=Paper= {{Paper |id=Vol-3031/paper4 |storemode=property |title=Towards Strategic Support and Guidance of the Digital Transformation: A Conceptual Model |pdfUrl=https://ceur-ws.org/Vol-3031/paper_4.pdf |volume=Vol-3031 |authors=Ghazaleh Aghakhani, Yves Wautelet, Manuel Kolp |dblpUrl=https://dblp.org/rec/conf/ifip8-1/AghakhaniWK21 }} ==Towards Strategic Support and Guidance of the Digital Transformation: A Conceptual Model== https://ceur-ws.org/Vol-3031/paper_4.pdf
Towards Strategic Support and Guidance of the
 Digital Transformation: A Conceptual Model

            Ghazaleh Aghakhani1 , Yves Wautelet2 , and Manuel Kolp1
                        1
                         UCLouvain LouRIM-CEMIS, Belgium
                 {ghazaleh.aghakhani, manuel.kolp}@uclouvain.be
                           2
                             KULeuven, Leuven, Belgium
                            yves.wautelet@kuleuven.be



        Abstract. Progress in digital technology has led to new business op-
        portunity and changed the way in which organizations create, deliver,
        and capture value. Traditional companies could fail in operationalizing
        their digital transformation approach because they believe that they can
        pursue digitalization simply by applying new IT technologies. Having a
        profound impact on the way business is conducted, the digital transfor-
        mation needs to be understood by the C-level executives of an organi-
        zation. For this purpose, this research aims to identify and depict the
        core digital transformation concepts using conceptual modelling. The
        latter provides a common understanding for all stakeholders of an orga-
        nization especially the board of directors from whom a clear vision and
        transformation support is required. The proposed framework provides
        a high-level overview of the custom digital transformation context that
        would help an organization in its digitalization journey and supports it to
        shift from an ad-hoc technology-driven approach to a rather systematic
        integrated approach to digital transformation.


Keywords: Digital Transformation · Conceptual modelling · Business model ·
Strategic support · Governance level


1     Introduction
Digitally enabled organizations are supported by emerging digital technologies,
which increasingly promise great opportunities for growth [27]. These digital
technologies embrace ICT systems such as mobility, analytical systems, and vir-
tualization and are integrated with back-office ICT in order to provide a holistic
view of the digital organization [27]. Such initiatives are known as being part
of the Digital Transformation (DT) of organizations and require them and their
respective management to reflect on the process of implementation.
    With the shift to digitalization, organizations cannot focus their behaviour
and reflection only on the physical/traditional world [11]. Managers in any or-
ganization must be able to recognize and anticipate technology-enabled change,
    Copyright © 2021 for this paper by its authors. Use permitted under Creative Com-
    mons License Attribution 4.0 International (CC BY 4.0).




                                        42
assess its potential and impact, and understand how to leverage digital technol-
ogy in order to capture and create value for their organizations [11]. Successful
management of an organization in a digital era requires rethinking the organi-
aztional strategy, business model, and key business drivers [11].
    Studies show that implementing large-scale ICT-enabled change initiatives
does not have a great rate of success across organizations [27, 1, 23]. The extensive
and diverse literature on DT suffers from a missing common agreement on the
exact definition of DT [47] and what it encompasses [51]. In order to address
this gap, this paper aims to address key DT concepts and provide a high-level
overview of the custom DT context which will help organizations succeed in
their DT journey. For that, we will present a framework that helps organizations
recognise DT concepts and then instantiate this framework to the case of a
digitally-enabled hospital to better understand its applicability.
    The rest of this paper is structured as follows. Section 2 focuses on the
research approach followed to carry out this research. Section 3 provides some
background information about DT and the existing research on DT conceptual
models. A running example is then provided in Section 4. Section 5 depicts the
proposed DT framework. Finally, Section 6 and 7 provide a discussion and the
resulting conclusion respectively.


