Digital-intelligence transformation, for better or worse? The roles of pace, scope and rhythm

Purpose Although digital transformation (DT) has emerged as an important phenomenon for both research and practices, the influences remain inconclusive and inadequate. The emerging artificial intelligence (AI) technologies further complicate the understanding and practices of DT while understudied yet. To address these concerns, this study takes a process perspective to empirically investigate when and how digital-intelligence transformation can improve firm performance, aiming to enrich the literature on digital-intelligence transformation and strategic information systems (IS) field. Design/methodology/approach Drawing on the dynamic capability view and business agility, we took a process perspective to conceptualize and empirically examine the influence of digital-intelligence transformation and the process characteristics. Taking a continuous panel dataset of listed Chinese firms covering 2007 to 2020, we investigated digital-intelligence transformation’s effect on firm performance and the moderating roles of three strategic aspects: pace, scope and rhythm. Findings This study found that digital-intelligence transformation positively affects firm performance and is moderated by the characteristics of transformation processes (i.e. pace, scope and rhythm). Specifically, the high-paced and rhythmic transformation processes facilitate the positive relationship, while the large scope undermines the benefits of transformation. These relationships hold across various endogeneity and heterogeneity analyses. Originality/value Our findings provide valuable implications for digital-intelligence transformation and strategic IS field. First, this study enriches existing literature on digital-intelligence transformation by empirically investigating the influence from a process perspective. Moreover, this study provides insights into a comprehensive understanding of the complexity of digital-intelligence transformation and the influences of AI. Finally, this study provides practical implications on how to make digital-intelligence transformation to benefit firm performance.