Information technology investment and digital transformation: the roles of digital transformation strategy and top management

• Published in: Business process management journal 2023-03, Vol.29 (2), p.528-549
• Main Authors: Zhang, Xin, Xu, Yao Yu, Ma, Liang
• Format: Article
• Language: English
• Subjects: Anniversaries; Business models; Competition; Competitive advantage; Digital technology; Digital transformation; Expenditures; Information systems; Information technology; Infrastructure; Multivariate statistical analysis; Organizational change; Strategic management; Strategy; Transformations; Value creation
• ISSN: 1463-7154; 1758-4116
• DOI: 10.1108/BPMJ-06-2022-0254

PurposeIn 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/approachThrough 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.FindingsDigital 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/valueThis 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.