2    Research Positioning and Objectives
Research Question Being in the paradigm of Design Science Research (DSR)
[22], this research has the aim to propose a solution to the problem of recogniz-
ing the necessary DT concepts in order to provide a high level view that helps
executives, at the strategic level of any organization in different industries, trans-
form their business with a minimum rate of failure. For that, this paper aims
to address the following research question (RQ): How can we represent through
conceptual modelling the key DT-related concepts/elements that can be used at
the governance-level to drive a successful DT?
The artefact built through the DSR approach is a metamodel and is, once in-
stantiated onto an organization, aimed to support strategic reasoning into orga-
nizations willing to have a structured DT approach.

Research Methodology The metamodel is based on a literature review lead-
ing to a careful reading and examination of the identified sources and was vali-
dated on the basis of an internal discussion. The literature review indeed allowed
us to identify the key contributions in the field of the DT. This was then followed
by the overall study of the identified resources which led to the extraction of the
key concepts. Each of the identified concepts were then discussed and validated
based on the basis of a discussion among the authors of the paper. The meta-
model is presented in Section 5. The latter provides an explanation of each of
the identified concepts as well as the resources they were extracted from. The
metamodel is then instantiated on a case (see Subsection 5.2) to better show the
applicability of each of the identified concepts in the metamodel.




                                       43
3     Related Work
3.1   The concept of DT
DT has become a buzzword in contemporary academic and practitioner con-
versations [17]. Furthermore, as to its strategic importance [43], DT is affecting
and challenging managers and C-level executives across industries and contexts
(eg. [53, 1, 8, 3]). Moreover, the emergence of the Covid-19 pandemic have further
urged organizations into action by increasing awareness regarding the need to
accelerate DT [14].
    According to the European Commission forecasts, one of the leading global
trends to 2030 will be a transformative industrial and technological revolution.
There are many definitions provided by business experts, academicians and gov-
ernment authorities. For example OECD [34] states that “digital transformation
refers to the economic and societal effects of digitization and digitalization. Dig-
itization is the conversion of analog data and processes into a machine-readable
format. Digitalization is the use of digital technologies and data as well as their
interconnection which results in new or changes to existing activities”. On the
other hand, Bloomberg [6] explains that “Digital transformation requires the or-
ganization to deal better with change overall, essentially making change a core
competency as the enterprise becomes customer-driven end-to-end. Such agility
will facilitate ongoing digitalization initiatives but should not be confused with
them”. For Verhoef et al. [45], DT is the way in which “a firm employs digital
technologies, to develop a new digital business model that helps to create and ap-
propriate more value for the firm”. Last but not least, according to Lucas et al.
[28], changes driven by DT relate to changes in the relationship between the or-
ganization and employees and customers, adjustment to the business processes,
and market condition. DT and the following business model innovations have
basically changed customer needs and behaviour, disrupted many markets, and
suppressed traditional firms [45]. Continuous changes in customer expectations
and behaviour are forcing organizations to take the lead in the DT [33].

3.2   DT challenges and conceptual solution
To appropriately incorporate disruptive technologies, organizations must include
the DT within their core strategy [18]. Westerman et al. [53] note that “exec-
utives are digitally transforming three key areas of their enterprises: customer
experience, operational processes and business models”. According to Heavin and
Power [18], there are major challenges of DT facing managers such as priorities
(i.e. does increasing the efficiency of existing operations have more priority than
focusing on the customer and their needs?) and security vs accessibility (i.e.
managers must balance the sensitivity and importance of data with accessibility
concerns).

   Different opinions do exist among researchers about how DT should be sup-
ported [54]. Some studies emphasize the importance of focusing mainly on cus-
tomers and their needs [42, 9]. Likewise, Bloomberg [6] states that “digitization




                                     44
and digitalization are essentially about technology, but the digital transformation
is not. Digital transformation is about the customer”. Some other studies insist
on importance of the fact that executives should support and initiate the incor-
poration of digital culture as well as the processes of organizationl change [42,
15, 19]. In their studey, Verina and Titoko [46] propose a conceptual framework
to provide a deep understanding of DT concepts. Their framework is based on
three categories of DT in business, namely technologies, people, and processes
and management. In another study, Chernbumroong et al. [7] propose a con-
ceptual model of DT by focusing to deliver greater business outcomes for Thai
SMEs. They also emphasize the three elements of people, process, and technol-
ogy, and they consider the “people” element to have the most important role in
DT process. Other studies have been addressing DT by focusing on the Covid-19
pandemic issues. For example, Muditomo and Wahyudi [31] present a conceptual
model for small and medium-sized enterprises. In their study, they focus on DT
drivers as well as strategic imperatives and DT milestones. They emphasize that
external DT drivers such as digital competition, digital technology, and digital
customer behaviour are the main triggers for DT.


