Digital transformation: A mutual understanding and strategic alignment perspective

Previous studies have shown a positive impact of mutual understanding on IT strategic alignment and its impact on firm performance. However, digital transformation (DX) is changing the way businesses operate, communicate and create value and it is at the top of the agendas of CEOs. While DX requires top management support and commitment, no previous research has addressed the mutual understanding between C-level managers on the role and contribution of DX. This paper aims to fill this gap by measuring the mutual understanding between top-level managers on the role of DX, its impact on strategical alignment and finally contribution of it to firm performance. For this, we extend the work of Johnson and Lederer (2010) and adapt previously validated IS instruments to DX by reviewing the literature on digital strategy and by making in-depth interviews with CIO/CDOs of 4 international companies and 2 IS academics. Our paper extends the theories of mutual understanding and IT strategic alignment to quantitatively assess the role and contribution of DX. Our study can help organizations increase interaction, communication, and collaboration between different departments and raising awareness about the importance and impact of DX on companies' success.