Next Step: How Digital Literacy Affects Digital Transformation

in Companies

Karel Maršálek

Department of Information Technologies, Prague University of Economics and Business,

nám. Winstona Churchilla 4, Prague, Czech Republic

Keywords: Digital Literacy, Digital Transformation, Digital Skills, Digital Workforce.

Abstract: Digital transformation has become indispensable for many companies in the current digital era. However, the

success of any digital transformation project is largely determined by several prerequisites. One such

prerequisite is undoubtedly the digital literacy of the company’s employees. This paper, therefore, argues for

the measurement of digital literacy in companies and subsequent assessment of the effects that the digital

literacy of employees has on digital transformation in the company. While there are several already existing

“universal” frameworks for measuring digital literacy, they are not perfectly suited for the specifics of a

business/company environment. Thus, the paper encourages future research in this area and announces the

intent to create an index for measuring digital literacy in a business/company context. This will serve as a

basis for constructing a framework for assessing a company’s digital transformation readiness based on its

employees’ digital literacy level.

1 INTRODUCTION

In the current era of never-ending and rapid changes,

Digital transformation has become an indispensable

requirement for numerous organizations. This

phenomenon has had a significant impact on entire

industries and has provided companies with new

opportunities to improve their efficiency. However,

digital transformation is a complex and multifaceted

process that poses significant challenges to

organizations, particularly when it comes to

implementing changes at an organizational level.

Digital transformation also has significant

implications for future employment (Loebbecke &

Picot, 2015). Several types of skills and knowledge

that were required from the workforce in the past

decades are gradually becoming less important as

completely new requirements are being posed on the

workforce of the current digital era.

2 DIGITAL TRANSFORMATION

The term digital transformation has become a

https://orcid.org/0000-0002-5511-6022

buzzword over the past years. It has been used so

widely that it is no wonder that its meaning has often

been misinterpreted. While there is no universally

accepted definition of digital transformation

(Schallmo et al., 2017), most definitions agree that it

involves the use of digital technologies to improve the

functioning of an entity. This can include the adoption

of new business models, improvement of existing

work routines, exploration of new revenue streams,

and ensuring sustainable value creation (Gimpel et

al., 2018).

This aligns with Vial’s (2019) conceptual

definition of digital transformation as “a process that

aims to improve an entity by triggering significant

changes to its properties through combinations of

information, computing, communication, and

connectivity technologies”.

Gong and Ribiere (2021) attempted to develop a

unified definition of digital transformation as a

“fundamental change process enabled by digital

technologies that aims to bring radical improvement

and innovation to an entity [e.g., an organization, a

business network, an industry, or society] to create

value for its stakeholders by strategically leveraging

its key resources and capabilities.”

170

MarÅ ˛aÃ ˛alek, K.

Next Step: How Digital Literacy Affects Digital Transformation in Companies.

DOI: 10.5220/0012120200003552

In Proceedings of the 20th International Conference on Smart Business Technologies (ICSBT 2023), pages 170-175

ISBN: 978-989-758-667-5; ISSN: 2184-772X

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

Several critical success factors are necessary to

ensure the success of any digital transformation

project. These include factors such as leadership

style, organizational strategy and structure,

management style, technology, and customer needs

and demands (Saraiva et al., 2021). However, perhaps

the most significant challenge that companies face is

the readiness of employees for organizational

changes (Silva et al., 2022). That is because no

organizational change can be successfully

implemented unless the employees are ready for it.

Employees’ digital literacy is, therefore, a

necessary prerequisite for the success of any digital

transformation project, and companies need to

recognize the importance of this factor.

3 DIGITAL WORKFORCE

Nowadays’ workforce is often referred to as the

“digital workforce”. Not only does this imply that this

workforce operates in the current digital era, but it

also implies the digital skills and knowledge that are

required from the workforce. There are, of course,

significant gaps within the working population in

terms of individuals’ ability to fulfil these

requirements, i.e. there are large differences in terms

of the digital skills and knowledge the workers

possess. These inequalities subsequently function as

a catalyst for a phenomenon called the “digital

divide” (van Dijk, 2013).