4    Running Example: Digital transformation in Healthcare

As with many other industries, Healthcare has seen major benefits from DT with
the adoption of new digital technologies helping to deliver high-quality, secure pa-
tient care and drive greater business efficiency. Electronic Health Records (EHR),
Enterprise Resource Planning systems (ERP), digital imaging, e-prescription,
are all among the digital technologies that have been integrated into the IT sys-
tems of many healthcare organizations [16]. Adopting technological innovations
has primarily had an impact on the positioning of the patients and the internal
processes within the healthcare system [25].
      The rising relevance of the DT in healthcare became evident to both prac-
titioners and scholars [40]. One of the DT services popular in the healthcare
industry is Telemedicine. The latter traces back to the 19th century [2] and
refers to “the delivery of [HC] services, where distance is a critical factor, by
[. . . ] using [ICT] for [. . . ] treatment and prevention of disease and injuries, re-
search and evaluation, and for continuing education of [HC] providers, all in the
interests of advancing the health of individuals and their communities” [35].
      To illustrate and understand different DT concepts within the healthcare
industry, we take into account an evolution of the Saint-Romain hospital which
is a fictive example but partially based on previously collected data presented in
[49] and [48]. Let’s consider that due to the Covid-19 pandemic, the governance
board decides to adopt a telemedicine service. Being able to identify the related
DT concepts especially at the strategic level, Saint-Romain not only accelerates
the adoption of telemedicine but also avoids possible adoption challenges. As
such, the more guided and supported the hospital boards and executives become
regarding the adoption of telemedicine, the more effectively they can survive in
the digital world.




                                       45
5     The proposed DT Conceptual Model
This section presents the identified DT concepts in the form of a metamodel. The
main goal is to be able to recognise DT concepts especially at strategic level. As
previously mentioned in Section 2, the metamodel is built on the identification
of the key contributions in the field of DT. Table 1 shows each of the identified
concepts as well as the sources from which these concepts were retrieved.


          Concepts                                       Sources
                              Matarazzo et al. (2021) [29], Fitzgerald et al. (2014) [13],
          Customer
                                     Berman (2012) [4], Lemon et al. (2016) [26]
                                   Matarazzo et al. (2021) [29], Berman (2012) [4],
       Customer Value
                                                    Pereira (2017) [38]
          DT Service                              Wautelet (2019) [48]
                                    Ferreira et al. (2020) [11], Andriole (2017) [1],
       Technology Asset
                                  Sahu et al. (2018) [41], Henriette et al. (2015) [20]
       Market Demand          Ebert and Duarte (2018) [10], Bharadwaj et al. (2013) [5]
                        Correani et al. (2020) [8], Kane et al. [24], Bharadwaj et al. (2013) [5],
         DT strategy
                                Morakanyane et al. (2020) [30], Hess et al. (2016) [21]
         DT Objective                             Wautelet (2019) [48]
                                  Zott and Amit [55], Osterwalder and Pigneur [36],
        Business Model                 Weill and Vitale [50], Loonam et al. [27],
          Technique      Westerman, Bonnet, and McAfee [52], Myrthianos et al. (2014) [32],
                                                 Parry et al. (2014) [37]
              Table 1. DT concepts and the associated literature sources



5.1   DT Metamodel
Based on the literature study, some of the important DT concepts are identified
and described below. Each concept is illustrated on the case described in Section
5.2. The resulting metamodel is represented in Figure 1.
1. Digital Service
   Description: A digital service is a coarse-grained functional element. It
   refers to the adoption of new digital technologies in order to sustain DT
   objectives and bring value [49, 48].
   Illustration: In Fig. 1, a digital service will be an instance of the Digital Service
   class.
   Example: Adoption of telemedicine is an example of a digital service in
   Saint-Romain.
2. Customer
   Description: One of the most important motivations for organizations to
   go through their DT, is improving customer experience [13]. “The customer
   dimension concerns about the entire customer interaction journey with the
   organization through digital transformation” [4, 26]. According to surveys,
   improving customer relationships is the area where organizations have the
   most success with digital technologies. Improving customer experience fol-
   lowed closely by customer-friendly ways of enhancing products and services,
   is one of the most prominent examples [13].




