive tasks can significantly improve process efficiency and resource utilization within an organization (Morakanyane et al., 2017). Morakanyane et al. (2017) and Sardjono et al. (2021) identified several indexes used to analyze the effectiveness of digital transformation across enterprises, including operational effectiveness, cost reduction, and customer satisfaction. For instance, the time and monetary savings achieved through automation provide measurable results that demonstrate the value of such digital initiatives.
However, leadership also requires flexibility in adapting to the digital environment and the ability to develop effective measures. In this context, the uncertainty and dynamism of a world increasingly dominated by technology mean that leaders must embrace innovation to drive change.
Decision-makers in today’s world need to be flexible leaders due to the constantly evolving nature of technology. Leaders must be ready for change and open to new methods. Adaptive leaders can cope with uncertainties and challenges, which are critical for implementing complex change processes and digital transformations (Solis, 2011). Moreover, digital leaders are often identified as having a visionary mindset. They excel at identifying new opportunities and understanding how technology may disrupt their business, industry, and the world. An appropriate vision for the digital transformation process provides a clear direction toward achieving organizational objectives (Sivarajah et al., 2017).