Digital Transformation in Contemporary Organizations: Creativity and Innovation in the 4th Industrial Revolution

Introduction

Globalization has been forcing companies to fulfill their potentials on the basis of creativity and innovation in the fourth industrial revolution. The current competition parameters have been labeled as creativity, expertise and innovation (Case, 2016). Companies can only survive in the market where they are able to adopt creativity and innovation (Xie, 2017; Zhao, Feng, Chu, & Ma, 2017). At the occurrence of 4th industrial revolution (4IR/ Industry 4.0); digital transformation, contemporary artificial intelligence (AI) and AI techniques, creativity and AI creativity have gained attention. Industry 4.0 is a new paradigm of cyber systems that include internet of things (IoT) by combining areas of AI, machine learning (ML) and robotics. AI refers to ‘‘a system’s ability to interpret external data correctly, to learn from such data, and to use those learnings to achieve specific goals and tasks through flexible adaptation’’ (Kaplan & Haenlein, 2019, p. 17). AI system can convert the data into human-level knowledge such as machine reading and computer vision and can use gained information to expedite tasks that were completed by human effort previously (Taddy, 2018). In the study of Brock and von Wangenheim (2019), AI has positive impact on smart services, office automation, management support, smart products, manufacturing automation and automated customer interface. They use digital transformation within the AI projects context (e.g., transformations of call centers or operations using IoT, advanced analytics and AI). AI projects and AI management systems help organizations for effective AI implementation. AI capability and AI creativity are needed to actualize AI implementation. AI capability and AI creativity have been handled together on the basis of resource-based theory. It has been argued that AI capability comprises of tangible, intangible and human dimensions (Mikalef & Gupta, 2021). AI capabilities are taken into consideration through innovative business model in which scalable ecosystem integration (value capture), data-driven delivery operations (value delivery), and agile customer co-creation (value creation) are combined. Organizational capabilities for AI implementation are essential to overcome AI challenges such as uncertainty nature of AI projects and data dependency for AI implementation.

Transformation and innovation in digital world is taken into consideration as digitalization (Schreckling & Steiger, 2017). Digitalization is defined as ‘‘the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business’’ (Gartner, n.d.a). Digitalization and digital transformation are reciprocal terms in digital technologies. Digital transformation is related to innovation. In the center of digital transformation and innovation dimensions such that customer centricity and technology foundation where leadership and strategy, processes, people and skills, business models and offerings (products and services), structure and governance and culture are assessed to have successful digitalization. The digital innovation and transformation framework of Schreckling and Steiger (2017) underlines that customer centricity is the main beneficiary of the digitalization and it is crucial to focus on the expectation and preferences of customers, creating engaging activities with customers to understand their needs and wants, identifying change in customers’ preferences in the digital environment, understanding to what extent the values obtained by customers are matched with the corporate strategy and business models, putting customers in the center of enterprise to develop a comprehensive digital strategy with them.