                                               46
Visual Paradigm Online Free Edition




                        impacts     0..n          Digital_Service                0..n                sustains      0..n DT_objective


                                                             0..1         0..1
                    n
                                                         sustains                              n
                  Actor                                                                             Task               DT_Strategy
                                                              n                  sustains
                                                     Resource




      1..n   Customer                       0..n Technology_Asset                   Market_Demand          Business_Model_Technique


                                  supported by    0..n       0..n                           0..n                       1..n

 is assigned to
                                                                         defines
                    Customer_Value
             0..n                          0..n                                                     triggers




                                      Fig. 1. Digital Transformation Metamodel


    Illustration: In Fig. 1, a customer will be an instance of the Customer class.
    Example: In the context of Saint-Romain, patients are referred to as pa-
    tients cared by the hospital. For that, to successfully transform, Saint-Romain
    executives must focus on improving patient experience.
 3. Customer value
    Description: To improve customer experience, a successful DT requires to
    take into account various business factors, among them value proposition [4].
    The latter measures the value customers realize from consuming products
    and services of an organization. Moreover, it captures the total benefit the
    customer achieves through the consumption of the product or service, which
    satisfies their latent demand [38].
    Illustration: In Fig. 1, a customer value will be an instance of the                                                               Visua
    Customer Value class.
    Example: As explained previously, In Saint -Romain, customers are patients
    and the value brought to them through telemedicine includes “healthcare ac-
    cess from home”, “prescription delivery”, “rapid care”, “quality care”, etc.
 4. Technology Asset
    Description: Most transformational leverage are driven from tried-and-true
    strategic technology (e.g., customer relationship management software, ERP,
    etc.) and operational technology (such as networking and databases) [1].
    Usually there are five aspects, namely (i) platforms, (ii) functions, (iii) in-
    frastructure, (iv) applications, and (v) channels that have to be considered
    [41]. Technology assets are digital resources with the purpose to optimize
    and transform business activities [20].
    Illustration: In the metamodel, a technology asset will be an instance of
    the Technology Asset class.
    Example: An example of the telemedicine-related technologies used by Saint-
    Romain include a platform for enhancing communication between healthcare
    providers, which increases diagnostic accuracy of some difficult cases as well
    as improving the treatment results of critical or severe Covid patients with




                                                                    47
   limited medical resources. A remote-monitoring tool - to better perceive the
   evolution of Covid disease - is another example of telemedicine-related tech-
   nologies.
5. Market Demand
   Description: Another business factor that can impact the success of DT is
   market analysis [5]. According to Ebert and Duarte [10] “Disruptive compa-
   nies explore the occupation gaps left by the market leaders”.
   Illustration: In the metamodel, a market demand will be an instance of the
   Market Demand class.
   Example: With the raise in the number of people infected with Covid, Saint-
   Romain executives sensed the acceleration in the use of telemedicine plat-
   forms among healthcare organizations. To successfully transform, Saint-Romain
   must analyze the current and the future of the telemedicine market. As an ex-
   ample, knowing that patients need to buy their medicine after every televisit,
   it will be profitable for Saint-Romain executives (and more convenient for its
   patients) to integrate online pharmacy apps into the telemedicine service.
6. Business Model Technique
   Description: There is no widely accepted definition of the business model
   concept. According to Zott and Amit [55] business model is a “system of
   interdependent activities that transcend the focal firm and spans its bound-
   aries”. On the other hand, Osterwalder and Pigneur [36] view this concept
   as a support “in articulating how the firm creates and captures value”. Fi-
   nally, Weill and Vitale [50] describe it as a set of “roles and relationships
   among firm consumers, customers, allies, and suppliers”. Despite the differ-
   ing views, there is a consensus amongst practitioners and scholars alike that
   a business model is an important tool in supporting the strategic choices of
   an organization [32, 37].
   According to Loonam et al. [27], organizations seeking to deploy digital tech-
   nologies in order to gain greater competitive advantages must also ensure
   that their business models are aligned respectively. In their study, Wester-
   man, Bonnet, and McAfee [52] state that digital technology can drive five
   archetypes of business model reinvention, namely (i) substituting products
   and services, (ii) rethinking value propositions, (iii) re-configuring value de-
   livery models, (iv) creating new digital businesses based on new products
   and services, and finally (v) reinventing the entire industry. In this study we
   will use the word business model technique to refer to these five archetypes.
   Illustration: In the metamodel, a business model technique will be an in-
   stance of the Business Model Technique class.
   Example: As Saint-Romain is only willing to expand the use of technology
   in its business model, it will focus on reconfiguring its value delivery models
   so that it can provide online services during pandemic
7. DT Objective
   Description: A DT strategy is composed of fine-grained DT objectives [48].
   Illustration: In the metamodel, a DT objective is represented as a class
   DT Objective. As DT objectives are refinements of DT strategy, we used
   the aggregation link to model this in the metamodel.