Initially established in the second half of the

1990s, the term “digital divide” refers to the “gap

between those who do and those who do not have

access to new forms of information technology”

(van Dijk, 2006). While the digital divide used to be

rooted mainly in inequality in terms of access to

computers and the Internet, the root cause has over

the years shifted towards inequality in terms of digital

skills (van Dijk, 2013). Both the infrastructural and

skill barriers often combine, which further amplifies

the resulting dividing effect. This is the case mainly

in low- and middle-income communities, where

factors such as insufficient Internet access,

educational constraints, lack of digital skills, and lack

of interest all play a significant role (Chetty et al.,

2018), which subsequently “widens the digital gap”

within the population.

To further amplify the digital divide, certain

groups of people generally find it easier to obtain

skills that involve using digital technologies. Referred

to as “digital natives” (Prensky, 2001), they represent

the generation(s) of people who were exposed to

digital technologies very early on in their lives.

Therefore, they are usually able to quickly and rather

easily learn skills that involve the use of digital

technologies, which enables them to adapt to the

requirements posed by the digital era. This ability –

often referred to as “digital fluency” – can be defined

as „the maximum individual potential to achieve

desired outcomes through the use of digital

technology” (Briggs & Makice, 2012).

Nevertheless, digital natives definitely do not

represent the whole population that is exposed to

digital technologies (Colbert et al., 2016). “Digital

immigrants” (Prensky, 2001) is a term referring to the

predeceasing generation, i.e. those who were not

exposed to widely available digital technologies at a

young age. Thus, they can find it more difficult to

obtain certain digital skills when compared to digital

natives. Nevertheless, the nowadays’ requirements

towards the digital workforce apply to both of these

groups, as they both need to be able to leverage digital

skills and knowledge – not just at work, but also in

everyday life.

4 DIGITAL LITERACY

Although digital technologies can enhance the speed,

accuracy, cost-effectiveness, and overall efficiency of

various company processes, they can also have the

opposite effect – they can result in further

complexities and challenges for employees.

Employees need specific sets of skills to be able

to use digital technologies effectively, and companies

must invest in training and development programs to

ensure that their employees possess these skills.

Despite the importance of digital literacy, many

companies overlook this factor or take it for granted.

However, this is a false assumption that can

significantly diminish the potential positive effects of

digital transformation. Therefore, it is vital to raise

awareness about the importance of digital literacy and

ensure that employees possess the skills and

knowledge necessary to use digital technologies in

their work to their full potential, or at least to a

satisfactory level.

4.1 Evolution of Digital Literacy

The term digital literacy encompasses various skills

that are related to the use of digital technologies. The

scope of digital literacy, meaning the types of

literacies or skills that it comprises, has been a topic

of extensive discussion over the past 25 years. In one

of the first definitions, Gilster (1997) described

Next Step: How Digital Literacy Affects Digital Transformation in Companies

171

digital literacy as a combination of three types of

literacies:

 Computer,

 Information,

 Media literacy.

Although the importance of these foundational

building blocks, particularly computer/ICT and

information literacy, has remained acknowledged

over the years, the scope of digital literacy has since

significantly expanded. Subsequent publications have

highlighted the significance of several other skills.

Contemporary researchers also often stress the

importance of a multidimensional approach to digital

literacy (Nichols & Stornaiuolo, 2019). In order to

fully comprehend the phenomenon of digital literacy,

it is necessary to study it in its whole broadness. To

be digitally literate means not only to be able to use

software or operate a digital device (Eshet-Alkalai,

2004).

Closely related to digital literacy or digital skills

are the so-called “21

century skills”, which

emphasizes that these skills are necessary for the

workforce of the current century. It is apparent that a

significant share of these skills is inevitably

underpinned by digital technologies. Many authors

therefore use the terms “digital skills” and “21

century skills” interchangeably. However, van Laar et

al. (2017) suggest that 21

century skills need to be

investigated both in their digital and non-digital

forms, since 21

century skills are not necessarily

underpinned by ICT.

