Making or breaking the business case of digital transformation initiatives: the key role of learnings

Abstract

PurposeThe research aims to investigate how firms can develop their sensing capabilities for Industry 4.0 (I4.0) technology adoption through reframing their opportunity perceptions related to learnings from I4.0 initiatives.Design/methodology/approachThe research follows a design science research approach. Following the case of I4.0 technology introduction at a large food manufacturer, the paper develops a theoretical framework (artefact) and validates the applicability and efficacy of the framework within the case study.FindingsThe theoretical framework highlights the different temporal (short-term/long-term) and locational (direct/indirect) value dimensions of I4.0 opportunities. The findings show that the use of the framework can shift managers’ perception regarding the business value of an I4.0 technology implementation. Specifically, the framework reversed initially negative perceptions around a narrowly scoped business case towards an opportunity-oriented attitude exploring further potentials of the technology.Research limitations/implicationsThe research adds to the debate when and why firms engage in, and sustain their I4.0 initiatives by providing a novel perspective on firms’ sensing capabilities. As a single-case study, the framework requires further validation in practice.Practical implicationsThe proposed framework provides practitioners with an extended view concerning the potential value of digital transformation projects and serves as a conversational tool.Originality/valueThe presented wider frame for evaluating digital transformation projects, taking into account the more “intangible” value of their learnings, tackles the fundamental issue of translating explorative innovation efforts into exploitative value – a key challenge when dealing with innovation and one of the main barriers for the digital transformation.