Exploring the Role of Third Parties in Digital Transformation Initiatives: A Problematized Assumptions Perspective
Jack O'Neill, David Pidoyma, Ciara Northridge, Shivani Pai, Stephen Treacy, and Andrew Brosnan
This study investigates the role and influence of external partners in corporate digital transformation projects. Using a 'problematized assumptions' approach, the research challenges the common view that transformation is a purely internal affair by analyzing existing literature and conducting 26 semi-structured interviews with both client organizations and third-party service providers.
Problem
Much of the existing research on digital transformation describes it as an initiative orchestrated primarily within an organization, which overlooks the significant and growing market for third-party consultants and services. This gap in understanding leads to problematic assumptions about how transformations are managed, creating risks and missed opportunities for businesses that increasingly rely on external expertise.
Outcome
- A fully outsourced digital transformation is infeasible, as core functions like culture and change management must be led internally. - Third parties play a critical role, far greater than literature suggests, by providing specialized expertise for strategy development and technical execution. - The most effective approach is a bimodal model, where the organization owns the high-level vision and mission, while collaborating with third parties on strategy and tactics. - Digital transformation should be viewed as a continuous process of socio-technical change and evolution, not a project with a defined endpoint. - Success is more practically measured by optimizing operational components (Vision, Mission, Objectives, Strategy, Tactics - VMOST) rather than solely focusing on a reconceptualization of value.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I'm your host, Anna Ivy Summers. Host: Today, we're diving into a fascinating study titled "Exploring the Role of Third Parties in Digital Transformation Initiatives: A Problematized Assumptions Perspective". Host: In short, it investigates the critical role external partners play in a company's digital transformation, challenging the common belief that it's a journey a company must take alone. Host: To help us unpack this is our expert analyst, Alex Ian Sutherland. Alex, welcome to the show. Expert: Great to be here, Anna. Host: So Alex, digital transformation is a huge topic, but we often think of it as an internal project. Why is it so important to focus on the role of external partners, or third parties? Expert: It’s critical because there’s a major disconnect between academic theory and business reality. Most research talks about transformation as if it’s orchestrated entirely inside a company's walls. Expert: But in the real world, the market for third-party consultants and digital service providers is enormous and growing. Businesses are relying on them more and more. Expert: This study highlights that by ignoring the role of these partners, we're operating on flawed assumptions. This creates a knowledge gap that can lead to significant risks, project failures, and missed opportunities. Host: So how did the researchers go about closing that gap? What was their approach? Expert: They used a really smart two-pronged approach. First, they reviewed over 200 existing studies to identify common, but often unproven, beliefs about digital transformation. Expert: Then, and this is the key part, they conducted 26 in-depth interviews with senior leaders from both sides of the fence—the companies undergoing transformation and the third-party firms providing the services. Host: That gives a really balanced perspective. So, what did they find? Let’s start with a big question: can a company just hire a firm to handle its entire digital transformation? Expert: The study's answer is a clear no. A fully outsourced transformation just isn't feasible. Interviewees consistently said that core internal functions, especially company culture and change management, have to be led from within. Expert: As one CIO put it, real change management is subtle and requires buy-in from internal leadership. You can't just outsource the human element. Host: That makes sense. But these third parties still play a vital role, correct? Expert: A massive one, and far greater than most literature suggests. They bring in crucial, specialized expertise for both developing the strategy and for the technical execution. Expert: They have experience from similar projects in other organizations, so they know the potential pitfalls and can provide a clear roadmap, which an internal team might struggle to create from scratch. Host: So if it’s not fully internal and not fully external, what’s the ideal model? Expert: The study points to what it calls a bimodal model. Think of it as a strategic partnership with a clear division of labor. Expert: The organization itself absolutely must own the high-level vision and mission. That's the 'why'. But it should collaborate closely with its external partners on the strategy and the day-to-day tactics—the 'how'. Host: A partnership model. I like that. Now, what about the finish line? Is transformation a project that eventually ends? Expert: That's another common myth the study busts. It shouldn't be viewed as a project with a defined endpoint. Instead, it’s a continuous process of socio-technical evolution. Expert: The market is always changing, and technology is always evolving, so the business must continuously adapt as well. The transformation becomes part of the company's DNA. Host: This is all incredibly insightful. Let's get to the most important part for our listeners. Alex, what are the key business takeaways? If I'm a leader, what do I need to do? Expert: There are three main takeaways. First, don't abdicate responsibility. You cannot outsource leadership. As a business leader, you must own the vision, drive the cultural shift, and champion the change. Your partner is there to enable you, not replace you. Expert: Second, be very deliberate about the partnership model. Clearly define who owns what. The study suggests a framework called VMOST—Vision, Mission, Objectives, Strategy, and Tactics. Your company owns the Vision and Mission. You collaborate on Objectives, and you can leverage your partner's expertise heavily for Strategy and Tactics. Expert: And third, treat it as a true partnership, not a simple transaction. Success relies on joint governance, shared goals, and constant communication. You're building something new together, and that requires deep alignment every step of the way. Host: That’s a fantastic summary, Alex. So to recap: digital transformation is a team sport. Leaders must own the vision and culture, collaborate with external experts in a bimodal partnership, and remember that it’s an ongoing journey, not a final destination. Host: Alex Ian Sutherland, thank you so much for breaking this down for us. Expert: My pleasure, Anna. Host: And thank you to our audience for tuning into A.I.S. Insights — powered by Living Knowledge. We’ll see you next time.
Digital Transformation, Third Parties, Managed Services, Problematization, Outsourcing, IT Strategy, Socio-technical Change