4.2 Defining Digital Literacy

Nowadays, there is no universal scope of digital

literacy, as various authors emphasize different

literacies or skills. While the goal of this paper is not

to introduce an exact scope of digital literacy, i.e.,

which skills should be included and which should not,

it is still necessary to define, at minimum, a rough

scope of skills that should (or at least could) be

considered relevant.

A literature review was conducted in order to

define such scope. The search was performed using

the eResources of the National Library of Technology

in Prague, which provides access to several well-

established databases. Most of the relevant results

were included in the following databases: Scopus,

ScienceDirect, Springer, Taylor & Francis, Wiley,

and ResearchGate.

The search included the term “digital literacy” as

well as related terms, specifically “digital skills” and

“21

century skills”. However, these terms have

recently been widely discussed in the context of

medical and computer science, which are irrelevant to

the focus of this paper. The search was therefore

restricted only to social sciences, with business,

management, and psychology being the most relevant

subject areas.

Table shows which types of literacies and skills

were identified as relevant expansions to the overall

scope of digital literacy (in addition to the already

mentioned computer, information, and media

literacies).

Table 1: Expanded scope of digital literacy.

Type of literacy

or skills

References

Collaboration (Buitrago-Flórez et al., 2021)

(Carretero et al., 2017)

(van Laar et al., 2017)

(Voogt & Roblin, 2012)

Communication (Buitrago-Flórez et al., 2021)

(Carretero et al., 2017)

(Chetty et al., 2018)

(van Dijk, 2013)

(van Laar et al., 2017)

(Voogt & Roblin, 2012)

Content-creation or

creativity

(Buitrago-Flórez et al., 2021)

(Carretero et al., 2017)

(van Dijk, 2013)

(van Laar et al., 2017)

(Voogt & Roblin, 2012)

Critical thinking (Buitrago-Flórez et al., 2021)

(van Laar et al., 2017)

(Voogt & Roblin, 2012)

Data (Carretero et al., 2017)

Problem-solving (Buitrago-Flórez et al., 2021)

(Carretero et al., 2017)

(van Laar et al., 2017)

(Voogt & Roblin, 2012)

Safety (Carretero et al., 2017)

Strategic (van Dijk, 2013)

Technology (Chetty et al., 2018)

Despite the evolving nature of digital literacy, the

fundamental purpose remains the same – to enable

individuals to use digital technologies effectively,

efficiently, and ethically. This can, of course, be

related to both their personal and professional lives.

This paper, however, focuses on the professional part,

i.e., how can digital literacy of employees benefit

companies in their functioning, especially with regard

to digital transformation.

While there are undoubtedly many various

literacies and skills that can be labelled as “digital”,

they are not all equally relevant or significant for

companies and their employees, especially with

ICSBT 2023 - 20th International Conference on Smart Business Technologies

172

regard to their digital transformation efforts. These

types of literacies and skills can also be further

divided into more specific segments or even

individual skills, some of which are definitely more

relevant than others. Additionally, the already

outlined fragmentation in defining the scope of digital

literacy also further complicates determining what is

relevant and what is not.

To be able to investigate and measure the relation

between digital literacy and digital transformation in

the company, it is first necessary to define which

segments of digital literacy are key in the

business/company context and to what extent.

5 RESEARCH GAPS

Since digital transformation has been a widely-

discussed topic for many years now, many various

frameworks have emerged that focus on assessing

how ready a company is for digital transformation

(i.e., Digital Transformation Readiness). However,

these frameworks tend to be very comprehensive and

often attempt to encompass many different aspects –

this is understandable due to the sheer complexity and

wide scope that digital transformation brings.

Nevertheless, this means that some of the aspects – in

this case, digital literacy – do not receive as much

attention individually, while they definitely deserve

to be analyzed more in-depth.

Silva et al. (2022) highlight that there is still a gap

in assessing how ready a company is to successfully

embrace digital transformation, especially with

regard to SMEs (Small and Medium Enterprises).

Moreover, they stress that there is an even more

significant gap in assessing this readiness from an

employee’s perspective.

This is supported by Trenerry et al. (2021), stating

that the focus of recent digital transformation studies

and reviews has mainly been directed to the business

and strategic levels, while employee-related factors

have received only a little attention.

