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This paper explores the use of system dynamics modeling for evaluating digital transformation (DT) strategies in traditional industries facing dynamic changes. The authors propose a system dynamics model that integrates technology, production, marketing, management, and capital to identify and test DT opportunities. A case study demonstrates the model's ability to evaluate DT strategies through simulation and data analysis, highlighting its potential for improving strategic planning and productivity while minimizing costs.
Simulation-based dynamic business modeling offers a cost-effective way to evaluate digital transformation strategies and improve strategic planning in dynamic industries.
With the continuous advancement of digital technology, traditional manufacturing and service industries are facing dynamic changes with diversified demand and business models. Digital transformation (DT) and dynamic business modeling have become increasingly necessary for companies to evaluate and prioritize better opportunities to improve strategic planning and productivity. This study demonstrates that the system dynamics modeling process, based on the principles of sustainable system development, can fully reflect the comprehensiveness of systems thinking and avoid the drawbacks of linear thinking failing to integrate various departments. The proposed model enables the comprehensive integration of technology, production, marketing, management, and capital, thereby identifying and testing opportunities for successful DT with minimal costs and budgetary constraints. A real-world case study demonstrates the value of simulation-based dynamic business modeling with scientific data analysis for evaluating DT strategies.
