The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1463-7154.htm

BPMJ
29,2 Information technology investment
and digital transformation:
the roles of digital transformation
528 strategy and top management
Received 2 June 2022 Xin Zhang, Yao Yu Xu and Liang Ma
Revised 13 September 2022
29 November 2022 Shandong University of Finance and Economics, Jinan, China
Accepted 6 January 2023
Abstract
Purpose – In the context of the digital economy, information technology (IT) investment has become a
necessary way for enterprises to transform digitally. However, why and how IT investment can enhance digital
transformation is lacking in the literature. Based on the resource-based view (RBV), this study explored the
impact mechanism of IT infrastructure on the digital transformation of enterprises from the perspective of
the digital transformation strategy. Further, this study examined the moderating role of top management on
the relationships between IT infrastructure and digital transformation strategy and between digital
transformation strategy and enterprise’s digital transformation.
Design/methodology/approach – Through a questionnaire survey of Chinese enterprises, 180 sample data
were collected, and the partial least squares-structural equation modeling (PLS-SEM) method was used to test
the hypothesis.
Findings – Digital transformation strategy fully mediates the relationship between IT infrastructure and
enterprise digital transformation. Furthermore, top management has a significant positive moderating effect
on the relationship between IT infrastructure and digital transformation strategy, as well as the relationship
between digital transformation strategy and digital transformation.
Originality/value – This study explores the moderating role of top management in the relationship between
IT and enterprise performance, as well as the mediating role of digital transformation strategy in the
relationship between IT infrastructure investment and digital transformation performance. As a result, the
study adds significantly to the body of knowledge on IT business value, digital transformation and strategic
management. The authors’ findings can help update managers’ perceptions of IT value and provide theoretical
guidance on deriving digital transformation performance from IT infrastructure investments.
Keywords IT infrastructures, Digital transformation strategy, Top management, Digital transformation
Paper type Research paper

1. Introduction
Currently, the new generation of information technology (IT) represented by artificial
intelligence, block-chain, cloud computing, big data and the internet of Things is driving the
rise of the digital economy and bringing disruptive changes to the organizational structure,
business process and business model of enterprises (Vial, 2019). IT has become a critical
factor in promoting the digital transformation of enterprises. Thus, enterprises view
investments in IT as a way to gain a competitive advantage in the fierce and dynamic market
competition environment. Companies in almost all industries are making some moves to
explore new IT and take advantage of its benefits. According to Gartner’s latest forecast, IT
spending by global enterprises is expected to reach US$4.1 trillion in 2021, an increase of
8.4% over 2020. It is expected that as enterprises’ digital transformation work continues to
accelerate, their IT expenditures will continue to grow. However, studies show that only 20%
of business digital transformation initiatives succeed and significant company IT
expenditures have not had the desired digital impact. The mismatch between IT input and
Business Process Management
Journal
Vol. 29 No. 2, 2023
pp. 528-549 This work was supported by Youth Foundation of Social Science and Humanity, China Ministry of
© Emerald Publishing Limited Education [grant number 21YJC630098]; Key Projects of the National Social Science Foundation of China
1463-7154
DOI 10.1108/BPMJ-06-2022-0254 [grant number 21AZD022].
transformation output has once again aroused a new discussion on IT value creation in the IT investment
context of digital transformation in academia and industry. and digital
Existing research on the business value of IT mainly explores the impact of IT on
organizational performance. Previous studies have shown that IT may indeed help improve
transformation
organizational performance. A consensus has emerged that IT, as a simple hardware and
software tool, cannot alone or directly generate value or improve company performance but
complement other information systems and organizational factors and function synergistically
(Wang et al., 2015; Peng et al., 2016). For example, Wade and Hulland (2004) pointed out that 529
information systems affect corporate performance by complementing other enterprise assets or
capabilities. Mithas et al. (2013) further argue that the impact of IT capabilities on enterprise
performance is realized by supporting higher-order business capabilities. Similarly, Wang et al.
(2015) found that IT assets could not directly and independently affect business performance
but through interaction with IT management. Peng et al. (2016) pointed out that IT capability
can improve enterprise performance by integrating with enterprise business process
management capability and supply chain management capability. However, the existing
literature has not reached a consensus on how to give full play to the potential value of IT and
effectively enable the digital transformation of enterprises. It is still unclear which precise
mechanisms IT uses to influence the results of enterprise transformation.
Digital transformation can be considered the strategic response to digital technology
trends and disruptions (Vial, 2019), encompassing profound changes in society and industry
caused by the application of digital technology (Agarwal et al., 2010). It’s a complex journey
that needs to be guided by a clear digital transformation strategy. The latest view holds that it
is strategy that drives digital transformation, not technology (Li et al., 2018). Digitalization has
wholly changed traditional strategic rules and redefined competitive advantage and its
realization strategy. Indeed, digital transformation must consider how advances in digital
technology can bring changes to the organizational business model, structure and processes
(Hess et al., 2016), it includes the impact of emerging information technologies on the digital
transformation strategy of enterprises. Therefore, the core issue of enterprise digital
transformation is how to formulate and implement digital transformation strategy (Chanias
et al., 2019). Existing research suggests that organizations need to develop a digital
transformation strategy to find innovative applications of technology, manage the changes
triggered by technology and coordinate the implementation of the entire digital transformation
(Hess et al., 2016). Therefore, some studies believe that digital transformation strategy and
organizational change have become a new path of IT-driven digital transformation (Svahn
et al., 2017). However, despite these understandings, the specific role of digital transformation
strategy in the relationship between IT and digital transformation is still unclear and its
relative degree and micro-mechanism have not been tested.
Digital transformation strategy focuses on the changes in products, processes and
organizations owing to new technologies (Matt et al., 2015). In a dynamic environment, a
digital transformation strategy can guide the integration and use of digital technologies to
achieve digital transformation. Research shows that digital transformation strategy
positively affects firm performance, mediating between digital technology usage and firm
performance (Tsou and Chen, 2021). Digital strategy can improve the digitization level of
enterprises through digital capabilities (Proksch et al., 2021). Furthermore, organizational
outcomes are predicted by management characteristics (Lim et al., 2011b). Existing studies
have shown that top management support and digital leadership enhance the ability to utilize
outstanding IT capabilities, promote successful strategic changes and improve business
performance (Li et al., 2018). Additionally, the design and implementation of a digital
transformation strategy often involve top managers (such as a digital committee and Chief
Digital/Information Officers (CDOs/CIOs) who lead and initiate transformation efforts
(Haffke et al., 2016). To lessen or avoid risks from incorrect identification and deployment of
BPMJ processes and resources, top managers must make the appropriate strategic decisions about
29,2 the digital transformation of their organizations (Chae et al., 2018). This study argues that
digital strategies present an opportunity for companies to explore new ways to create value
from IT. IT infrastructure facilitates digital transformation by responding to and supporting
selected business strategies. Moreover, top management is complementary to IT
infrastructure and digital transformation strategy.
In summary, this study takes digital transformation strategy and top management as the
530 crucial mechanism of IT business value formation in the context of digital transformation.
Theoretically, IT infrastructure influences enterprise transformation outcomes by
responding to and supporting digital transformation strategies. Top management can
strengthen the relationship between IT infrastructure, digital transformation strategy and
transformation outcomes. Therefore, this study examines both the mediating effect of digital
transformation strategy and the potential moderating role of top management, thereby
answering the current research needs on the role of digital transformation strategy and the
use of new-generation IT in the context of enterprise transformation and upgrading.
This study has specific theoretical and practical contributions. First, this paper provides a
new interpretation of how IT infrastructure can empower an enterprise’s digital
transformation. By taking digital transformation strategy as an intermediary condition,
we enrich and expand the research on IT value creation. Secondly, this study constructs and
empirically tests a model of IT-driven digital transformation realization and takes IT
infrastructure, digital transformation strategy and top management as the antecedent
configuration of digital transformation, which enriches the research on digital
transformation. In terms of its practical value, this study concludes that businesses cannot
solely rely on IT to implement digital transformation. Instead, businesses must create a
digital transformation strategy to manage the complex transformation brought on by digital
technology and use an effective IT-strategy integration to boost transformation performance.
The study’s findings offer theoretical recommendations for businesses to achieve digital
transformation and a justification based on science for top management competency training
in businesses.

