HKUST Business School Magazine

Embracing Digital Transformation: A Strategic Imperative By Associate Professor Dongwon LEE Department of Information Systems, Business Statistics and Operations Management HKUST Business School In recent decades, the rapid rise of digital technologies has positioned digital transformation at the forefront of academia and industry. This phenomenon is not simply about adopting new technologies; it involves a fundamental change in how organizations operate, engage with customers, and deliver value. Digital transformation represents a significant change to an existing organization through digital technologies, distinct from digital innovation, which focuses on creating something new, and digital disruption which refers to the replacement of existing systems. Understanding these distinctions is crucial for organizations aiming to navigate the complex landscape of digital change effectively. Understanding digital transformation Digital transformation is characterized by several key aspects. First, it leverages cutting-edge technologies such as big data analytics, blockchain, the Internet of Things (IoT), and artificial intelligence (AI). These technologies offer capabilities and connectivity that far exceed what traditional IT systems can provide. 1 Second, digital transformation transcends organizational boundaries, engaging with broader ecosystems and business networks. This cross-boundary approach allows organizations to create value not just internally but also across entire supply chains and customer bases. Lastly, digital transformation can lead to the emergence of new digital business models even in industries that are not inherently digital. By understanding these dimensions, organizations can better position themselves for successful digital transformation. Digital transformation presents organizations with opportunities and challenges; fostering innovation and collaboration is key to creating lasting value for stakeholders. Insight Biz@HKUST 34