Digital transformation of industrial firms: an innovation diffusion perspective

Abstract

PurposeThe digitization process has increased the pressure on large firms to transform. However, current frameworks on digital transformation are not well explaining what factors contribute to, or hinder, a firm's digital transformation. Innovation diffusion theories could complement existing frameworks, and for this reason, the purpose of this paper is to expand the existing body of knowledge on what contributes to, or hinders, an industrial firm's digital transformation by applying a validated framework based on innovation diffusion theories on two pioneer cases: General Electric and Siemens EHR/Health Services.Design/methodology/approachThe framework used in this paper is based on several years' empirical studies and iterative literature reviews on innovation diffusion theories. Further, each use case is based on literature reviews and unique empirical data, collected by the authors of this paper as a result of taking active part of respective company's multi-years transformation.FindingsCommon drivers of, and clear inhibitors to the two firms' transformation, were identified. The innovation diffusion framework was found to work very well in identifying those factors.Research limitations/implicationsThe implications are that researchers better can analyze/explain a digital transformation of a firm, and business managers can better plan or improve their firms' transformation processes.Originality/valueThe theoretical contributions of this paper are two: first, complement existing frameworks with a validated framework for innovation diffusion; second, provide an extension of our body of knowledge on factors that contributes to, or hinders, industrial firm's digital transformation.