Managing companies’ performance in digital transformation

Abstract

Digital transformation brings manifold changes within organizations, affecting essential elements such as key products, services, processes, and business models, as well as organizational culture, structure, and capabilities. However, effectively managing performance in digital transformation is a challenging task, given the high failure rate of related initiatives. Therefore, to facilitate successful performance, this dissertation aims to develop an understanding of the integration of digital technologies with management practices. This involves bridging the realms of strategic management, performance management, and digital transformation. In addition, the dissertation presents empirical evidence sourced from multiple channels, employing a concurrent mixed-method approach. Specifically, the dissertation is based on two multiple case studies and a survey conducted between 2019 and 2021. The companies that participated in the research operated in diverse industries in Finland and encompassed both small and medium-sized enterprises (SMEs) as well as large companies. The results of the dissertation are based on five publications. They show that most companies experience challenges in using digital technologies to gain business value. Consequently, the dissertation puts forth a conceptual framework to facilitate managing performance in digital transformation. This framework encompasses key concepts such as strategic readiness, the use of digital technologies, digital strategy, changes in value creation, structural factors and barriers, performance measurement and management (PMM), and overall performance. In addition, the dissertation proposes that companies should consider the impact of the use of digital technologies and digital strategy on (1) their value creation paths and activities, (2) the development of related management capabilities, (3) integration of both perspectives into their PMM systems, and (4) fostering collaboration in the digital realm to facilitate performance growth. Finally, the dissertation provides practical insights for managers by elucidating various strategic mechanisms for managing the use of digital technologies within companies and illustrating how these technologies influence company performance in diverse ways.