2. Theoretical background
2.1 Resource-based view of the firm
The resource-based view (RBV) posits that an enterprise’s unique resources and capabilities
are the sources of its lasting competitive advantages. In order to explain the sustainable
advantages and differences across organizations, it views an enterprise as a collection of
resources and focuses on those resources’ traits and strategic elements (Barney, 1991).
Resources refer to the assets, technologies, knowledge, capabilities and processes owned by
an enterprise. Moreover, RBV emphasizes that only valuable, rare, imperfectly imitable and
non-substitutable resources can be used as the basis for competitive advantage.
In information system literature, RBV is widely accepted as the leading theory to explain
how IT resources form business value (Barney et al., 2011; Shibin et al., 2020). Based on RBV,
existing studies have explored the impact of various IT resources on organizational
performance, such as IT infrastructure (Benitez et al., 2018), IT capabilities (Chae et al., 2018)
and management of IT investment (Ilmudeen and Bao, 2020) and considers that IT resources,
as a source of competitive advantage, can be used to improve internal communication,
increase production efficiency, reduce operating costs and increase financial performance
(Liang et al., 2010; Devaraj and Kohli, 2003). At the same time, other studies have limited the
argument that IT resources have a direct impact on firm performance (Peng et al., 2016) and
have proposed a complementary view based on RBV, which argues that IT resources do not
generate competitive advantage by themselves, but gain competitive advantage by
complementing other resources or capabilities (Ravichandran et al., 2005). Spanos and IT investment
Lioukas (2001) also proposed a composite model and analyzed three paths of the relative and digital
influence of firm-specific factors on performance. Among them, the RBV-based strategic
effect reflects the direct effects of strategy on performance and the firm asset effects reflect
transformation
the firm asset’s impact against the strategy. This path indicates that the firm resources can
enhance the firm’s ability to design competitive strategies and thus affect firm performance
(Rivard et al., 2006), which is precisely in line with our view. We believe that the
complementary role of digital transformation strategy as an intermediary structure between 531
IT resources and enterprise digital transformation may be an extension of the
aforementioned views. As a result, the complementary view based on RBV theory
provides an excellent theoretical foundation for us to explore the complementary role of IT
infrastructure and digital transformation strategy.

2.2 IT investment and organizational return

In the information systems research field, scholars have conducted some helpful research on
the organizational return on IT investment. The issues that must be considered in these
studies are the measurement of IT investment and firm performance and the mechanism of IT
investment on organizational performance (Lim et al., 2011a). (1) In IT investment
measurement, researchers often employ various alternative measures due to minimal
publicly available information on firm-specific IT investments. Through a review of previous
research, we identified several major IT investment concepts such as IT spending (IT
infrastructure, IT human resources) (Dalenogare et al., 2018; Karhade and Dong, 2020), IT
strategy and IT capabilities/management (Chae et al., 2018, Wiesb€ock et al., 2020). (2) The
measurement of firm performance brought by IT investment mainly includes financial
performance (Mithas and Rust, 2016; Sabherwal et al., 2019) and market performance, such as
product innovation performance (Benitez et al., 2018) and organizational agility
(Ravichandran, 2018). (3) In terms of the research on the relationship between IT
investment and organizational performance, a large number of research consensus is that
IT investment positively impacts on organizational performance, however it depends on
understanding how these investments affect performance and the contexts and conditions. IT
may not be able to create sustainable competitiveness on its own (Rai et al., 2006), but it is a
part of the business value creating process with other complementary resources and
organizational capabilities operating synergistically (Wade and Hulland, 2004). Therefore,
the complementary and mediating factors of IT value-creation processes have been
extensively discussed in this field. For example, Karimi et al. (2007) argue that the synergistic
effect of integrating IT with various complementary resources has a positive impact on
enterprise performance. Rai et al. (2006) pointed out that IT resources can affect firm
performance by enhancing critical organizational capabilities. Other studies have also
proposed that factors such as IT strategy, business strategy, or strategic fitness can enhance
firm performance (Ilmudeen and Bao, 2020; Queiroz et al., 2020). Table 1 summarizes some
studies on the relationship between IT resources and firm-related value.
Our review of previous literature shows that, despite significant progress in the business
value of IT literature, there are still two opportunities for contribution. First, enterprise digital
transformation is still a new phenomenon and our knowledge of how IT investment adds value
in this context is still limited. The strategic role of digital transformation strategy is not yet clear
and the causal relationship between IT, digital transformation strategy and digital
transformation outcomes is still challenging to grasp. Therefore, it is necessary to study its
micro-mechanisms to increase our knowledge of mediating factors in the IT value-creation
process and understand how IT creates differential transformation performance.
Second, existing research has not focused enough on the business value of IT infrastructure.
BPMJ Independent
29,2 Study variable Mediators Dependent variable

Chen et al. (2015) IT capabilities Corporate entrepreneurship Product innovation

performance
Ahuja and Chan (2016) IT resource Dynamic capability (agility) Innovation/Improvisation
IT leveraging
532 Mithas and Rust (2016) IT investment IT strategy (moderator) Firm performance
Nwankpa and IT capabilities Digital transformation Innovation
Roumani (2016)
Nwankpa and Datta IT capability Digital business intensity Organizational performance
(2017)
Benitez et al. (2018) IT infrastructure Knowledge ambidexterity Innovation performance
Ravichandran (2018) IT competence innovation capacity Organizational agility
(moderator)
Chae et al. (2018) IT capability Industry categories Firm performance
(moderator)
Sabherwal et al. (2019) IT investment strategic IT alignment Firm performance
(moderator)
Wiesb€ock et al. (2020) IT capabilities Digital product innovation Digital product innovation
capabilities performance
Karhade and Dong IT investment – Commercialized innovation
Table 1. (2020) performance
IT business value- Ilmudeen and Bao Managing IT IT strategy and business Firm performance
related research (2020) strategy

According to statistics, enterprise IT infrastructure investment accounts for more than 50% of
the total IT expenditures, which provides the basis for sharing IT services inside and outside the
organization (Aral and Weill, 2007), and is a crucial enabler of business performance (Benitez
et al., 2018; Karhade and Dong, 2020). Some scholars even proposed to take infrastructure
research as the core of future information system research (Tilson et al., 2010). Therefore, this
study focuses on the value creation of IT infrastructure in the digital environment, which has
certain practical significance.

2.3 Digital transformation strategy

Digital technology has a transformative impact on almost all aspects of enterprises’ internal
operations and external environment and this digital disruption requires the coordination
and adjustment of many corporate strategies (Vial, 2019). In this regard, researchers advocate
the integration of IT business strategy. For example, Bharadwaj et al. (2013) argue that digital
technologies need to integrate organizational and information system strategies and propose
the concept of digital business strategy. Matt et al. (2015) further focused on the
transformation of processes, products and organizations brought about by new
technologies and proposed the concept of the digital transformation strategy, arguing that
in a dynamic environment, digital transformation strategy can guide the integration and
application of digital technologies, to achieve digital transformation (Hess et al., 2016).
Therefore, the formulating and implementing a clear and scientific digital transformation
strategy becomes a critical path for the digital transformation practice of enterprises.
Currently, digital transformation strategy research mainly involves connotation and
dimensions, dynamics and impact results. For example, Matt et al. (2015) proposed that
digital transformation strategy refers to supporting the strategic transformation of
enterprises brought about by the application of digital technology and the strategic
positioning of the operation and development of enterprises during or after transformation
and divided it into four dimensions: technology use, value creation, structural change and IT investment
financial gain. Hess et al. (2016) refined these four dimensions into 11 items and verified and and digital
adjusted them through case interviews. Sebastian et al. (2017) proposed two digital
transformation strategies, customer engagement and digital solution strategies, from the
transformation
perspective of digital technology investment. Tekic and Koroteev (2019) proposed four
general digital transformation strategies from the dimensions of digital technology
application and digital operation business model, namely disruptive strategy, business
model-led strategy, technology-led strategy and customized simulation strategy. Several 533
studies focus on the dynamics of digital transformation strategy and explore the process of
developing and implementing digital transformation strategies. For example, Hess et al.
(2016) identified a series of strategic questions and possible answers that managers must
consider based on the successful experience of three case companies to provide guidelines for
formulating a digital transformation strategy. Chanias et al. (2019) constructed an integrated
model of digital transformation strategy development and execution, noting that digital
transformation strategy integrates information system strategy and business strategy, is a
highly dynamic adjustment and change process and includes a series of crucial decision-
making activities. In addition, some scholars have begun to use empirical research methods to
explore the impact results of the digital transformation strategy. For example, Wang et al.
(2020) used data from a sample of 182 Chinese firms to discuss the micro-mechanism by
which digital transformation strategies improve digital transformation’s long-term and
short-term performance. These studies provide new perspectives for exploring digital
transformation strategy and digital transformation. However, there are no relevant empirical
studies on the impact of IT on the formulation and implementation of the digital
transformation strategy and the assertion that strategy and IT work together to build
competitive advantage to achieve digital transformation, which is the meaning of our
research.

