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NTU Management Review Vol. 34 No. 3 Dec. 2024

strategy requires more emphasis on the implementation of information management and
mechanisms.

2.2 Stages of Digital Transformation

Digital transformation is difficult and in a given case it is likely to fail. It needs
an iterative process to transform existing business practices through the adoption and
implementation of digital technologies (Dąbrowska et al., 2022). Bonnet (2022) identifies

three stages of digital transformation: modernization, enterprise-wide transformation,
and new business creation. In the first stage, digital transformation involves digitizing
existing processes and functions. By connecting products with digital technology,
companies should re-engineer the core process, supported by digital technology features
(Yoo, Boland, Lyytinen, and Majchrzak, 2012). Digital technologies should be able to be

reprogrammed and reconfigured according to the needs of companies and industries.
Once digital technologies are connected to the system, companies face the dual
world of offline and online communities. This process is defined as an enterprise-wide

transformation (Bonnet, 2022). Companies create possibilities to capture complex cross-
value chains enabled by certain efforts. In addition, companies heighten their engagement
with digital transformation by creating and implementing various technological interfaces
to develop, deliver, and capture more excellent value (Sjödin et al., 2022). For example,
the recent development of omnichannel retail offers customers different touchpoints

by which to capture more dynamic value within the retail industry (Piotrowicz and
Cuthbertson, 2014).
Digital technology investments can open new opportunities to create new revenue

streams and optimize existing business processes due to their generative capabilities
(Iansiti and Lakhani, 2020; Sjödin et al., 2022). This opportunity arises from increased
opportunities for new revenue streams, identified as new digital transformation
business creation stages. The transition into new revenue streams should align with the
organization’s existing processes, structures, and capabilities. Digital technologies can

revolutionize how an ecosystem governs innovation to co-create value by rethinking and
creating a new boundary to promote combinatorial innovation (Leone, Schiavone, Appio,
and Chiao, 2021; Thomas and Tee, 2022). Digital technologies are a platform interface

that can connect and integrate diverse groups of actors to co-create and redefine value

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