Examining the Impact of Digital Transformation on Business Models of Service Organizations

Abstract

This study aimed to examine the impact of digital transformation on the business models of service organizations and identify structural changes, challenges, and benefits. This qualitative study employed an inductive content analysis approach. Data were collected through semi-structured interviews with 25 senior managers and IT experts from service organizations in Tehran. Purposeful sampling was used, and interviews continued until theoretical saturation was reached. Data analysis was conducted using NVivo software based on open, axial, and selective coding. The results indicated that digital transformation has led to extensive changes in business models, including reduced managerial hierarchies, digitalized processes, and improved customer interactions. Key challenges in implementing digital transformation included employee resistance to change, high implementation costs, and cultural and organizational barriers. Conversely, increased operational efficiency, the development of new revenue models, and enhanced customer experience were identified as major benefits of digital transformation in service organizations. Digital transformation significantly influences the structure and performance of service organizations. Despite existing challenges, its adoption can enhance organizational efficiency and competitiveness. To successfully navigate this transformation, organizations must implement well-defined strategies for change management, invest in digital infrastructure, and foster a digital culture within the workplace.