2.4 Top management

The impact of top management has always been an important research issue in the field of
enterprise strategic management and information systems. Existing research shows that top
management support, engagement, commitment and leadership are the critical factors in IT
value creation for three main reasons: (1) top managers with a broader perspective are better
able to identify the business opportunities to utilize IT in business processes and provide
management guidance for planning, designing, developing and implementing activities
(Liang et al., 2007), thus enhancing the effectiveness of the IT management process; (2) top
managers with high levels of management commitment and participation can assume
significant ownership and are willing to take risks (Woldesenbet et al., 2012), to ensure
sufficient human, material and financial input in the IT implementation process (Hu et al.,
2012) and (3) top management facilitates the development of process capabilities by
participating in executive steering committees and building partnerships across and within
companies (Cragg et al., 2013), resolving conflicts and keeping projects on track. An extensive
literature base provides theoretical support for the critical role of top management in
achieving IT performance.
Recent studies have begun to link top management to the outcomes of innovation or
change processes (Christensen et al., 2016; Oreg et al., 2018). As the maker of corporate
strategy, top managers directly influence corporate innovation by deciding the innovation
strategy (Talke et al., 2011) and resource commitment (Wrede and Dauth, 2020). Digital
transformation can be seen as a process outcome based on change and innovation. Therefore,
existing research has started to focus on the role of top management, such as manager
engagement, agile transformation management and leadership, in digital transformation
BPMJ (Osmundsen et al., 2018). For example, Weber et al. (2017) explain the role of the highly
29,2 authorized team by identifying the human resource capabilities needed to achieve successful
digital transformation. Artemenko (2020) explains the role of top management in enterprises
digital transformation. These studies provide an initial reference for in-depth investigations
into the role of top management in IT value creation, strategy formulation and
implementation and enterprise digital transformation.
534
3. Research model and hypotheses
This study, which is based on the IT business value paradigm and RBV theory, proposes an
IT-driven digital transformation model with a digital transformation strategy as the mediator
and top management as the boundary condition in order to clarify the value creation
mechanism of IT investment in the context of enterprise digital transformation, as shown in
Figure 1.

3.1 IT and digital transformation strategy

According to RBV, resources are the basic unit of analysis, while the capabilities are the
ability of resources to perform a task or activity together (Makadok, 2001). A firm with
valuable IT resources may be able to leverage these resources to build their capabilities
(Liang et al., 2010). An enterprise digital transformation strategy can be viewed as a
capability that reflects the ability to leverage digital technologies in the business (Matt et al.,
2015). Therefore, we propose that IT infrastructure is relevant to digital transformation
strategy.
Digital transformation is the strategic response of an organization to the disruptive
changes brought by digital technologies (Vial, 2019). As technology continues to penetrate
organizations, their innovation and change processes need to be orchestrated by a strategy
that facilitates IT investments to deliver value along a performance dimension aligned with
transformation goals. Digital transformation strategy focuses on the changes in
organizations, products and processes brought about by new technologies and guides the
integration and adoption of digital technologies to achieve the desired digital transformation
goals (Matt et al., 2015). Thus, digital transformation strategy provides insights on how to
leverage new technologies to empower the digital transformation of enterprises.
Moreover, the application of new technologies changes organizational practices and
organizational structures, facilitates product and business model innovation and becomes a
core driver of strategic change and innovation in the firm (Nambisan et al., 2017) while also
providing technical support for its effective implementation (Vial, 2019). Research has shown

Top
Top Management
Management
H4a H4b

Digital
Digital Digital
Digital
IT
IT Infrastructure
Infr
f astru
r ctu
t re H1 Transformation
Transfo
f rmation H2
Transformation
Transfo
f rmation
Strategy
Strategy

H3 H3
Figure 1. Direct/moderated effects
Research model Control
Control Variables:
a les: Firm
Variab Firm size;
size; Industry;
Indu r ; Firm
d stry Firm age
age Mediated effects
that digital technology changes enterprises’ original resource base characteristics in four IT investment
ways: form, nature, value and structure through standardization, process, data and and digital
interconnectedness of resources, thus driving strategic change. The more technological
resources a company has, the greater its ability to develop utility-creating strategies (Spanos
transformation
and Lioukas, 2001) and the more conducive it is to develop a digital transformation strategy
(Tsou and Chen, 2021). This study suggests that IT infrastructure is the antecedent of an
enterprise’s digital transformation strategy. Firms with higher levels of IT infrastructure
have a more remarkable ability to design and implement digital transformation strategies. 535
Therefore, we propose the following hypotheses.
H1. IT infrastructure has a positive effect on digital transformation strategy.

3.2 Digital transformation strategy and digital transformation

Digital transformation is a process of disrupting the established ways of value creation and
seeking innovation and change (Nambisan et al., 2019). This complex systemic engineering
requires a digital transformation strategy to coordinate, organize and guide the
implementation of all related activities to achieve the desired digital transformation goals
(Matt et al., 2015). Moreover, the RBV emphasizes the critical role of organizational
capabilities in the process of gaining competitive advantage for the firm (Eisenhardt and
Martin, 2000; Sabherwal et al., 2019). The digital transformation strategy reflects a capability
that is considered to help leverage the IT infrastructure to improve the competitive advantage
of the firm and, therefore, can facilitate the digital transformation.
Many studies regard digital transformation strategy as a crucial antecedent condition for
digital transformation (Bharadwaj et al., 2013), emphasizing that enterprise leaders should do
top-level design, create new value propositions by combining digital technology capabilities
with existing resources and stuff and realize digital transformation (Sebastian et al., 2017). A
digital transformation strategy can support enterprise’s digital transformation by focusing
on the innovation and change brought about by technology and coordinating all
organizational resources and capabilities (Leischnig et al., 2017). An organization with
good digital transformation practices shows a clear and well-defined digital transformation
strategy (Kane et al., 2015). Conversely, companies lacking a digital transformation strategy
show poor and ineffective decision-making and resource utilization (Hess et al., 2016).
Meanwhile, Wang et al. (2020) also verified the positive impact of digital transformation
strategy on firm performance using a large sample of data. Successful digital transformation
initiatives can lead to sustained performance and competitive advantage (Kane et al., 2017;
Vial, 2019; Dalenogare et al., 2018). Thus, we have substantial evidence that.
H2. Digital transformation strategy has a positive influence on digital transformation.

3.3 Digital transformation strategy as mediators

Based on RBV, a firm’s competitive advantage is primarily driven by its valuable, rare,
unique and irreplaceable resources (Barney, 1991). IT infrastructure, as a replicable resource,
does not create sustained firm performance by itself (Rai et al., 2006), but has an indirect
impact through resource complementarities or organizational capabilities (Wade and
Hulland, 2004). In other words, the impact of IT on enterprise-level outcomes (e.g. firm
performance) needs to consider the complementary effects of other organizational resources
or capabilities as intermediaries (Chen et al., 2015; Nwankpa and Datta, 2017; Ravichandran,
2018). The H1 and H2 combine to form the mediating role of digital transformation strategies.
Companies with an IT edge are more motivated and capable of accomplishing their digital-
oriented innovation efforts. Because, previous studies have shown that firm performance is
the product of effects involving firm assets (including IT resources) and strategy (Spanos and
BPMJ Lioukas, 2001). The more resources a firm has, the greater its ability to develop a utility-
29,2 creating strategy, which provides sufficient conditions for performance sustainability
(Spanos and Lioukas, 2001; Rivard et al., 2006). Digital technology and digital transformation
strategy constitute the key elements of enterprise digital transformation. The application of
new technologies can promote the ability of digital transformation of enterprises, which in
turn affects their innovation activities and performance (Tsou and Chen, 2021). Therefore,
this study argues that IT infrastructure resources and capabilities are influencing digital
536 transformation through digital transformation strategies and proposes the following
hypothesis.
H3. Digital transformation strategy mediates the relationship between IT infrastructure
and digital transformation.

