Digital transformation in operations management: Fundamental change through agency reversal

The emergence of digital technologies across all aspects of operations management (OM) has enabled shifts in decision making, shaping new operational dynamics and business opportunities. The associated scholarly discussions in information systems (IS) and OM span digital manufacturing (e.g., Roscoe et al., 2019), the digitalization of OM and supply chain management (e.g., Holmström et al., 2019), platform outcomes (e.g., Friesike et al., 2019), and economies of collaboration (e.g., Hedenstierna et al., 2019). For such changes to be successful, however, there is a need for organizations to go beyond the mere adoption of digital technologies. Instead, successful changes are transformational, delving into digital transformation (DT) endeavors (Vial, 2019), which in turn can enable operational improvements in organizational performance (Davies et al., 2017), lead to structural changes in operations processes, and may result in new business models being deployed. Appropriately, DT endeavors are increasingly treated in both the IS and OM literature as an ongoing process rather than an isolated project with a clear start and finish (e.g., Struijk et al., 2022). Here, we adopt this line of reasoning and specifically treat DT endeavors as: “the use of digital technologies to evolve operational activities by creating new or transforming existing processes, cultures, and customer experiences to meet changing business and market requirements.” Such a perspective is somewhat distinct from widely adopted definitions of DT in IS and OM (e.g., Vial, 2019), as well as from the strict consideration of radical operational innovation (cf. Hammer, 2004). Specifically, our perspective is neither predicated on “disruption” per se, nor limited by such transformations being fundamentally strategic ones for the focal organization. In other words, DT endeavors can (i) extend into the creation of new organizational processes, (ii) transform existing processes either incrementally or more substantially, (iii) shift decision making with regard to those processes, (iv) enable the consideration of new business models, and (v) largely serve as a source of facilitation and synergy in existing ones. In this special issue, we characterize the specific role of DT in OM as follows: through DT endeavors, digital technologies have the potential to affect OM processes and decision-making with regard to finance, design, production, and the delivery of products, services, or combinations of them. The broader OM literature has already set the stage for the consideration of new business models and innovation tournaments that have been extensively influenced by DT endeavors, such as platform services, omnichannel retail, supply chain information exchange, and Internet of Things (IoT)-enabled operations. This line of research can contribute to contemporary and ongoing discussions within the broader field (e.g., Holmström et al., 2019), including the opportunities for organizations to leverage presence in one market into other areas; the emergence of ecosystems that take into consideration all players in the value chain; the appeal of multi-sided platform business models that bring together disparate actors; the value of new data sources when serving new customers; and the importance of artificial intelligence (AI) in the form of advanced algorithmic solutions as a competitive advantage for organizations. Such scholarly discussions can further consider failures caused by the complexity and comprehensiveness of actions that organizations attempt to undertake during DT endeavors (Struijk et al., 2020, 2023). Empirical research as well as theoretical insights into DT endeavors, therefore, can challenge our established understanding of OM theory and practice, and highlight the importance of organizational dynamics as intertwined with higher levels (Struijk et al., 2022). Our aim here, thus, is to provide an epistemic platform to advance our understanding of how DT endeavors, including the adoption of digital technologies, business model innovations, and innovations in collaboration mechanisms and methods of operations improvement, can affect various aspects of OM. In the discussion that follows, we delineate a review and conceptualization of DT in OM, taking stock of the topic within the field and exploring pathways for moving forward beyond the hype. In doing so, we draw attention to a change in the relationship between humans and technology, where the roles of an agent and a principal are being reversed for the first time in the evolution of the broader IS theory and practice. Specifically, we argue that the transformative nature of DT lies in an agency reversal in many organizational processes that are affected by it. Technology evolution has been a central topic for the broader management literature, due to the transformative effect of technological change on organizations, individuals, and society at large (Grodal et al., 2023). Technology is inherent in OM theory and practice, and its role in the value-adding processes of organizations is crucial to the extent that early management theorists used the word “technology” in place of “process” when discussing what we now know as OM (Thompson, 2017). The evolution of OM, thus, has been tightly linked to the evolution of both physical technology as well as advanced IS, from the invention of the spinning jenny in the early 18th century to modern advanced algorithmic solutions. Our special issue focuses on the latter, within the context of DT and the broader consumerization of digital technologies (Gregory et al., 2018; Struijk et al., 2022). Although we use that term (DT) and argue that the contemporary forms of such technologies bear an exceptional potential for fundamental change, it is still useful to view contemporary technologies within the greater picture of the evolution of organizational IS. In doing so, we see three distinct phases in that evolution as shown in Table 1. This view departs from the idea that the contemporary digital technologies are merely linear extensions of technological evolution, in the sense that they deliver similar benefits as all of the previous technologies such as reducing the costs of data collection, storage, as well as processing, and enable faster and better decision making. Instead, we view the historical development in the role of digital technologies in OM as encompassing three major stages: stand-alone tools, integrated tools, and, contemporaneously, increasingly autonomous tools that have the potential to deliver an unprecedented change in the human-technology where DT in OM further three through an on the technologies of the a on how various digital technologies have to OM practice. the when the for the turn of the when and advanced and systems for integrated supply chain the field of OM has an in the use of IS. In those early systems the of manufacturing tools to enable the of with an unprecedented of the systems to the use and of tools from the evolution of physical technologies. 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