Realizing Strategic Value from Digital Innovation Initiatives - Digital Innovation Theory-Driven Portfolio and Transformation Management

The executive management of a company plays a critical role in strategy formulation and achieving the company's financial targets. Strategy implementation requires investment in various initiatives and investments in digital innovation initiatives have increased considerably in recent years, and they now account for a major part of companies' overall investment portfolio. Simultaneously, innovative use of digital technologies is triggering transformation processes in organizations, thereby changing the nature of many traditional service and manufacturing companies. In many organizations, CEOs executive management teams are finding it challenging to realize strategic value for the company and its customers from these investments. On the one hand, existing studies have not been able to adequately connect innovation portfolio management (IPM) to digital innovation theories to support portfolio management of digital innovation initiatives (PMDII). On the other hand, practitioners find it challenging to manage digital transformation by using the theories of digital innovation, digital transformation, and Industry 4.0 transformation. This research aims to enrich the theory and practice of realizing greater strategic value from digital innovation initiatives through portfolio management and transformation management. Digital innovation theory forms the backbone of this research, and it is used to clarify and simplify digital-innovation-specific portfolio and transformation management measures. Dissertation consists of three published articles where the first research paper focuses on analyzing and understanding the status of the research on digital IPM and value realization. This study is utilizing systematic literature review as a method. The second research paper focuses on how IPM theory can be developed for PMDII by considering the specific demands related to digital innovation. On the third research paper the role of executive management in the transformation driven by digital innovation is analyzed. Both in the second and third paper utilize single case study with grounded theory research method. This dissertation places digital innovation theory at the core of managing portfolios of digital innovation initiatives and the digital transformation triggered by such initiatives. Studies provide novel models for digital-innovation-specific portfolio management and digital transformation management to realize strategic value.