Similar to digital transformation, digital literacy

has also been the subject of several frameworks that

have emerged over the past years. Some of these

frameworks even deal directly with measuring digital

literacy, such as European Commission’s DigComp

(Vuorikari et al., 2022) or International Certification

for Digital Literacy, formerly known as European

Computer Driving Licence (ICDL, 2023).

Nevertheless, these frameworks tend to be rather

wide in terms of their scope and often revolve around

the everyday usage of digital technologies, attempting

to be universally applicable to all contexts and

situations. I would, however, like to focus on digital

literacy, specifically in the business/company

context. While the contribution of these “universal”

frameworks is undoubtable, their universal

applicability is perhaps their greatest weakness.

Measuring digital literacy in the company context, as

well as its effects on digital transformation processes

in the company, requires a different, more focused

approach.

6 PLANNED RESEARCH

In order to investigate and measure how the digital

literacy of employees affects the digital

transformation processes in the company, it is first

necessary to be able to measure the level of digital

literacy of individual employees. This, however,

cannot be done universally for any employee in any

company. There are obviously significant differences

in terms of the skills employees need to possess based

on their position in the company and tasks that relate

to this position, the department in which they work,

and also the field in which the company operates.

Therefore, the first part of my research will focus

on developing a digital literacy index for measuring

digital literacy specifically in the business/company

context, labelled as Business Digital Literacy Index

(BDLI).

Following up on the measurement of the

employees’ level of digital literacy, the second part of

my research will revolve around investigating and

measuring how certain levels of digital literacy affect

the digital transformation processes in the company.

This will be manifested in a framework for assessing

the digital transformation readiness of a company

with a focus on the human aspect, i.e., how well

prepared the company is for the digital transformation

based on the level of digital literacy of its employees.

It is worth noting that digital transformation

readiness can be perceived not only at the company

level, but also at the level of individual employees.

With this in mind, the digital literacy level of an

employee directly affects their individual digital

transformation readiness, thus affecting the readiness

of their company.

6.1 Expected Contributions

Digital transformation projects in any company

always bring great risks and obstacles. Many digital

transformation projects result in failure or, at least, do

not bring the expected benefits to the company. This

can obviously happen due to various complex internal

Next Step: How Digital Literacy Affects Digital Transformation in Companies

173

or external factors. Nevertheless, the reason is often

much simpler – the company just is not ready for such

change, or more specifically, its employees are not

ready.

Assessing the company’s readiness for digital

transformation projects is vital since it can spare the

company great amounts of resources and effort,

which could otherwise be wasted on a project that is

destined to fail from the beginning. Any company

should first spend enough time and effort determining

what effects (both positive and negative) can a digital

transformation project bring to the company before

investing resources into it.

The assessment of the employees’ level of digital

literacy and its implications for the company’s digital

transformation readiness is also needed to identify the

pain points and critical areas that the company should

focus on to increase its readiness. Increasing the

employees’ level of digital literacy in specific critical

areas instead of possibly unnecessary large-scale

educational projects is definitely much more feasible

for any company. On top of that, smaller-scale

educational activities are also more likely to receive

the necessary support from the management since

they require fewer financial and human resources.

But even improving in just these smaller critical areas

can then prove to be absolutely vital for the success

of future digital transformation projects.

6.2 Research Methods

The Business Digital Literacy Index (BDLI) will – to

a large extent – be built on the already existing

“universal” digital literacy frameworks, such as

DigComp and ICDL, as well as frameworks or

models that focus on certain subsets of digital skills,

such as the Data Literacy Competency Model

(Smolnikova, 2022). Apart from that, I plan to follow

a similar approach to what Raber et al. (2012) used

for their maturity model for Business Intelligence,

specifically to use the Capability Maturity Model

Integration (CMMI) and the Item Response Theory

(IRT) as described by Millsap and Maydeu-Olivares

(2009).

Building on the IRT and recognizing the already

mentioned DigComp, ICDL, and the Data Literacy

Competency Model, I will create a questionnaire for

the assessment of employees’ level of digital literacy.

It is important to note that the scope of digital

literacy has been perceived differently by various

authors and frameworks. In other words, there is no

universally accepted scope of digital literacy. As a

result, specific types of digital skills can be perceived

as relevant by some authors/frameworks but

completely ignored as unimportant by others.

