Digital Transformation Classification Types and Evolution Process for Established Companies

Abstract

This paper propose that digital transformation (DX) can be classified into three types: DX1.0, DX2.0, and DX3.0. DX1.0 is defined as “institutional optimization”, where internal data is integrated across the company divisions. DX2.0 represents “value chain optimization” where the number of actors such as partners and supplier’s increased, optimization is achieved in providing value to the end users. DX3.0 represents “new business value creation” where new value is created through new business models (for example, servitization, and platform business). This paper further clarifies the method used by companies for updating their business models by utilizing the data, working with other actors, and defining digital transformation classification types and the evolution processes. Digital transformation classification types evolve incrementally when their operation and systems are based on data-centric.