                                   48
 8. DT Strategy
    Description: According to Kane et al. [24], “what separates digital leaders
    from the rest is a clear digital strategy combined with a culture and leader-
    ship poised to drive the transformation”. Digital strategy refers to an orga-
    nizational strategy formulated and executed through the leverage of digital
    resources to create differential value [5].
    Illustration: In the metamodel, a DT strategy is represented as an abstract
    class DT Strategy. The latter is an aggregation of DT objectives.
    Example: In the case of the Saint-Romain, their DT strategy is an aggrega-
    tion of the following DT objectives: “increased value for patients”, “provide
    healthier future for individuals by providing access to mobile healthcare”,
    “improve employee and patient experience by removing paperwork, save time
    and cost”, “access to real-time patient information”, and “reach to remote
    areas and provide personalized healthcare with use of technology”.


5.2   Model-based Representation of DT concepts

To better understand the DT concepts already presented in the metamodel (see
Fig. 1), in this section we provide a respective instantiation, called “DT Strategic
Diagram”, by considering the case of a digitally enabled Saint-Romain. The re-
sulting representation is depicted in Fig. 2. Following the DT strategic diagram,
we can see the important role of patient (customers of healthcare) and their as-
sociated values. For example, for patients, it is important to have low care costs
or to be able to easily communicate with their physicians. Saint-Romain can pro-
vide value to the patients by adopting a new digital service, here telemedicine.
The latter is operationalized through the deployment of a number of technology
assets, namely Real-time audio/video communication, store-and-forward, and re-
mote patient monitoring. While real-time audio/video communication provides
patients with better communication and receiving customized treatment plans,
remote patient monitoring supports patient values such as good patient experi-
ence and reduction of time and cost in patient flow. The telemedicine adoption
is mainly defined by the analysis of the market and triggers Saint-Romain to
come up with new techniques regarding its business models. For example, be-
cause of the Covid-19 pandemic, the healthcare market is pushing the healthcare
industry towards more virtual ways of working. Based on such market demand,
Saint-Romain decides to adopt telemedicine which triggers the hospital to recon-
figure its value delivery models in order to provide online services to the patients
especially during Covid-19 pandemic. Subsequently, the adoption of the new dig-
ital service will have an impact on the strategic objectives of the Saint-Romain,
here, using telemedicine helps the hospital to expand the use of technology to
deliver services to patients as well as in remote locations.




                                     49
                                                   support
                                                              Store-and-forward
                         Access to relevant tools
                             and resources
                                                                                                                     Provide rapid
                                                                                                                     response to
                                                                                       help
                                                                                                                      covid crisis


                                 Better
                              communication       support                                                      define           Empower patients &
                                                                                                                                 healthcare workers

                                                             Real-time audio/video             Telemedicine
                                                 support                              help                              help
         patient                                               communication                     adoption

                           Receive customised                                                                help        Expand the use of technology to
                             treatment plans                                                                              deliver services to patients in
                                                                                                              help        hospitals as well as in remote
                                                                                                                                     locations
                                                                                        help       trigger