3.4 The moderator role of top management

Many researchers have studied the vital role of top management practices in the success of
information systems. The involvement of top management seems to have led to effective
information system (IS) planning (Sohal and Fitzpatrick, 2002). The top management’s
commitment to IT-related programs improves IT success by providing IT resources, support
and guidance on IS functions. This commitment also helps to integrate IT with business
strategies and processes and to ensure the continuity of IT investments (Wade and Hulland,
2004). Mao et al. (2016) pointed out that if IT investment is properly managed, IT creates
favorable conditions for the alignment of IT resources and enterprise strategy. As strategic
executors, top managers supports its performance by coordinating the activities of different
business units, synchronizing IT and business units, simplifying operational processes,
reducing production costs, checking IT priorities frequently and allocating IT assets in a
timely manner (Wang et al., 2015).
The resource complementary of RBV argues that the integration of different
complementary resources can create synergies that lead to better results (Wade and
Hulland, 2004; Melville et al., 2004; Karimi et al., 2007). Top management as a complementary
resource can guide IT value creation and digital transformation strategy implementation,
leading to better digital transformation performance. Digital transformation is a complex
social project and the support of the top management is essential in the process of
transformation. On the one hand, top management practices help IT evolve in a direction
aligned with strategic objectives, thereby enhancing the ability of IT to support digital
transformation strategies. Managers must have a clear vision of the company’s future digital
development, be knowledgeable about current digital tools and their applications and foster a
culture that supports the enterprise’s digital transformation in order to make the right
decisions in the digital environment (Ukko et al., 2019).
On the other hand, top management practices can affect the strategic orientation of digital
transformation and provide the necessary resources and capability to support the effective
implementation of the digital transformation strategy, thus enhancing the possibility of
digital transformation realization. Research shows that the implementation of a digital
transformation strategy may encounter resistance from different areas of the company,
requiring top management with the ability to mobilize the active participation of different
stakeholders (Matt et al., 2015). Furthermore, the implementation of a digital transformation
strategy is a highly dynamic process that requires continuous iterations between learning
and practice (Chanias et al., 2019), which involves the participation of top management,
leading and initiating transformation efforts (Haffke et al., 2016) and may lead to different
performance outcomes. Therefore, we assume that the value-adding properties of IT
infrastructure and digital transformation strategy are amplified when it is complemented by
top management. The specific assumptions are as follows.
 H4a. Top management positively moderates the relationship between IT infrastructure IT investment
and digital transformation strategy. and digital
H4b. Top management positively moderates the relationship between digital transformation
transformation strategy and digital transformation.

4. Research method and data analyses

537
4.1 Measurement and data collection
All constructs in this study were measured using the maturity scale in existing studies and they
were slightly modified to fit the context. IT infrastructure is measured using a four-item scale
proposed by Lu and Ramamurthy (2011), which is mainly used to evaluate the level of IT assets
and capabilities such as enterprise network communication services, data architecture, software
and hardware platforms and facility operations, as well as intra- and cross-company
communication and systems integration capabilities; The measurement items of digital
transformation strategy is adapted from the research of Li et al. (2021) and Gurbaxani and
Dunkle (2019), which mainly evaluate the maturity and implementation of enterprises digital
transformation strategies; Top management mainly refers to the support and capability of the
top management team for IT-driven digital transformation, its scale adopts the measurement of
top management support and commitment by Wang et al. (2019) and the measurement of
leadership by Mihardjo et al. (2019). The items of digital transformation are selected from the
studies of Nwankpa and Roumani (2016) and Aral and Weill (2007), mainly contains three items,
in which respondents were asked to evaluate the integration of digital technology in enterprises
and the results of using digital technology to carry out business innovation and change. All
questions in the questionnaire were answered on a Likert 7-point scale, ranging from
“1- strongly disagree” to “7- strongly agree.” In addition, firm size, firm age and industry were
used as control variables to explain the variance of dependent variables.
In this study, small and medium-sized enterprises (SMEs) in various industries in China were
selected as survey objects and questionnaires were distributed through a random sampling
method. Data were collected from managers as they relate to IT-driven transformation strategies
and the digital transformation outcomes of the enterprise. The questionnaires were distributed
online and accurately delivered to the middle and senior management through a professional
questionnaire service platform (www.wjx.cn). This platform has been used by many researchers
and has good quality assurance (Zhang et al., 2019). A total of 342 questionnaires were collected
in this survey and then 162 invalid questionnaires with incomplete records, the same answers
for all items and missing responses were excluded. Finally, 180 valid questionnaires were
retained and used, with an effective response rate of 52.63%.
The firm characteristics of the recovered samples are shown in Table 2. The sample data
comes from different industries, of which manufacturing (30%) and IT service industry
(38.8%) are the central bodies. Regarding the years of establishment, 55% of the firms have
been established for more than ten years, followed by those established for 6–10 years,
accounting for 31.6% and 12.7% established for 3–5 years. Regarding size, 70% of the firms
had more than 100 employees during the study period and 71.1% had more than 10 million in
annual revenue. The sample characteristics are basically in line with the situation of
Chinese firms.

4.2 Measurement model

This study used structural equation modeling (SEM) to test the research hypothesis. The
partial least squares SEM (PLS-SEM) was chosen because it can handle complex models, has
good parameter estimation efficiency and provides increased statistical power without
BPMJ Size/ Size/
29,2 Measure Items Percentage Measure Items Percentage

Industry Agriculture, Forestry, Animal 5, 2.7% Firm scale 21–50 18, 10%
Husbandry and Fishery (people)
Industry and Construction 54, 30% 51–100 33, 18.3%
Wholesale and Retail Trade 13, 7.2% 101–300 62, 34.5%
538 Accommodation and Catering 7, 3.8% 301–1,000 49, 27.2%
Industry
Transportation, Storage and 12, 6.6% More than 15, 8.3%
Post 1,000
Information Transmission, 70, 38.8% Annual Less than 1 3, 1.7%
Software and Information revenue
Technology Services (million)
Others 19, 10.5% 1–5 15, 8.3%
Firm age Less than 3 1, 0.5% 5–10 34, 18.9%
(year) 3–5 23, 12.7% 10–50 52, 28.9%
6–10 57, 31.6% 50–100 28, 15.5%
Table 2. More than 10 99, 55% 100–500 30,16.7%
Sample demographic Firm scale 20 and below 3, 1.7% More than 18, 10%
information (people) 500

needing a large number of samples or regularly distributed multivariate data (Shiau

et al., 2019).
We used Smart PLS 3.0 software to analyze the sample data and tested their reliability,
convergence and discriminant validity. First, Cronbach’s alpha (Cα), composite reliability
(CR) and average variance extracted (AVE) were used to test the reliability. Table 3
demonstrate that the Cα values in this study range from 0.707 to 0.823 and the CR values
range from 0.837 to 0.885, all exceeding the general threshold of 0.7. The AVE values are also
above the suggested threshold of 0.5, demonstrating that the indicators in this study have a
high degree of reliability. Secondly, the convergent validity and discriminant validity were
examined by the factor loading and the square root of AVE. The results show that all the
factor loadings of measures are more significant than 0.7, at a significance level of p < 0.01
(Table 4), showing good convergent validity. The square root of AVE for each factor (the
bolded values in Table 3) is greater than the correlation coefficient with other factors,
indicating good discriminant validity.
In addition, to ensure that the data set was not subject to common method bias, Harman’s
single factor was inspected with four constructs (ITI, DTS, TM and DT) and all scale items.
The test results show that the highest covariance explained by single factor was 32.769%,
which is less than the cut-off value of 50% and no single factor was able to emerge.

Cronbach’s
Items Alpha CR AVE DTS DT ITI TM

DTS 0.823 0.876 0.587 0.766

DT 0.707 0.837 0.631 0.688 0.795
Table 3. ITI 0.767 0.851 0.590 0.646 0.462 0.768
Descriptive statistics TM 0.804 0.885 0.719 0.621 0.648 0.434 0.848
and inter-construct Note(s): Digital transformation strategy (DTS); digital transformation (DT); IT infrastructure (ITI); top
correlations management (TM)
 DTS DT ITI TM
IT investment
and digital
DTS1 0.824 transformation
DTS2 0.710
DTS3 0.786
DTS4 0.775
DTS5 0.737
DT1 0.828 539
DT2 0.737
DT3 0.815
ITI1 0.837
ITI2 0.712
ITI3 0.759
ITI4 0.770
TM1 0.835
TM2 0.842 Table 4.
TM3 0.866 Cross loadings

Besides, common method bias can be assessed by examining the statistical significance of
factor loadings of the method factor and comparing the variances of each observed indicator
explained by its substantive construct and the method factor. The method factor loadings are
insignificant and the indicators’ substantive variances are substantially more significant
than their method variances in this study. Thus, common method bias is not a serious
concern.
Finally, we evaluated the goodness of model fit for the saturate model by examining the
standardized root mean squared residual (SRMR), unweighted least squares discrepancy
(dULS) and geodesic discrepancy (dG) (Henseler et al., 2016). Generally speaking, a model is
considered to have a good fit if the value of SRMR is below 0.08 and the values associated with
the dG and dULS criteria are below 0.95 (Henseler et al., 2016). After testing, the SRMR value
of the proposed model was 0.075, lower than the threshold of 0.08 and the dULS value was
0.678, the dG value was 0.262, all of which are lower than 95% quantiles of the bootstrap
difference. Thus, it was demonstrated that the proposed model showed a good structural
model fit between the model and the data (Benitez et al., 2018).

