Impact of strategic capabilities on digital transformation success and firm performance: theory and empirical evidence

Abstract

What is needed for organisations to succeed in digital transformation, and what is its advantage? Motivated by the ongoing high amount of failing digital transformations, this study identifies necessary predictors and outcomes of this prominent matter on the macro level. Drawing on strategic capabilities as enablers for the redefinition of business value and organisational identity in the digital era, we propose that the complementary synergies of strategic capabilities empower digital transformation success, improving firm performance. The results support the proposed model using structural equations modelling with multi-data from 154 organisations and complementary objective data. This study identifies synergistic facilitators for digital transformation success by providing an integrated portfolio of complementary capabilities (i.e., outside-in, spanning, and inside-out orientation). The study also contributes to IS research by offering a measurable conceptualisation of digital transformation success. In addition, findings empirically show the association between digital transformation success and firm performance to enable further investigations in the IS field. Finally, from the study’s findings, practical implications can guide organisations towards digital transformation success and firm performance.