From Digitization to Transformation: Conceptual Foundations and Strategic Approaches for Service-Oriented Organizations

Despite its ubiquity in management discourse, digital transformation (DT) remains one of the least precisely defined concepts in the field. This paper addresses two interrelated gaps: the lack of definitional clarity distinguishing DT from the related but narrower concepts of digitization and digitalization, and the insufficient theorization of how service-oriented businesses (SOBs) respond to DT strategically. Drawing on a narrative literature review, the paper first traces the conceptual progression from digitization through digitalization to full digital transformation, establishing a working definition anchored in fundamental, technology-enabled change to an organization’s value proposition. It then examines how SOBs adopt exploitative and explorative knowledge management strategies in response to DT pressures, and presents organizational ambidexterity as a framework for reconciling incremental optimization with radical innovation. The paper contributes a synthesized conceptual foundation suited to guiding both future empirical research and managerial practice in serviceintensive contexts.