Strategic digital transformation in higher education and its effect on organizational agility and innovation performance

Abstract

Higher education institutions (HEIs) have adopted digital transformation strategies to keep pace with rapid digital innovation and enhance competitiveness, efficiency, and academic standards. This study examined the effects of digital transformation on educational governance and the potential for innovation using a combined theoretical and statistical approach. Key digital technologies, including data analytics, cloud computing, AI tools, and LMS, are considered enablers that make an institution more agile and improve decision-making. The hypothesized relationships were tested empirically using structural equation modelling (SEM). The reliability studies of the questionnaires showed good internal consistency, with Cronbach's Alpha, Composite Reliability, and AVE exceeding the acceptable levels. According to the structural model, digital transformation significantly enhances academic governance. Innovation capability can also be improved directly through digital transformation. Combined, the academic governance should also play a mediating role, with an indirect impact of 0.27, adding to the overall effect of digital transformation in this regard. The overall impact of digital transformation on innovation capability (0.85) shows the extent to which it has in the institutional context of HEIs. We also determined predictive accuracy, with R2 values of 0.41 for academic governance and 0.62 for innovation capability. On the whole, the sources of information presented in this research indicate that digital transformation can be considered a significant catalyst for enhancing the agility, innovation, and sustainable competitive advantage of HEIs.