Exploring the Role of Soft Factors in Enhancing Digitalization Project Success: A Multi-layer Perspective Emphasizing the Influence of Individual, Team and Organizational Learning

Abstract

Over the past two decades, there has been a significant increase in the adoption of digital technologies within organizations, leading to the increase of implementation of digitalization projects. These projects are strategic initiatives that leverage digital technologies to facilitate organizational transformation. Despite their growing trend of undertaking digitalization projects in various sectors, these projects often experience high failure rates. One contributing factor to these outcomes is the tendency to prioritize technical factors and paying less attention to soft factors. Furthermore, digitalization projects have yet to gain widespread recognition within the project management field. This lack of popularity has resulted in a lack of widespread knowledge focused specifically on soft factors for these types of projects. The aim of this thesis was to explore critical soft factors in the context of digitalization projects, to better understand how such factors can contribute to the success of such projects. This research addresses three specific questions, employing a three-phase approach similar to the dual funnel model. Following the dual funnel model, each segment of the dual funnel (top, middle, and bottom) yielded insights from various papers, each contributing to addressing one or more of the following three research questions: RQ1: What are the challenges that organizations face in implementing digitalization projects? RQ2: How do different soft factors rank in terms of their influence on the successful implementation of digitalization projects? RQ3: What strategies and approaches have proven most effective in overcoming challenges related to the implementation of the highest ranking soft factor in digitalization projects? The thesis is divided into two parts, where Part I presents the summary of the research conducted and integrates the theoretical background and key findings. Part II presents the 6 papers included in the thesis. This research was not as straightforward as it might seem. Changes were incorporated throughout the process in response to emerging research findings. The research incorporated various qualitative methods such as interviews, case study, open-ended questionnaire, and archival data (document). In addition, a quantitative method was also incorporated through surveys. However, only one paper employed mixed methods incorporating both interviews and a survey. Research Question 1 (RQ1) is primarily explored in Papers A, B and C. Paper A explores the interplay of soft factors in managing digitalization projects, revealing two key insights: firstly, it identifies three critical actors essential for the success of digitalization projects; secondly, it illustrates the inter-relationships among soft factors within the context of digitalization projects. Paper B examines the challenges in digitalization projects, emphasizing the crucial role of soft factors in managing the interactions between three key elements namely innovation, digital technologies, and organizing. It also points out three central factors in integrating these pillars which are team commitment, effective leadership, and a positive working environment. Paper C focuses on identifying the hinderances encountered in digitalization projects, highlighting the challenges involved in implementing and adopting such projects. Research Question 2 (RQ2) is primarily addressed in Paper C and partially in Paper F. Paper C identified eight critical soft factors that are highly influential in the successful implementation and adoption of digitalization projects, with learning emerging as the top-ranked factor. This provides a clearer understanding of the priority and impact of these factors in the successful implementation of digitalization projects. Meanwhile, Paper F attests to the importance of learning for successful digitalization project outcomes. Research Question 3 (RQ3) is primarily addressed in Papers D, E, and F, with additional insights from Paper C. Paper C presents an integrated framework, demonstrating that successful implementation and adoption of digitalization projects require readiness at multiple levels: organizational, project-based, and individual. Paper D focuses on the factors that hinder and facilitate learning within digitalization projects. It identifies key enablers such as the nature of the work, employee willingness, support from top management, and a supportive work environment. Paper E explores the «knowing-doing gap,» highlighting the discrepancy between the awareness of challenges in digitalization projects and the actions taken to address them. It reveals that while employees generally show a willingness to learn and adapt to digitalization changes, there is often a lack of similar commitment from top management to support learning and foster an environment conducive to it. Paper F focuses on the factors that add uncertainty to the project environment which then leads to identifying the challenges in managing digitalization projects. In addition, Paper F investigates strategies for effectively tackling the challenges posed by uncertainty in digitalization projects, offering insights and approaches to managing such uncertainty. The main contributions of this thesis provide insights on the holistic management of digitalization projects through a learning-focused approach. This involves incorporating perspectives from all three levels: individual, project, and organizational, to gain a comprehensive understanding of the factors driving success and the crucial interrelationships among these levels. Focusing solely on one level risks missing other challenges and overlooks potential solutions critical for effectively addressing these challenges. This thesis underscores the importance of an integrated approach, as illustrated below, to ensure that learning and response strategies encompass all organizational tiers, thereby effectively navigating the complexities inherent in digitalization projects.