4.3 Structural model and hypothesis testing

In this study, the consistent PLSs estimation method and PLSs bootstrapping (N 5 5,000)
were used to estimate the coefficients and significance of each path. The test results are
shown in Figure 2. IT infrastructure can significantly and positively influence digital
transformation strategy (β 5 0.288, t 5 3.891, p < 0.001), thus H1 is valid, which shows that
when providing more incredible IT infrastructure support can enhance the ability of
enterprises to develop and implement a more complex and competitive digital strategy. It also
demonstrates the importance of strengthening or developing IT infrastructure capabilities in
response to changes in strategic posture. A very significant path coefficient (β 5 0.465,
t 5 6.591, p < 0.001) confirms the positive impact of digital strategy on digital transformation

Digital
Digital Digital
Digital Figure 2.
IT
IT infrastructure
infr
f astru
r ctu
t re 0.647*** transformation
transfo
f rmation 0.688***
Transformation
Transfo
f rmation Results of structure
strategy
strategy
model analysis
Note(s): *p < 0.05; **p < 0.01; ***p < 0.001
BPMJ performance, so H2 is supported, which confirms from the extensive sample practice that the
29,2 success of enterprise digital transformation needs a digital transformation strategy to
promote.

4.4 Mediation analysis

This study uses the generally accepted bootstrap method to examine the mediating effect of
540 digital transformation strategy between IT infrastructure and digital transformation.
Specifically, we used the PROCESS SPSS macro developed by Hayes to analyze the data and
tested the mediating effect of the digital transformation strategy by the bias-corrected
method and the percentile method. The confidence level for the confidence intervals is 95%.
The test results are shown in Table 5. According to the mediating effect evaluation criteria
mentioned in the study of Prebensen and Xie (2017), this study concludes that the digital
transformation strategy plays a fully mediating role in the relationship between IT
infrastructure and digital transformation, thus supporting H3. In this study, the impact of IT
infrastructure on digital transformation is indirect. IT infrastructure can support the
capability of enterprise digital transformation strategy, which then influences the
performance of digital transformation.
The moderating effect of top management was tested using multilevel regression analysis
and the results are shown in Tables 6 and 7. Model 1 illustrates the impact of a single factor on
a digital transformation strategy, Model 2 the impact of a single factor and a moderating
factor, Model 3 the impact of a single factor, a moderating factor, and their interaction on a
digital transformation strategy. By focusing on the interaction effects, our results support
H4a (see Table 6) and H4b (see Table 7), proving top management’s positive moderating effect
in the relationship between IT infrastructure and digital transformation strategy and
between digital transformation strategy and digital transformation.

Coefficient Bias-coefficient Percentile Mediation

M/(IV)/(DV) Items Effect SE T 95% CI 95% CI existence

DTS/(ITI)/(DT) Direct effect 0.037 0.072 0.521 0.104 0.179 0.104 0.179 Full
Indirect 0.424 0.056 7.571 0.322 0.550 0.319 0.538
Table 5. effect
Results of mediating Note(s): Bootstrap 5,000 times, M: mediator; IV: independent variable; DV: dependent variable; digital
effects transformation strategy (DTS); IT infrastructure (ITI) and digital transformation (DT)

Model 1 Model 2 Model 3

Effect Variable β T value β T value β T value

Main effect IT infrastructure 0.645 11.269 0.444 6.667 0.541 7.725

top management 0.340 5.111 0.329 5.100
Table 6. Moderating IT infrastructure 0.206 3.556
Analysis of effect 3 top
moderating role of top
management in the management
relationship between Adjusted R2 0.413 0.486 0.517
IT infrastructure and R2 change 0.416 0.075 0.034
digital transformation F change 126.983*** 26.126*** 12.647***
strategy Note(s): ***p < 0.001; **p < 0.01; *p < 0.05
To more visually represent the moderating effect of top management, we made Figures 3 and 4, IT investment
where the dashed and solid lines represent the relationship between the horizontal and vertical and digital
axis variables under the conditions of high and low top management respectively. The
difference in slope shows the positive moderating effect of top management in the IT-driven
transformation
digital transformation process.
Overall, the results confirm all the hypothesized relationships among the constructs in the
theoretical framework. IT infrastructure positively contributes to digital transformation
strategy, which influences the digital transformation. Digital transformation strategy plays a 541
fully mediating role in the relationship between IT infrastructure and digital transformation. In
addition, top management can positively moderate the relationship between IT infrastructure

Model 1 Model 2 Model 3

Effect Variable β T value β T value β T value

Main effect digital transformation 0.683 12.489 0.460 7.159 0.473 7.477
strategy
top management 0.361 5.607 0.416 6.305
Moderating digital transformation 0.155 2.860 Table 7.
effect strategy 3 Analysis of
moderating role of top
top management
management in the
Adjusted R2 0.464 0.542 0.560 relationship between
R2 change 0.467 0.080 0.020 digital transformation
F change 155.976*** 31.442*** 8.178* strategy and digital
Note(s): ***p < 0.001; **p < 0.01; *p < 0.05 transformation

4
Digital strategy

Figure 3.
Low top The moderating effect
3 management of top management in
High top the relationship
management between IT
2
infrastructure and
digital transformation
1 strategy
Low IT infrastructure High IT infrastructure

5
Digital transformation

4 Low top Figure 4.

management The moderating effect
3 High top of top management in
management the relationship
2 between digital
transformation
strategy and digital
1 transformation
Low digital strategy High digital strategy
BPMJ and digital transformation strategy and between digital transformation strategy and digital
29,2 transformation. The results of hypothesis testing are summarized in Table 8.

5. Discussion and conclusion

This study aims to explore a new path for IT resources to empower the digital transformation
of enterprises by empirically testing the mediating role of digital transformation strategy and
542 the moderating role of top management. The findings enrich the insights on IT value creation
in the context of digital transformation and the path to achieve digital transformation in
enterprises.
In this study, the impact of IT infrastructure on an enterprise’s digital transformation is
indirect and the digital transformation strategy plays a fully mediating role in this process.
This result reaffirms that IT investment alone does not guarantee to improve the firm
performance and that business value can only be created when IT resources are integrated
with other capabilities (Dong and Yang, 2019; Peng et al., 2016). Focusing on digital
transformation strategic capabilities would be more valuable and meaningful. Our study
demonstrates that companies with an edge in their IT infrastructure can better integrate
digital resources to react to and support the choice and implementation of firm strategies,
allowing companies to reach a greater degree of digital strategic capabilities (Vial, 2019;
Isensee et al., 2020). They support organizational change and transformation and achieve
better digital transformation expectations (Leischnig et al., 2017). This result is entirely
consistent with some IT business value research. For example, several scholars have shown
that the impact of IT on firm-level outcomes needs to be combined with other organizational
resources and capabilities that act as intermediaries (Melville et al., 2004; Ravichandran, 2018;
Nwankpa and Datta, 2017) and that strategic capabilities, as a critical factor in the
innovational development of the firm, have a more significant impact on IT-driven firm
performance (Hao and Song, 2016).
Second, this study shows that IT infrastructure and digital transformation strategy are viable
path for enterprises to achieve digital transformation. On this path, IT infrastructure resources and
capabilities are necessary for enterprises to facilitate transformation through digital
transformation strategies. Digital technologies are widely embedded in organizational
operations, facilitating organizational change and innovation and providing the foundation for
formulating and implementing of digital transformation strategies. At the same time, the digital
transformation strategy can guide enterprise IT to create value aligned with the transformation
goals. The two complement each other to drive enterprise digital transformation (Tsou and Chen,
2021). Therefore, this study supports firms to increase their investment in new technologies and
apply digital technologies to change and innovate the value creation pathway that enterprises
previously relied on to maintain competitiveness (Vial, 2019). This study is a response to the
current calls for research related to digital transformation strategy. Some views suggest that firms
need to develop a digital transformation strategy to manage the complexity of digital technologies
and thus leverage the benefits of digital technologies for digital transformation (Matt et al., 2015;
Yeow et al., 2018). This study provides theoretical and practical evidence for these views.

