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Exploring Capabilities for Digital Transformation in the Business Context: Insight from a Systematic Literature Review

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  • Afrin Fauzya Rizana

    (Department of Industrial Engineering, Bandung Institute of Technology, Bandung 40132, Indonesia
    Department of Industrial Engineering, Telkom University, Bandung 40257, Indonesia)

  • Iwan Inrawan Wiratmadja

    (Department of Industrial Engineering, Bandung Institute of Technology, Bandung 40132, Indonesia)

  • Muhammad Akbar

    (Department of Industrial Engineering, Bandung Institute of Technology, Bandung 40132, Indonesia)

Abstract

Digital transformation is considered a high-risk investment due to the fact that as much as 80% of its initiatives fail. To effectively manage and execute digital transformation, organizations must establish capabilities tailored to this process. Thus, this study aims to identify capabilities essential for digital transformation in the business context. A systematic literature review (SLR) was conducted following the PRISMA. An initial search across major academic databases yielded 542 articles. After applying inclusion and exclusion criteria, 43 relevant articles were selected for in-depth analysis. Descriptive, co-occurrence, and qualitative analyses were then applied. The findings reveal five core dimensions of digital transformation capability: digital dynamic capability, digital leadership capability, employee digital capability, digital technology and operational capability, and digital investment capability. These capabilities demonstrate that successful digital transformation depends not only on technology, but also on leadership, human capital, strategy, and investment that ensure resource readiness. This study contributes to digital transformation theory by identifying essential organizational capabilities and provides insights into how organizations can develop these capabilities to achieve successful digital transformation.

Suggested Citation

  • Afrin Fauzya Rizana & Iwan Inrawan Wiratmadja & Muhammad Akbar, 2025. "Exploring Capabilities for Digital Transformation in the Business Context: Insight from a Systematic Literature Review," Sustainability, MDPI, vol. 17(9), pages 1-29, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:9:p:4222-:d:1650661
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    References listed on IDEAS

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    1. Nurul S. Samsuden & Umar H. A. Kohar & Saleh F. A. Khatib & Alhamzah F. Abbas, 2024. "Digital Capabilities and Business Performance: A Systematic Literature Review," Sustainability, MDPI, vol. 16(24), pages 1-23, December.
    2. Forliano, Canio & Bullini Orlandi, Ludovico & Zardini, Alessandro & Rossignoli, Cecilia, 2023. "Technological orientation and organizational resilience to Covid-19: The mediating role of strategy's digital maturity," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    3. Nizar Abdulwahab Ali Al-Moaid & Senan Ghaleb Almarhdi, 2024. "Developing dynamic capabilities for successful digital transformation projects: the mediating role of change management," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-26, December.
    4. Jiatong Yu & Jiajue Wang & Taesoo Moon, 2022. "Influence of Digital Transformation Capability on Operational Performance," Sustainability, MDPI, vol. 14(13), pages 1-20, June.
    5. Weilin Wu & Jing Song & Lei Lu & Hongxia Guo, 2024. "Is managerial ability a catalyst for driving digital transformation in enterprises? An empirical analysis from internal and external pressure perspectives," PLOS ONE, Public Library of Science, vol. 19(2), pages 1-30, February.
    6. Ghosh, Swapan & Hughes, Mat & Hodgkinson, Ian & Hughes, Paul, 2022. "Digital transformation of industrial businesses: A dynamic capability approach," Technovation, Elsevier, vol. 113(C).
    7. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    8. Blanka, Christine & Krumay, Barbara & Rueckel, David, 2022. "The interplay of digital transformation and employee competency: A design science approach," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    9. Lei Shen & Xi Zhang & Hongda Liu, 2022. "Digital technology adoption, digital dynamic capability, and digital transformation performance of textile industry: Moderating role of digital innovation orientation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2038-2054, September.
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