Effective Digitalization of Business Processes Evrim Oya GÜNER evguner@gmail.com understanding of IT which cannot be entirely separated ABSTRACT Despite the vast research on digital technologies and from being digital. This extends to business processes digitalization, little is known about the drivers, where digital technologies are the main components of requirements, challenges and implications of business business operations. Characterized by the process digitalization. The common understanding that homogenization of digital data, programmable digital emerges from the literature is that investments in digital computing architecture, and self-referential nature [3], technologies provide several benefits to firms. However, digital technologies reshape the conventional business the drivers, requirements, challenges, and implications of processes into modular, distributed, cross-functional, and business process digitalization still need to be explained. global ones [2]. Additionally, in todays globally networked business Although the scope of digital technologies is wide and environment, process digitalization should be open to interpretation, sensors, radio frequency investigated on a multi-firm setting. In order to identification (RFID)/near field communications (NFC), investigate the process digitalization on a multifirm beacons, machine-to-machine communication (to setting, an exploratory approach can be embraced and monitor machines and automate the production), multiple case studies can be conducted for data robotics, 3D printing, drones, blockchain and collection. Grounded theory can be used to analyse the cryptocurrencies, virtual and augmented reality, artificial data collected through the case studies. intelligence, cognitive computing, machine and deep learning are specified as digital technologies [4]. In Keywords addition to these, some of the digital technologies Business process, business process digitalization, associated with the digitalization of business process digitalization, digital technologies. includes: INTRODUCTION • Big data analytics tools and applications, Digital technologies have been transforming the way • Mobile tools and applications, firms work across the industries continuously. Due to the features inherent in digital technologies, firms expect to • Digital platforms that enable digital capability sharing increase their capabilities such as responsiveness, such as cloud computing solutions and app innovativeness and competitiveness by digitalizing their marketplaces, business processes and align with today’s rapidly • Social media tools and applications, changing business environment. • The Internet of Things, including connected devices Studies show that advancements in information and “smart” networks [5]. technologies (IT) have been renovating the business processes in a consistent manner. More than two decades There is a common view that investments in digital ago, Davenport and Short [1] claimed that the technologies provide several benefits to firms. According transformation of business processes into IT enabled to the Global Information Technoly Report [6], digital processes was inevitable and IT capabilities had a technologies are pillars of winner-take-all dynamics in significant role when redesigning the business processes. many industries, and early adopters have advantages In the recent past, traditional business processes have over the followers. However, prior research also points started to be considered as IT enabled business processes out that the value generated by digital technologies is which are more information sensitive, customer-centric difficult to evaluate [7],[8]. and complex [2]. Viewed as digital technologies, the combination of information, computing, communication, and connectivity technologies [2] created a new PROBLEM STATEMENT In previous literature, innovation is defined as “the Despite this critical transformation with regard to creation and adoption of an idea, a product, a technology, business processes, the literature provides relatively little or a program that is new to the adopting unit” and the information about the digitalization process and does not innovations which enable the creation of new forms of cover all stages- from the discovery to the implications digitalization is considered as “digital innovations” [3]. of business process digitalization. Insight into this aspect Since digitalization of business processes is realized is important for improving our understanding of the through the adoption of digital technologies, it is drivers and requirements of business process appropriate to evaluate digital technologies as digital digitalization and how firms decide when they reason innovations and refer the DoI theory as theoretical about possibility of digitalizing their business processes. foundation. Furthermore, previous research is dominated by the METHOD studies identifying positive outcomes of business process In order to investigate the drivers, requirements, digitalization. The challenges that firms can face while challenges and implications of business process embracing digital technologies, requirements and digitalization, case study method can be applied in implications of business process digitalization are different case sites. Case study is a method which allows touched