Hypotheses Path Results

H1 IT infrastructure → Digital transformation strategy Supported

Table 8. H2 Digital transformation strategy → Digital transformation Supported
Summary of H3 IT infrastructure → Digital transformation strategy → Digital transformation Supported
hypothesis testing H4a Top management * IT infrastructure → Digital transformation strategy Supported
results H4b Top management * Digital transformation strategy → Digital transformation Supported
Third, top management serves as an essential boundary condition that can facilitate the IT investment
process of IT infrastructure, enabling digital transformation. Previous literature has shown and digital
that excellent management capabilities can facilitate successful strategic changes, such as
digital transformation, leading to improved firm performance (Li et al., 2018). Our results
transformation
support this view and prove that higher top management support, participation and
leadership can better tap the strategic value of IT investment and translate it into the
effectiveness of digital transformation. Digital transformation is a management issue that
requires acquiring and deploying technical resources and addressing management issues 543
such as redesigning business processes, investing in organizational capabilities and
implementing strategic responses (Besson and Rowe, 2012; Li et al., 2018). Therefore, a top
management team with the appropriate experience, knowledge and skills is more likely to
identify and seize opportunities and guide the successful implementation of digital
transformation (Ukko et al., 2019).

5.1 Implications for research

This study contributes to the research of information system and digital transformation.
First, this study extends IT business value-related research by exploring the value creation
path of IT infrastructure in digital transformation (Melville et al., 2004; Kohli and Grover,
2008). How firms build competitive advantages based on their IT investments has always
been a vital issue for researchers and practitioners in the IT/IS field (Kohli and Devaraj, 2003).
While there has been a large number of studies showing the positive impact of IT resources
on firm performance (Suoniemi et al., 2020; Ravichandran et al., 2005; Braojos et al., 2019;
Chakravarty et al., 2013), there is minimal research on the contribution of IT in the specific
context of digital transformation (Nwankpa and Datta, 2017). This study provides empirical
evidence of the impact of IT infrastructure on digital transformation through digital
transformation strategy, thus providing new ideas on IT value creation. Furthermore, by
demonstrating the mediating role of digital transformation strategy between IT
infrastructure and transformation performance, we enrich previous explorations of
mediating factors between IT and firm-level outcomes and contribute to developing a
research stream on imperative strategic perspective (Rivard et al., 2006).
Second, our study contributes to the existing digital transformation theory by
demonstrating the impact of the complementary effects of IT resources and digital
transformation strategy on digital transformation. Although previous studies have examined
the antecedents of successful digital transformation of enterprises, such as technology use
(Eller et al., 2020) and digital transformation strategy (Wang et al., 2020). These studies have
not provided a conclusive result on the micro-level mechanisms between IT, digital
transformation strategy and transformation performance (Tsou and Chen, 2021). This study
explores the impact of IT and digital transformation strategy on digital transformation. It
forms a new path for IT-driven digital transformation based on a strategic perspective, which
has significant theoretical value for developing existing research on the mechanisms of
digital transformation.
Third, this study contributes to the literature on organizational management and
differentiated value creation by exploring the role of top management in the digital
transformation process. We find that the impact of IT infrastructure on digital strategy and
the degree to which it transforms into digital transformation performance, depends on top
management capabilities. Top management can be complementary to IT resources and
digital transformation strategy. It can enhance the extent to which IT supports digital
transformation strategy and digital transformation strategy promotes the realization of
digital transformation. These results enrich the boundary conditions for the value creation of
IT resources and digital transformation implementation while having clear theoretical
BPMJ implications for developing both perspective on IT-enabled organizational capabilities and
29,2 the literature on complementary capabilities (Benitez et al., 2018).

5.2 Implications for practice

This study provides valuable insights for enterprises investing in IT and implementing
digital transformation. First, IT infrastructure investments are necessary for enterprises
544 undergoing digital transformation. However, managers must focus on digital transformation
strategies to realize IT business value rather than seeing only the superficial return on IT
investments. IT infrastructure indirectly facilitates digital transformation by supporting
enterprises’ digital transformation strategy capabilities. Therefore, managers’ investment
decisions in new IT should be guided by digital strategy. An important criterion should be the
extent to which IT supports and enhances the digital transformation strategy. This helps
managers guide their IT department’s work and evaluate IT investment’s contribution to
their transformation performance, rationalizing IT resources and exploiting this IT
infrastructure to exploit their relative strength.
Second, this study can help managers address the growing challenges posed by emerging
digital resources and digital capabilities. The study finds that superior IT infrastructure
capabilities may be a necessary but insufficient condition for digital transformation. A digital
strategy must guide digital transformation with competitive advantages to deploying IT
resources for transformation purposes. Therefore, managers should look for opportunities to
invest in digital resources and build firm digital strategic capabilities. Firms can construct
digital transformation strategies through internal innovation and change, or external
cooperation and consultation, so as to coordinate and implement digital transformation. Our
findings can guide practitioners on how to manage the digital transformation process of
enterprises.
Third, it helps to stimulate systematic efforts and practice of top managers in IT
management and strategy formulation and implementation. Top management is essential in
mining IT value and managing transformation activities to facilitate digital transformation
realization. In this context, managers need to support, engage and have the appropriate
capabilities to guide IT to deliver value in a direction aligned with the strategic goals of digital
transformation. Therefore, companies should upgrade or update the digital skills and
capabilities of their top management teams internally (e.g. through training) or externally
(e.g. through recruitment, collaboration and consulting) while introducing new leadership
roles (e.g. CDO) to adapt to the ever-changing external environment.

