From digital transformation to project performance: A capability-based perspective on organizational agility as a full mediator

Digital transformation is a strategic issue of concern that has gained critical importance in organizations aiming to enhance competitiveness and operating performance in the fast-changing business environments. Although the use of digital technologies has become increasingly common, there has been little research on the mechanisms that digital transformation converts to better project performance. Based on the capability-based view, this research presumes that organizational agility mediates completely the impact of digital transformation on the performance of the project. To this end, this research explores the mediating effect of organizational agility on the indirect effects of digital transformation on project performance. Digital transformation is conceptualized based on three main dimensions: adoption of digital technology, digital culture, and digital skills and capabilities. A structured questionnaire based on a quantitative research approach was used to gather the information of professionals working in the field of project management and organizational operations. The proposed hypotheses were tested by analyzing the data with the help of the Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS software. The findings suggest that the use of digital technology, digital culture, and digital skills and capabilities have a significant positive impact on organizational agility. Moreover, the impact of organizational agility on the project performance is strong and positive. The mediation analysis supports the fact that organizational agility completely mediates the association between the dimensions of digital transformations and project performance. These results indicate that digital transformation itself is not directly associated with the positive effects on the project outcome unless it is converted into agile organizational capabilities. This research paper adds to the body of knowledge about project management by offering empirical data about the primary importance of organizational agility as a mechanism connecting the digital transformation to the performance of the project. The implications of the findings to managers also include practical implications that managers should strive to build agile capabilities and digital projects to ensure high-quality project deliverables in a dynamic environment.