Strategy for digital transformation that supports manufacturing business value

The emergence of new digital technologies and their potential strategic contribution is currently one of the most prominent concerns for organizations. Despite the opportunity brought on by modern digital technology, an estimated 66-84% of digital transformation projects end up failing. Therefore, a research question was formulated as; How to formulate a strategy for digital transformation that supports manufacturing business value? An abductive research approach was utilized to reach two main research objectives; Creating a description of how the current and future digital landscape is understood and creating a description of how digital transformation can be constructed and what strategies and/or strategical elements exist within that construct. Furthermore, one manufacturing case company within the automotive industry and specifically its formal initiative and efforts to conduct a digital transformation were examined. By creating this comprehensive context, it was believed that existing knowledge could be solidified, and new knowledge could be created to answer the research question. Scattered and diverse findings regarding a multitude of elements are presented in the frame of reference, in order to build a strong basis for analysis. Distinguished levels of conceptual strategies within the construct of digital transformation are recognized as “Digital Business Strategy” and “Digital Transformation Strategy”. An empirical study is presented that examines present elements such as a conceptual roadmap, task teams, and an overall description of a formal initiative towards digital transformation, as well as how these elements are interpreted and understood by leaders within the organization. The analysis consists of a comparison between the presented literature and the empirical findings. This is viewed through the lens of the research objectives in order to show commonalities and differences between the literature and the case company, and to corroborate findings. Most prominent is the absence of a digital business strategy at the case company in contrast to the expressed necessity for one in the literature. In a presented discussion, strategy as a linkage between business value and digital transformation is argued to be direct through a digital business strategy. The answer to the stated research question is that digital transformation and strategy formulation can not be understood as a linear, but rather an iterative and evolving process involving building an absorptive capacity, assessing maturity, formulating a digital business strategy, and creating a roadmap and a digital transformation strategy that support the digital business strategy and the maturity level. Conclusively, the findings of this report are corroborated by each other but lack empirical evidence as to the meaning of being successful and valuable manufacturing business in the setting of the fourth industrial revolution is yet unknown. However, practitioners are encouraged to employ a conscious business model perspective, while researchers are discouraged of thinking about digital transformation as a linear and sequential process