5.3 Limitations and future research direction

Several limitations must be considered when interpreting our results and conducting future
research. First, this study only uses a sample of 180 Chinese SMEs for validation. Considering
that such geographical and sample size limitations may threaten the generalizability of the
research results to a certain extent, subsequent research must enrich the sample data sources
and compare the obtained and available results. Second, this study only focuses on the nature of
digital transformation strategy without further consideration of strategic categorization.
Managers may be unable to identify specific strategic actions based on our results. This
limitation allows future digital transformation strategy researchers to delve into the
mechanisms of differentiation across strategy types. Third, the results of this study are the
summary and distillation of relevant theoretical research and the everyday experience of digital
transformation in various industries, without further exploring more complex situational factors
in various industries. Digital transformation is an industry phenomenon, so it is essential to
analyze the micro-foundations of our models in different contexts. Therefore, we encourage
future researchers to expand and refine our results by setting more scenarios.
References IT investment
Agarwal, R., Gao, G., DesRoches, C. and Jha, A.K. (2010), “Research commentary—the digital and digital
transformation of healthcare: current status and the road ahead”, Information Systems
Research, Vol. 21 No. 4, pp. 796-809.
transformation
Ahuja, S. and Chan, Y.E. (2016), “Digital innovation: a frugal ecosystem perspective”, Thirthy Seventh
International Conference on Information Systems, Dublin, pp. 1-22.
Aral, S. and Weill, P. (2007), “IT assets, organizational capabilities, and firm performance: how 545
resource allocations and organizational differences explain performance variation”,
Organization Science, Vol. 18 No. 5, pp. 763-780.
Artemenko, E. (2020), “The roles of top management in digital transformation”, IOP Conference Series:
Materials Science and Engineering, IOP Publishing, Vol. 940 No. 1, 012014.
Barney, J. (1991), “Firm resources and sustained competitive advantage”, Journal of Management,
Vol. 17 No. 1, pp. 99-120.
Barney, J.B., Ketchen, D.J. Jr and Wright, M. (2011), “The future of resource-based theory:
revitalization or decline?”, Journal of Management, Vol. 37 No. 5, pp. 1299-1315.
Benitez, J., Castillo, A., Llorens, J. and Braojos, J. (2018), “IT-enabled knowledge ambidexterity and
innovation performance in small US firms: the moderator role of social media capability”,
Information and Management, Vol. 55 No. 1, pp. 131-143.
Besson, P. and Rowe, F. (2012), “Strategizing information systems-enabled organizational
transformation: a transdisciplinary review and new directions”, The Journal of Strategic
Information Systems, Vol. 21 No. 2, pp. 103-124.
Bharadwaj, A., Sawy, O.A.E., Pavlou, P.A. and Venkatraman, N. (2013), “Digital business strategy:
toward a next generation of insights”, MIS Quarterly, Vol. 37 No. 2, pp. 471-482.
Braojos, J., Benitez, J. and Llorens, J. (2019), “How do social commerce-IT capabilities influence firm
performance? Theory and empirical evidence”, Information and Management, Vol. 56 No. 2,
pp. 155-171.
Chae, H.-C., Koh, C.E. and Park, K.O. (2018), “Information technology capability and firm performance:
role of industry”, Information and Management, Vol. 55 No. 5, pp. 525-546.
Chakravarty, A., Grewal, R. and Sambamurthy, V. (2013), “Information technology competencies,
organizational agility, and firm performance: enabling and facilitating roles”, Information
Systems Research, Vol. 24 No. 4, pp. 976-997.
Chanias, S., Myers, M.D. and Hess, T. (2019), “Digital transformation strategy making in pre-digital
organizations: the case of a financial services provider”, The Journal of Strategic Information
Systems, Vol. 28 No. 1, pp. 17-33.
Chen, Y., Wang, Y., Nevo, S., Benitez-Amado, J. and Kou, G. (2015), “IT capabilities and product
innovation performance: the roles of corporate entrepreneurship and competitive intensity”,
Information and Management, Vol. 52 No. 6, pp. 643-657.
Christensen, C.M., Bartman, T. and Bever, D.V. (2016), “The hard truth about business model
innovation”, MIT Sloan Management Review, Vol. 58 No. 1, pp. 31-40.
Cragg, P., Mills, A. and Suraweera, T. (2013), “The Influence of IT management sophistication and IT
support on IT success in small and medium-sized enterprises”, Journal of Small Business
Management, Vol. 51 No. 4, pp. 617-636.
Dalenogare, L.S., Benitez, G.B., Ayala, N.F. and Frank, A.G. (2018), “The expected contribution of
Industry 4.0 technologies for industrial performance”, International Journal of Production
Economics, Vol. 204 No. 1, pp. 383-394.
Devaraj, S. and Kohli, R. (2003), “Performance impacts of information technology: is actual usage the
missing link?”, Management Science, Vol. 49 No. 3, pp. 273-289.
Dong, J.Q. and Yang, C.-H. (2019), “Information technology and innovation outcomes: is knowledge
recombination the missing link?”, European Journal of Information Systems, Vol. 28 No. 6,
pp. 612-626.
BPMJ Eisenhardt, K.M. and Martin, J.A. (2000), “Dynamic capabilities: what are they?”, Strategic
Management Journal, Vol. 21 No. 10, pp. 1105-1121.
29,2
Eller, R., Alford, P., Kallm nzer, A. and Peters, M. (2020), “Antecedents, consequences, and challenges
of small and medium-sized enterprise digitalization”, Journal of Business Research, Vol. 112
No. C, pp. 119-127.
Gurbaxani, V. and Dunkle, D. (2019), “Gearing up for successful digital transformation”, MIS
Quarterly Executive, Vol. 18 No. 3, pp. 209-220.
546
Haffke, I., Kalgovas, B. and Benlian, A. (2016), “The role of the CIO and the CDO in an organization’s
digital transformation”, Thirty Seventh International Conference on Information Systems,
Dublin, pp. 1-20.
Hao, S. and Song, M. (2016), “Technology-driven strategy and firm performance: are strategic
capabilities missing links?”, Journal of Business Research, Vol. 69 No. 2, pp. 751-759.
Henseler, J., Hubona, G. and Ray, P.A. (2016), “Using PLS path modeling in new technology
research: updated guidelines”, Industrial Management and Data Systems, Vol. 116
No. 1, pp. 2-20.
Hess, T., Matt, C., Benlian, A. and Wiesb Ck, F. (2016), “Options for formulating a digital
transformation strategy”, MIS Quarterly Executive, Vol. 15 No. 2, pp. 123-139.
Hu, Q., Dinev, T., Hart, P. and Cooke, D. (2012), “Managing employee compliance with information
security policies: the critical role of top management and organizational culture”, Decision
Sciences, Vol. 43 No. 4, pp. 615-660.
Ilmudeen, A. and Bao, Y. (2020), “IT strategy and business strategy mediate the effect of managing IT
on firm performance: empirical analysis”, Journal of Enterprise Information Management,
Vol. 33 No. 6, pp. 1357-1378.
Isensee, C., Teuteberg, F., Griese, K.-M. and Topi, C. (2020), “The relationship between organizational
culture, sustainability, and digitalization in SMEs: a systematic review”, Journal of Cleaner
Production, Vol. 275, 122944.
Kane, G.C., Palmer, D., Phillips, A.N., Kiron, D. and Buckley, N. (2015), “Strategy, not technology,
drives digital transformation”, MIT Sloan Management Review and Deloitte University Press,
Vol. 14, pp. 1-25.
Kane, G.C., Palmer, D. and Phillips, A.N. (2017), “Achieving digital maturity”, MIT Sloan Management
Review, Vol. 59 No. 1, pp. 1-29.
Karhade, P. and Dong, J.Q. (2020), “Information technology investment and commercialized innovation
performance: dynamic adjustment costs and curvilinear impacts”, MIS Quarterly, Vol. 45 No. 3,
pp. 1007-1024.
Karimi, J., Somers, T.M. and Bhattacherjee, A. (2007), “The role of information systems resources in
ERP capability building and business process outcomes”, Journal of Management Information
Systems, Vol. 24 No. 2, pp. 221-260.
Kohli, R. and Devaraj, S. (2003), “Measuring information technology payoff: a meta-analysis of
structural variables in firm-level empirical research”, Information Systems Research, Vol. 14
No. 2, p. 127.
Kohli, R. and Grover, V. (2008), “Business value of IT: an essay on expanding research directions to keep
up with the times”, Journal of the Association for Information Systems, Vol. 9 No. 2, pp. 23-39.
Leischnig, A., W€olfl, S., Ivens, B. and Hein, D. (2017), “From digital business strategy to market
performance: insights into key concepts and processes”, Proceedings of the 38th International
Conference on Information Systems (ICIS 2017), Seoul, pp. 2-12.
Li, L., Su, F., Zhang, W. and Mao, J.Y. (2018), “Digital transformation by SME entrepreneurs:
a capability perspective”, Information Systems Journal, Vol. 28 No. 6, pp. 1129-1157.
Li, H., Wu, Y., Cao, D. and Wang, Y. (2021), “Organizational mindfulness towards digital
transformation as a prerequisite of information processing capability to achieve market
agility”, Journal of Business Research, Vol. 122 No. C, pp. 700-712.
Liang, H., Saraf, N., Hu, Q. and Xue, Y. (2007), “Assimilation of enterprise systems: the effect of IT investment
institutional pressures and the mediating role of top management”, MIS Quarterly, Vol. 31
No. 1, pp. 59-87. and digital
Liang, T.P., You, J.J. and Liu, C.C. (2010), “A resource-based perspective on information technology
transformation
and firm performance: a meta analysis”, Industrial Management and Data Systems, Vol. 110
No. 8, p. 1138.
Lim, J.-H., Dehning, B., Richardson, V.J. and Smith, R.E. (2011a), “A meta-analysis of the effects of IT
investment on firm financial performance”, Journal of Information Systems, Vol. 25 No. 2, 547
pp. 145-169.
Lim, J.-H., Stratopoulos, T.C. and Wirjanto, T.S. (2011b), “Path dependence of dynamic information
technology capability: an empirical investigation”, Journal of Management Information
Systems, Vol. 28 No. 3, pp. 45-84.
Lu, Y. and Ramamurthy, K. (2011), “Understanding the link between information technology
