Digital Transformation of Incumbent Firms: A Business Model Innovation Perspective

The literature argues that a real digital transformation of firms requires holistic changes of the business model. Despite knowledge about this ambitious goal, understanding of how digital business model transformation can be achieved is still very limited. In this article, we explore how firms achieve digital business model transformation. We apply a case study design to investigate how incumbents have changed their respective business model dimensions during digital transformation. Our findings center on interview data and complementary archival records from 15 cases. We present a framework for digital business model transformation along the dimensions of value proposition, value creation, and value capture. Our results emphasize the importance of a preparatory phase in which the strategic course is set. Furthermore, our findings demonstrate that transforming a company's business model is most effective when a single person, namely the Chief Digital Officer, is responsible. Our findings contribute to the business model literature, by providing a more holistic view on how business model innovation can be utilized during digital transformation.