upon rarely and this field remains relatively multiple ways of data collection including interviews, unexplored. observations, pre-recorded documents, and secondary Considering the gains derived from business process data for investigating a phenomenon intensively within digitalization such as increased collaboration and its natural setting in one or a few sites [11]. Within the availability of qualified information, it can be inferred scope of the reserarch questions, the case study should be that efffective business process digitalization also applied in more than one site to establish causality and depends on and extends to the firms’ outer circle where generalize the findings from single case site to other case the business relations are built and sustained. Therefore, sites. This strategy is called “multiple case design” business process digitalization should be examined in the which includes replicating and comparing the analysis in context of multiple firms where reciprocal effects are different case sites with the aim of improving the addressed. Although the literature provides a number of generalizability [11]. studies on “IT-based cocreation of value” [7], this topic The data collected through case studies can be analysed needs to be discussed further within the framework of using Strauss and Corbin’s [12] Grounded Theory business process digitalization. Analysis. Grounded Theory Analysis [12] serves well the RESEARCH QUESTIONS purpose when the aim is to discover new insights about As identified in the problem statement, knowledge on an existing phenomenon and the topic of interest has business process digitalization is heavily based on the been relatively ignored in the literature or has been given explanations of transformational effects and benefits of only superficial attention [13]. digital technologies. In general terms, the literature focuses on the firms’ alignment with digitalized business LITERATURE REVIEW environments through the adoption of digital technologies rather than explaining how this alignment In this section, it is aimed to provide a clear understanding of business process digitalization by will be accomplished in practise. Emerging from this defining the concepts “business process”, “digital context, there are research questions which need to be technologies” and “digitalization”. The section also answered are as follows: provides the brief account of the existing knowledge in 1. What are the drivers, requirements, challenges and the fields of digital technologies and business process implications of business process digitalization? digitalization. 2. Can multiple firms create business value collectively Definition of Business Process through digitalization of business processes? One of the definitions of business process is “a set of logically related tasks performed to achieve a defined THEORETICAL FRAMEWORK business outcome” [1]. Accordingly, business processes In order to constitute the theoretical foundation to have two main characteristics. The first one is that they investigate digitalization of business processes, Diffusion have customers both internal and external to the firm; of Innovation (DOI) Theory [9] can be used. DOI theory and the second one is that they cross the boundaries of is a theory of “how, why, and at what rate new ideas and the firm [1]. technology spread through cultures, operating at the individual and organisation level” [10] and emphasises Digital Technologies the characteristics of technological innovations (e.g. As previously defined in this documents, digital relative advantage, complexity, compatibility, technologies are combinations of information, observability, triability) along with the internal and computing, connectivity and communication external characteristics of organization as the influencers technologies [2] which connect the products, processes of technological innovation adoption. and services; transform the businesses at both strategical business processes. Table 1 presents these studies and operational levels [2], [14] according to the type of digital technoloy along with the sector/business unit or the process that it transforms. The transformative impact of digital technologies has been addressed by researchers in different studies [2], Table 1. The use of different digital technologies in [8]. According to [2], these technologies provide different sectors/business units or processes dynamic capabilities for responding the changing Author, Year and Type of Digital Sector/ requirements of internal and external environment of the Name of the Study Technoloy Business Unit or firm, reshape the business strategy into a form which is Investigated Process time, distance and function independent and change the Chen, J., Yen, D., & Smartphone Logistics Chen, K. (2009). The social relations of the firm by means of virtual acceptance and networking. As a consequence, digital technologies give diffusion of the rise to the new business models such as peer-to-peer innovative smart networks, freemium, delivering outcomes (mainly driven phone use: A case by Internet of Things), crowdfunding/crowdsourcing, as study of a delivery service company in a service, ecommerce/ marketplaces and personalization logistics. [4]. Another transformative impact of digital Goebel, C., RFID Logistics/Supply