capability and organizational agility: an empirical examination”, MIS Quarterly, Vol. 35 No. 4,
pp. 931-954.
Makadok, R. (2001), “Toward a synthesis of the resource-based and dynamic-capability views of rent
creation”, Strategic Management Journal, Vol. 22 No. 5, pp. 387-401.
Mao, H., Liu, S., Zhang, J. and Deng, Z. (2016), “Information technology resource, knowledge
management capability, and competitive advantage: the moderating role of resource
commitment”, International Journal of Information Management, Vol. 36 No. 6, pp. 1062-1074.
Matt, C., Hess, T. and Benlian, A. (2015), “Digital transformation strategies”, Business and Information
Systems Engineering, Vol. 57 No. 5, pp. 339-343.
Melville, N., Kraemer, K. and Gurbaxani, V. (2004), “Information technology and organizational
performance: an integrative model of IT business value”, MIS Quarterly, Vol. 28 No. 2, pp. 283-322.
Mihardjo, L., Sasmoko, S., Alamsjah, F. and Diap, E. (2019), “The influence of digital leadership on
innovation management based on dynamic capability: market orientation as a moderator”,
Management Science Letters, Vol. 9 No. 7, pp. 1059-1070.
Mithas, S. and Rust, R.T. (2016), “How information technology strategy and investments influence
firm performance: conjecture and empirical evidence”, Mis Quarterly, Vol. 40 No. 1, pp. 223-245.
Mithas, S., Tafti, A. and Mitchell, W. (2013), “How a firm’s competitive environment and digital
strategic posture influence digital business strategy”, MIS Quarterly, Vol. 37 No. 2, pp. 511-536.
Nambisan, S., Lyytinen, K., Majchrzak, A. and Song, M. (2017), “Digital innovation management:
reinventing innovation management research in a digital world”, MIS Quarterly, Vol. 41 No. 1,
pp. 223-238.
Nambisan, S., Wright, M. and Feldman, M. (2019), “The digital transformation of innovation and
entrepreneurship: progress, challenges and key themes”, Research Policy, Vol. 48 No. 8, 103773.
Nwankpa, J.K. and Datta, P. (2017), “Balancing exploration and exploitation of IT resources: the
influence of digital business intensity on perceived organizational performance”, European
Journal of Information Systems, Vol. 26 No. 5, pp. 469-488.
Nwankpa, J.K. and Roumani, Y. (2016), “IT capability and digital transformation: a firm
performance perspective”, Thirty Seventh International Conference on Information Systems,
Dublin, pp. 1-16.
Oreg, S., Bartunek, J.M., Lee, G. and Do, B. (2018), “An affect-based model of recipients’ responses to
organizational change events”, Academy of Management Review, Vol. 43 No. 1, pp. 65-86.
Osmundsen, K., Iden, J. and Bygstad, B. (2018), “Digital transformation: drivers, success factors, and
implications”, MCIS 2018 Proceedings, AIS eLibrary, Corfu, p. 37.
Peng, J., Quan, J., Zhang, G. and Dubinsky, A.J. (2016), “Mediation effect of business process and
supply chain management capabilities on the impact of IT on firm performance: evidence from
Chinese firms”, International Journal of Information Management, Vol. 36 No. 1, pp. 89-96.
BPMJ Prebensen, N.K. and Xie, J. (2017), “Efficacy of co-creation and mastering on perceived value and
satisfaction in tourists’ consumption”, Tourism Management, Vol. 60 No. C, pp. 166-176.
29,2
Proksch, D., Rosin, A.F., Stubner, S. and Pinkwart, A. (2021), “The influence of a digital strategy on
the digitalization of new ventures: the mediating effect of digital capabilities and a digital
culture”, Journal of Small Business Management, Vol. 11 No. 2, pp. 1-29.
Queiroz, M., Tallon, P.P., Coltman, T., Sharma, R. and Reynolds, P. (2020), “Aligning the IT portfolio
with business strategy: evidence for complementarity of corporate and business unit
548 alignment”, The Journal of Strategic Information Systems, Vol. 29 No. 3, 101623.
Rai, A., Patnayakuni, R. and Seth, N. (2006), “Firm performance impacts of digitally enabled supply
chain integration capabilities”, MIS Quarterly, Vol. 30 No. 2, pp. 225-246.
Ravichandran, T. (2018), “Exploring the relationships between IT competence, innovation capacity and
organizational agility”, The Journal of Strategic Information Systems, Vol. 27 No. 1, pp. 22-42.
Ravichandran, T., Lertwongsatien, C. and Lertwongsatien, C. (2005), “Effect of information systems
resources and capabilities on firm performance: a resource-based perspective”, Journal of
Management Information Systems, Vol. 21 No. 4, pp. 237-276.
Rivard, S., Raymond, L. and Verreault, D. (2006), “Resource-based view and competitive strategy: an
integrated model of the contribution of information technology to firm performance”, The
Journal of Strategic Information Systems, Vol. 15 No. 1, pp. 29-50.
Sabherwal, R., Sabherwal, S., Havakhor, T. and Steelman, Z. (2019), “How does strategic alignment
affect firm performance? The roles of information technology investment and environmental
uncertainty”, MIS Quarterly, Vol. 43 No. 2, pp. 453-474.
Sebastian, I.M., Ross, J.W., Beath, C., Mocker, M., Moloney, K.G. and Fonstad, N.O. (2017), “How big
old companies navigate digital transformation”, Mis Quarterly Executive, Vol. 16 No. 3,
pp. 197-213.
Shiau, W.-L., Sarstedt, M. and Hair, J.F. (2019), “Internet research using partial least squares structural
equation modeling (PLS-SEM)”, Internet Research, Vol. 29 No. 3, pp. 398-406.
Shibin, K., Dubey, R., Gunasekaran, A., Hazen, B., Roubaud, D., Gupta, S. and Foropon, C. (2020),
“Examining sustainable supply chain management of SMEs using resource based view and
institutional theory”, Annals of Operations Research, Vol. 290 No. 1, pp. 301-326.
Sohal, A.S. and Fitzpatrick, P. (2002), “IT governance and management in large Australian
organisations”, International Journal of Production Economics, Vol. 75 Nos 1-2, pp. 97-112.
Spanos, Y.E. and Lioukas, S. (2001), “An examination into the causal logic of rent generation:
contrasting Porter’s competitive strategy framework and the resource-based perspective”,
Strategic Management Journal, Vol. 22 No. 10, pp. 907-934.
Suoniemi, S., Meyer-Waarden, L., Munzel, A., Zablah, A.R. and Straub, D. (2020), “Big data and firm
performance: the roles of market-directed capabilities and business strategy”, Information and
Management, Vol. 57 No. 7, p. 103365.
Svahn, F., Mathiassen, L. and Lindgren, R. (2017), “Embracing digital innovation in incumbent firms:
how Volvo Cars managed competing concerns”, MIS Quarterly, Vol. 41 No. 1, pp. 239-253.
Talke, K., Salomo, S. and Kock, A. (2011), “Top management team diversity and strategic innovation
orientation: the relationship and consequences for innovativeness and performance”, Journal of
Product Innovation Management, Vol. 28 No. 6, pp. 819-832.
Tekic, Z. and Koroteev, D. (2019), “From disruptively digital to proudly analog: a holistic typology of
digital transformation strategies”, Business Horizons, Vol. 62 No. 6, pp. 683-693.
Tilson, D., Lyytinen, K. and Rensen, C.S. (2010), “Digital infrastructures: the missing IS research
agenda”, Research commentary, Information Systems Research, Vol. 21 No. 4, pp. 748-759.
Tsou, H.-T. and Chen, J.-S. (2021), “How does digital technology usage benefit firm performance?
Digital transformation strategy and organisational innovation as mediators”, Technology
Analysis and Strategic Management, Vol. 20 No. 1, pp. 1-14.
Ukko, J., Nasiri, M., Saunila, M. and Rantala, T. (2019), “Sustainability strategy as a moderator in the IT investment
relationship between digital business strategy and financial performance”, Journal of Cleaner
Production, Vol. 236 No. 1, 117626. and digital
Vial, G. (2019), “Understanding digital transformation: a review and a research agenda”, The Journal
transformation
of Strategic Information Systems, Vol. 28 No. 2, pp. 118-144.
Wade, M. and Hulland, J. (2004), “The resource-based view and information systems research: review,
extension, and suggestions for future research”, MIS Quarterly, Vol. 28 No. 1, pp. 107-142.
549
Wang, Y., Shi, S., Nevo, S., Li, S. and Chen, Y. (2015), “The interaction effect of IT assets and IT
management on firm performance: a systems perspective”, International Journal of Information
Management, Vol. 35 No. 5, pp. 580-593.
Wang, N., Xue, Y., Liang, H., Wang, Z. and Ge, S. (2019), “The dual roles of the government in cloud
computing assimilation: an empirical study in China”, Information Technology and People,
Vol. 32 No. 1, pp. 147-170.
Wang, H., Feng, J., Zhang, H. and Li, X. (2020), “The effect of digital transformation strategy on
performance: the moderating role of cognitive conflict”, International Journal of Conflict
Management, Vol. 31 No. 3, pp. 441-462.
Weber, B., Butschan, J. and Heidenreich, S. (2017), “Tackling hurdles to digital transformation-the role
of competencies for successful IIoT implementation”, 2017 IEEE Technology and Engineering
Management Conference (TEMSCON), IEEE, Santa Clara, CA, pp. 312-317.
Wiesb€ock, F., Hess, T. and Spanjol, J. (2020), “The dual role of IT capabilities in the development of
digital products and services”, Information and Management, Vol. 57 No. 8, 103389.
Woldesenbet, K., Ram, M. and Jones, T. (2012), “Supplying large firms: the role of entrepreneurial and
dynamic capabilities in small businesses”, International Small Business Journal, Vol. 30 No. 5,
pp. 493-512.
Wrede, M. and Dauth, T. (2020), “A temporal perspective on the relationship between top management
team internationalization and firms’ innovativeness”, Managerial and Decision Economics,
Vol. 41 No. 4, pp. 542-561.
Yeow, A., Soh, C. and Hansen, R. (2018), “Aligning with new digital strategy: a dynamic capabilities
approach”, The Journal of Strategic Information Systems, Vol. 27 No. 1, pp. 43-58.
Zhang, X., Ma, L., Xu, B. and Xu, F. (2019), “How social media usage affects employees’ job
satisfaction and turnover intention: an empirical study in China”, Information and
Management, Vol. 56 No. 6, 103136.

Corresponding author
Yao Yu Xu can be contacted at: [email protected]

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: [email protected]