Digital transformation and financial performance Do digital specialists unlock the profit potential of new digital business models for SMEs?

• Published in: Managing Digital Transformation Vol. 1; pp. 240 - 258
• Main Authors: Fabian, Nicolai E., Broekhuizen, Thijs, Nguyen, Dinh Khoi
• Format: Book Chapter
• Language: English
• Published: Routledge 2021
• Edition: 1
• Subjects: Digital Transformation; Business Model; PLS; Business Processes; SME Firm; CMB; Low Cross-loadings; Firm Financial Performance; Chief Digital Officers; Digital Change; Financial Performance; Business Model Innovation; Fine Grained Results; Digital Technologies; Existing Business Model; Van Alstyne; Improve Firm Performance; Harman’s Single Factor Test; Business Model Change; SME; Ave; OLS Result; digital specialist; Digital Specialists; Digital Business Model; SEM
• ISBN: 0367441977; 036744268X; 9780367442682; 9780367441975
• DOI: 10.4324/9781003008637-25

This study aims to assess the impact of digital transformation on financial performance. Conceptualizing digital transformation as a measure for digital business model change, we explore how the relationship between firms’ digital transformation and financial performance depends on the presence of dedicated digital experts: digital specialists. Using survey data of 189 Dutch SMEs, we find that the presence of digital specialists does not directly improve financial performance, but that it helps to convert digital transformation more effectively: the positive association between digital transformation and financial performance only exists when firms have a digital specialist. Our contingency approach underlines the context-specific nature of digital transformation and highlights the importance of specialists in unlocking the value of digital transformation. Theoretical and managerial implications are discussed.