Abstract
Digital transformation is at a very early stage. Digital transformation has several impacts on business, on organization and process and raises several questions. Over the years, the aims of strategic fit and IT-business alignment have remained constant but the environment in which companies operate has changed significantly becoming more dynamic, very competitive and global. This chapter attempts to analyse how the digital transformation could affect more specifically strategic and IT-business alignment.
TopDigital transformation is a polysemous, buzz word (Sugahara et al., 2017, p.71). There are many dimensions of digital transformation sometimes confused with other terms such as digitization or digitalization (Table 1).
Digital transformation is often considered as the next step of digitization. Digitization is the process of converting information from an analog to digital format. For example, in the entertainment industry, the dematerialization of content has had repercussions not only on production, but also importantly on exploitation, broadcasting and distribution. In the context of convergence, these technological changes are also accompanied by changes in common practices adopted by consumers and strategies of the main firms involved (Daidj, 2015; Danowski & Choi, 1998).
The term “digitalization’ closely related with computerization was used first by Robert Wachal in 1971 who discussed the social implications of the “digitalization of society”. In the Oxford English Dictionary (OED), digitalization refers to “the adoption or increase in use of digital or computer technology by an organization, industry, country, etc.” Gartner’s IT glossary defines digitalization 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.”
As regards digital transformation, definitions are numerous elaborated by both practitioners and academic scholars. Keyur Patel and Mary Pat McCarthy (2000) have been among the first authors to address the digital transformation issue by highlighting three questions as follows: What is digital transformation? How does it change business? What are the challenges for B2B companies and B2C companies in making a digital transformation?
Table 1 presents an overview of definitions of digital transformation summarizing key focus words contained in the definitions.
Key Terms in this Chapter
Digital Transformation: This new trend (in relation with new technologies) will entirely transform organizations, value capture models, current business models, customer experience and will lead to the implementation of radical changes.
IT Alignment: Fit between organization/strategy and IT/IS capabilities.
Strategic Fit: Match or congruence between a firm’s organization/strategy and environmental issues (internal and external consistency).
Competencies: They include knowledge, know how, skills, abilities, and behavior.
Disruption: Often associated to technology or innovation, this phenomenon can create also major changes in industry frontiers, business processes and business models.
Digital Economy: The digital economy marks a historical shift in approach to businesses and potential commercial activities thanks to ICT and to new technologies (artificial intelligence, big data analytics, cloud computing, IOT, machine learning).
Resources: They include two main categories tangible (human, physical, technological etc.) and intangible assets. Data are considered as resources and data analytics as skills (see above).
Digital Business Strategy: Fusion between IT strategy and business strategy.