Changes in Value Creation Paths in the Digital Transformation of Established Companies: A Multi-level Perspective

Digital technologies, such as mobile technologies, analytics, and cloud computing are ubiquitous in our daily lives and affect individuals, companies, and societies at large. Especially established companies find themselves confronted with changing customer demands and new competitors (e.g., start-ups), thus starting concentrated efforts of undergoing so-called digital transformations (DT). Such DT not only enhance existing value creation but may massively change existing or create completely new value creation paths for the established companies. These alterations form the affordances of novel digital technologies, i.e., their action potentials, and can usually be classified in one of three categories: value proposition and value networks, agility and ambidexterity, and digital channels. Previous research has predominantly examined how established companies initiate their efforts with DT strategies and what elements compose a DT. A few studies started to investigate outcomes of the DT of established companies and primarily focused on longer-term outcomes on an organizational level (e.g., improved financial performance), while the success rate of DT remains low. Research on outcomes specific to DT’s changes to value creation paths, also on levels other than the organizational level, is scarce. Latest research started to identify such outcomes and indicated that they may hinder DT success (e.g., self-depletion of agile developers, privacy concerns of customers). However, we require more insights to gain a more comprehensive picture of DT, to address hindrances once they are known, and to finally increase DT success rate. Hence, this thesis aims to unveil unknown outcomes of DT of established companies on an organizational and individual level (with individuals being customers or employees of established companies). Against this backdrop, four articles are part of this thesis, organized along changes in value creation paths during the DT. The first article uncovers novel outcomes on an organizational level of actualized changes in value propositions and value networks. Established companies often create additional platform-based digital business models during their DT, concurrent to their established business models. The change towards concurrent business models, with one being platform-based, create outcomes in terms of important synergy potential and both business models can fuel each other. In the second article, outcomes of changes in agility and ambidexterity are examined. Within the IT function, DT often leads to ambidextrous bi-modal IT functions, consisting of one “agile IT” and one “traditional IT”. Establishing this bi-modal IT (in the sense of actualizing the affordance of increased agility and ambidexterity) creates tensions and paradoxes on an organizational (e.g., resource conflicts) and individual level (e.g., emotional tensions). Additionally, the article shows how intertwined paradoxes, tensions, and management approaches are across levels, highlighting the complexity of DT and its outcomes. In the third article, I investigate outcomes on an individual level of digital channels in a customer context. Robo-advisors as a novel digital technology can allow for automated and digital wealth management for new customer segments. The article shows that, as opposed to analogue channels, digital properties of robo-advisors enable dynamic recommendations (similarly to well-known dynamic pricing in e-commerce). These recommendations can improve the economic decision-making of individual customers and are also to the benefit of the financial provider. Moreover, anthropomorphism (i.e., human-like representation of the robo-advisor) allow a social atmosphere which further increases the effects on customers. The last article studies outcomes on an individual level of digital channels, specifically chatbots, in an employee context. With chatbots being used more and more within companies (e.g., for IT helpdesk self-services), effectiveness of the interactions remains questionable and outcomes for employees unclear. In an experiment focusing on the attribution of gender-typical design cues to a chatbot, which we often see in today’s applications, users applied stereotypical prejudices to chatbots, even though they were thoroughly briefed on how the artificial intelligence was trained and that it didn’t have a gender. These prejudices then affected trust levels towards the chatbot, influencing the effectiveness of the interaction. Overall, this thesis provides new perspectives on the outcomes of changes in value creation paths during the DT of established companies. Going beyond mostly organizational-level longer-term outcomes, the studies comprised in this thesis offer a more detailed and nuanced understanding of the outcomes of DT, on an individual and organizational level, along the main changes in value creation in DT. By uncovering rather negative outcomes, the studies also help understanding why DT potentially fail. Finally, the results contribute to different theories in IS by extending (e.g., social presence theory) or challenging them (e.g., structural ambidexterity). Apart from these research contributions, this thesis also offers important insights for practitioners managing the DT of their companies.