Moreover, the digital skills required in everyday life

differ from what is required for the efficient

functioning of an employee in the company context.

However, it is not sufficient to divide digital skills

into two groups based on them being

important/relevant and unimportant/irrelevant in the

company context. To add even more complexity, it is

apparent that some of the “important” digital skills

are more important than other “important” skills.

Therefore, the questionnaire will also include a

weighting principle. As a result, the truly critical

digital skills will be prioritized in the assessment of

the employees’ level of digital literacy.

I am currently in the phase of preparing the pilot

version of the questionnaire for measuring the

employees’ level of digital literacy. Once ready, I am

planning on having this pilot version verified by an

expert panel.

Secord part of my research will begin with

gathering responses to this questionnaire from

multiple selected companies to assess the overall

level of digital literacy in these companies as well as

in their individual departments. I will then

consolidate these results and analyze their effects on

digital transformation projects that are currently

ongoing or planned to take place in the surveyed

companies. This will serve as a basis for constructing

the framework for assessing the digital

transformation readiness of a company based on the

digital literacy level of its employees.

7 CONCLUSIONS

Digital transformation is and will be indispensable for

many companies in order to remain competitive.

However, this poses significant requirements and

challenges not just for the companies as a whole but,

most importantly, for their employees. The workforce

of the current era needs to possess new types of skills

at a sufficient level, i.e., it needs to have a sufficient

level of digital literacy. This is absolutely vital for the

success of any digital transformation project.

Therefore, it is necessary to assess the readiness of the

company with regard to the digital literacy of its

employees before conducting any such project.

Measuring the level of digital literacy of the

company’s employees and assessing its effect on

digital transformation is thus required and should be

thoroughly researched.

ICSBT 2023 - 20th International Conference on Smart Business Technologies

174

REFERENCES

Briggs, C., & Makice, K. (2012). Digital Fluency: Building

Success in the Digital Age (Roč. 2012). Digital Fluency.

Buitrago-Flórez, F., Danies, G., Restrepo, S., & Hernández,

C. (2021). Fostering 21st Century Competences

through Computational Thinking and Active Learning:

A Mixed Method Study. International Journal of

Instruction, 14(3), 737–754. https://doi.org/10.29333/

iji.2021.14343a

Carretero, S., Vuorikari, R., & Punie, Y. (2017). DigComp

2.1: The Digital Competence Framework for Citizens

with eight proficiency levels and examples of use

(Scientific Analysis or Review, Technical Guidance

KJ-NA-28558-EN-N; s. 48). Publications Office of the

European Union. https://doi.org/10.2760/38842

Colbert, A., Yee, N., & George, G. (2016). The Digital

Workforce and the Workplace of the Future. Academy

of Management Journal, 59, 731–739. https://

doi.org/10.5465/amj.2016.4003

Eshet-Alkalai, Y. (2004). Digital Literacy: A Conceptual

Framework for Survival Skills in the Digital Era.

Journal of Educational Multimedia and Hypermedia,

13(1), 93–106.

Gilster, P. (1997). Digital Literacy (1st edition). Wiley.

Gimpel, H., Hosseini, S., Huber, R., Roeglinger, M., Probst,

L., & Faisst, U. (2018). Structuring Digital

Transformation—A Framework of Action Fields and

its Application at ZEISS. Journal of Information

Technology Theory and Application, 19.

Gong, C., & Ribiere, V. (2021). Developing a unified

definition of digital transformation. Technovation, 102,

102217. https://doi.org/10.1016/j.technovation.2020.

102217

Chetty, K., Qigui, L., Gcora, N., Josie, J., Wenwei, L., &

Fang, C. (2018). Bridging the digital divide: Measuring

digital literacy. Economics: The Open-Access, Open-

Assessment E-Journal, 20. https://doi.org/10.5018/

economics-ejournal.ja.2018-23

ICDL. (2023). ICDL. ICDL Global. https://icdl.org/

Loebbecke, C., & Picot, A. (2015). Reflections on societal

and business model transformation arising from

digitization and big data analytics: A research agenda.