technologies can be traced at the marketed products and Tribowski, C., & Chain Management services in which digital technology is embedded as an Gunther, O. (2009). Adoption of cross- expansion of digital transformation [2], [8]. company RFID: An empirical analysis of Digitalization perceived influence Digitalization is defined by addressing its difference factors. Elsenpeter, R. CAD/CAM Medical/Dentistry from digitization as “by digitalization, we mean the (2016). New transformation of socio-technical structures that were Technologies, New previously mediated by non-digital artifacts or Materials, New relationships into ones that are mediated by digitized Workflows Ferretti, M., & IoT Maritime Logistics artifacts and relationships. Digitalization goes beyond a Schiavone, F. /Transposrtation mere technical process of encoding diverse types of (2016). Internet of analog information in digital format (i.e., “digitization”) Things and business and involves organizing new socio-technical structures processes redesign in seaports: The case of with digitized artifacts as well as the changes in artifacts Hamburg themselves” [3]. Bechtsis, D., Smart Agriculture Tsolakis, N., Distribution From a business perspective, digitalization can be Vlachos, D., & Systems defined as “the use of digital technologies to change a Iakovou, E. (2017). (Automated business model and provide new revenue and value- Sustainable supply Guided Vehicle producing opportunities; it is the process of moving to a chain management in Systems) the digitalisation era: digital business” [15], [16]. Based on this definition, The impact of [16] indicates that digitalization improves the quality of Automated Guided buying and selling decisions, increase the efficiency of Vehicles production, transportation and customer relations in business domains. In this sense, digitalization creates On the other hand, there are studies related to digital new channels where the information flows and technology use in business which do not focus on a communicates with both internal and external customers. specific digital technology; rather, they focus on the sector and the business unit that have been digitalized. Prior Research on Digitalization of Business Processes Table 2 presents these studies according to the It is known that digitalization of business processes is a sector/business unit where the business process topic of interest for both academia and industry. The digitalization is realized. literature contains several studies related to business Finally, the last group as a sample from the literature process digitalization which emphasize the significant composed of the studies that focus on the type of the operational, strategical and organizational changes that digital technology (e.g. IoT and Enterprise Mobile digital technologies create along with the benefits Applications) rather than the business unit/process that it provided. At this point, it is important to note that the directly transforms into a digital business process. These research on business process digitalization vary by the studies are presented in table 3. type of digital technology in question since digitalization can be realized through the adoption of different digital technologies [14], [17]-[26]. Among these, there are studies which focus on different digital technologies and explain how these digital technologies transforms the Table 2. The use of digital technologies in different reflect themselves while exploring the drivers and sector/business unit or process requirements of business process digitalization. To be Author, Year and Type of Sector/Business Unit more specific, the digitalized business processes drive Name of the Study Digital or Process the firms to renovate the processes continuously. This Technoloy renovation can be monitored in case sites until the Investigated cyclical trend is observed and maturation of findings of Setia, P., Venkatesh, Not Specified Banking/Customer V., and Joglekar, S. Service Unit the cases are approved. (2013). Leveraging Digital Technologies: Another significant contribution is to explain the effects How Information and implications of business process digitalization in a Quality Leads To multi-firm setting to create business value. Localized Capabilities And Customer Service The research questions described and proposed in this Performance resarch are of the interest to researchers and practitioners Li, F. (2015). Digital Not Specified Creative Industries (art, for at least two reasons. First, such a research can Technologies and the music, fashion,etc.) Changing Business provide insights from the practioners and present both Models in Creative the advantages and disadvantages of the business process Industries digitalization. Second, it would to the future research on similar topics. Table 3: The use of digital technologies in business REFERENCES Author, Year and Type of Sector/Business Unit [1] Davenport, T. H. & Short, J. E. (1990). 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Developing Mobile Business Processes for the Computer and Sytem Sciences, Stocholm University, Internet of Things. IEEE Pervasive Computing, 9(2), 18- Stockholm, Sweden in 2014. Her research interests cover 26. emerging technologies, digitalization, cloud computing, IT Management and ICT in developing countries.