                               Good patient                                                                        Facilitate meaningful
                                                   support
                                experience                                                                     communication & information
                                                                                                                  exchange across care
                                                                Remote patient                                           boundaries
                                                                  monitoring
                                                   support                                 Reconfigure
                                                                                          value delivery
                                                                                             models
                                                                                        to provide online
                           Reduction of time and                                             services
                            cost in patient flow




                       Legend

                        help/hurt      Contribution link            Assignment link                  Customer value


                                                                                                      Business model
                   trigger/support/define Connection link           Market demand                        technique


                                                                                                            DT
                                      Technology asset                 Customer
                                                                                                         objective


                                      Digital Service




Fig. 2. Instantiation of Figure 1 - DT Strategic Diagram - case of a Digitally enabled
Saint-Romain

6    Discussion and comparison with other methods
With the provided metamodel our research allows executives to recognize im-
portant DT concepts as well as to see the impact of each of these concepts at
the strategic level board decisions when it comes to the DT. On the other hand,
instantiating the metamodel into a case study enables first, to represent each of
the DT elements to emphasize its significant role when applied to an organiza-
tion (here a healthcare) when it seeks to achieve DT, and second, to depict the
possible impact each of these elements can have on each other. Finally, we can
see how the adoption of new technologies affect the strategic objectives of an
organization.
    As previously mentioned in Subsection 3.2, similar studies exist with the
focus on conceptual modelling. Some of these methods are listed below:
 – Muditomo & Wahyudi (2020) [31]. Their conceptual support provides
   SMEs with a flow model that can describe decision-making steps in deter-
   mining strategic imperatives and measurable DT milestones;
 – Verina & Titko (2019) [46]. Their model focuses attention on factors
   enabling DT processes as well as on potential outcomes for business and
   society;




                                                                 50
 – Udovita (2020) [44]. Their method consists pf identifying different dimen-
   sions of digital transformation that a firm can adopt in its DT process;
 – Heavin & Power (2018) [18]. They provide a conceptual decision support
   guide for managers;
 – Rautenbach et al. (2019) [39]. Their model aims to provide a diversi-
   fied assessment toolset which helps organizations in enabling value-adding
   digital transformation by providing them a value equation for each digital
   dimension;
 – Chernbumroong et al. (2021) [7]. Their model defines the states that
   enable digital transformation processes as well as the role and interaction of
   people.
    Based on the analysis of each of the aforementioned studies and their respec-
tive methods, our approach entails novelty in that it makes use of conceptual
modelling to help researchers and practitioners understand the many DT con-
cepts that are required to be identified and understood by the top-level gover-
nance board of an organization as well as how these concepts are interrelated.
We believe that to make DT operational, we should start from the governance
level. Our framework helps C-level executives understand the requirements of
DT and to identify its components.


7   Conclusion
In this paper we proposed a framework to model DT concepts and restitute a DT
situation into an organizational DT strategic diagram. For that we first built a
metamodel to introduce the new concepts and the way they are interrelated and
second, instantiated the metamodel into an illustrative example of a healthcare
instantiation (i.e. Saint-Romain hospital). With the constructed metamodel and
the DT Strategic Diagram, we answer the research question raised in Section 2.
As emphasized by Kane et al. [24], more than being a matter of technology, DT is
about adopting a consistent digital strategy. Therefore, to successfully transform,
organizations or more precisely executives, should be aware of important digi-
talization concepts beforehand. Having a clear vision and digital strategy helps
them achieve the required DT maturity. Moreover, based on our research, one of
the most important concepts is customer value as today customers are becoming
more than ever digital-savvy and organizations should create products and ser-
vices that meet customer value. To come up with such products and services and
be able to create value, organizations need to reconfigure or reinvent their busi-
ness models to define the required set of activities to create and capture value.
For that, we consider the business model as another important DT concept. As
of other important DT concepts, we can refer to technology asset and market
demand. The analysis of the latter helps organizations in their adoption choice
(i.e. which technology can help them survive in the market and avoid disruption)
and sustain their strategic objectives.
    Despite the advantages of the presented framework in recognizing key DT
concepts, the framework has the limitations to not consider security and privacy




                                    51
issues. Future work includes addressing the latter, which remain key factors (and
a real dilemma in the case of healthcare [12]) when adopting new technologies.


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