The Journal of Strategic Information Systems, 24(3),

149–157. https://doi.org/10.1016/j.jsis.2015.08.002

Millsap, R. E., & Maydeu-Olivares, A. (2009). The SAGE

Handbook of Quantitative Methods in Psychology (s.

xxvi, 759). Sage Publications Ltd. https://doi.org/10.

4135/9780857020994

Nichols, T. P., & Stornaiuolo, A. (2019). Assembling

“Digital Literacies”: Contingent Pasts, Possible

Futures. Media and Communication, 7(2), 14–24.

https://doi.org/10.17645/mac.v7i2.1946

Prensky, M. (2001). Digital Natives, Digital Immigrants.

On the Horizon, 9(5), 1–6. https://doi.org/10.1108/

10748120110424816

Raber, D., Winter, R., & Wortmann, F. (2012). Using

Quantitative Analyses to Construct a Capability

Maturity Model for Business Intelligence. 2012 45th

Hawaii International Conference on System Sciences,

4219–4228. https://doi.org/10.1109/HICSS.2012.630

Saraiva, C., Mamede, H. S., Silveira, M. C., & Nunes, M.

(2021). Transforming physical enterprise into a remote

organization: Transformation impact: digital tools,

processes and people. 2021 16th Iberian Conference on

Information Systems and Technologies (CISTI), 1–5.

https://doi.org/10.23919/CISTI52073.2021.9476463

Schallmo, D., Williams, C., & Boardman, L. (2017). Digital

Transformation of Business Models—Best Practice,

Enablers, and Roadmap. International Journal of

Innovation Management, 21, 1740014. https://doi.org/

10.1142/S136391961740014X

Silva, R. P., Saraiva, C., & Mamede, H. S. (2022).

Assessment of organizational readiness for digital

transformation in SMEs. Procedia Computer Science,

204, 362–369. https://doi.org/10.1016/j.procs.

2022.08.044

Smolnikova, M. (2022). Building a Data Literate Business

Workforce: Proceedings of the 14th International Joint

Conference on Knowledge Discovery, Knowledge

Engineering and Knowledge Management, 221–230.

https://doi.org/10.5220/0011587600003335

Trenerry, B., Chng, S., Wang, Y., Suhaila, Z. S., Lim, S. S.,

Lu, H. Y., & Oh, P. H. (2021). Preparing Workplaces

for Digital Transformation: An Integrative Review and

Framework of Multi-Level Factors. Frontiers in

Psychology, 12, 620766. https://doi.org/10.3389/

fpsyg.2021.620766

van Dijk, J. A. G. M. (2006). Digital divide research,

achievements and shortcomings. Poetics, 34(4–5),

221–235. https://doi.org/10.1016/j.poetic.2006.05.004

van Dijk, J. A. G. M. (2013). A theory of the digital divide.

In The Digital Divide: The Internet and Social

Inequality in International Perspective (s. 29–51).

Routledge. https://research.utwente.nl/en/publications/

a-theory-of-the-digital-divide

van Laar, E., van Deursen, A. J. A. M., van Dijk, J. A. G.

M., & de Haan, J. (2017). The relation between 21st-

century skills and digital skills: A systematic literature

review. Computers in Human Behavior, 72, 577–588.

https://doi.org/10.1016/j.chb.2017.03.010

Vial, G. (2019). Understanding digital transformation: A

review and a research agenda. The Journal of Strategic

Information Systems, 28(2), 118–144. https://doi.org/

10.1016/j.jsis.2019.01.003

Voogt, J., & Roblin, N. P. (2012). A comparative analysis

of international frameworks for 21st century

competences: Implications for national curriculum

policies. Journal of Curriculum Studies, 44(3), 299–

321. https://doi.org/10.1080/00220272.2012.668938

Vuorikari, R., Kluzer, S., & Punie, Y. (2022). DigComp 2.2,

The Digital Competence framework for citizens: With

new examples of knowledge, skills and attitudes.

Publications Office of the European Union.

https://data.europa.eu/doi/10.2760/115376,

Next Step: How Digital Literacy Affects Digital Transformation in Companies

175