Digital transformation in operations management: Fundamental change through agency reversal

Abstract

The emergence of digital technologies across all aspects of operations management (OM) has enabled shifts in decision making, shaping new operational dynamics and business opportunities. The associated scholarly discussions in information systems (IS) and OM span digital manufacturing (e.g., Roscoe et al., 2019), the digitalization of OM and supply chain management (e.g., Holmström et al., 2019), platform outcomes (e.g., Friesike et al., 2019), and economies of collaboration (e.g., Hedenstierna et al., 2019). For such changes to be successful, however, there is a need for organizations to go beyond the mere adoption of digital technologies. Instead, successful changes are transformational, delving into digital transformation (DT) endeavors (Vial, 2019), which in turn can enable operational improvements in organizational performance (Davies et al., 2017), lead to structural changes in operations processes, and may result in new business models being deployed. Appropriately, DT endeavors are increasingly treated in both the IS and OM literature as an ongoing process rather than an isolated project with a clear start and finish (e.g., Struijk et al., 2022). Here, we adopt this line of reasoning and specifically treat DT endeavors as: “the use of digital technologies to evolve operational activities by creating new or transforming existing processes, cultures, and customer experiences to meet changing business and market requirements.” Such a perspective is somewhat distinct from widely adopted definitions of DT in IS and OM (e.g., Vial, 2019), as well as from the strict consideration of radical operational innovation (cf. Hammer, 2004). Specifically, our perspective is neither predicated on “disruption” per se, nor limited by such transformations being fundamentally strategic ones for the focal organization. In other words, DT endeavors can (i) extend into the creation of new organizational processes, (ii) transform existing processes either incrementally or more substantially, (iii) shift decision making with regard to those processes, (iv) enable the consideration of new business models, and (v) largely serve as a source of facilitation and synergy in existing ones. In this special issue, we characterize the specific role of DT in OM as follows: through DT endeavors, digital technologies have the potential to affect OM processes and decision-making with regard to finance, design, production, and the delivery of products, services, or combinations of them. The broader OM literature has already set the stage for the consideration of new business models and innovation tournaments that have been extensively influenced by DT endeavors, such as platform services, omnichannel retail, supply chain information exchange, and Internet of Things (IoT)-enabled operations. This line of research can contribute to contemporary and ongoing discussions within the broader field (e.g., Holmström et al., 2019), including the opportunities for organizations to leverage presence in one market into other areas; the emergence of ecosystems that take into consideration all players in the value chain; the appeal of multi-sided platform business models that bring together disparate actors; the value of new data sources when serving new customers; and the importance of artificial intelligence (AI) in the form of advanced algorithmic solutions as a competitive advantage for organizations. Such scholarly discussions can further consider failures caused by the complexity and comprehensiveness of actions that organizations attempt to undertake during DT endeavors (Struijk et al., 2020, 2023). Empirical research as well as theoretical insights into DT endeavors, therefore, can challenge our established understanding of OM theory and practice, and highlight the importance of organizational dynamics as intertwined with higher levels (Struijk et al., 2022). Our aim here, thus, is to provide an epistemic platform to advance our understanding of how DT endeavors, in