Efficiency of the use of information and communication technologies as a determinant of the digital business transformation process

Abstract

Purpose: The purpose of this paper is an analysis of the process of digital transformation of enterprises, by measuring the efficiency of the use of information and communication technologies (ICTs) in business in 29 European countries in the period from 2012 to 2020. Design/methodology/approach: A Charnes, Cooper and Rhodes data envelopment analysis (CCR DEA, 1978) window model has been developed to measure the ICT efficiency of European countries. Several indicators of the use of information and communication technologies in enterprises are selected as the variables of the proposed models, which are available as such in the Eurostat database for European countries. Due to the sensitivity of the results obtained by applying the DEA method to measurement errors and output values, the robustness analysis of the obtained values of average efficiency is also performed, using the bootstrap method. Findings: The obtained results show that the highest average technical efficiency of the use of ICT in companies by windows, in the observed period, is recorded in Belgium, while Denmark is in the second place. Bulgaria, Romania, Greece and Latvia have the lowest average technical ICT efficiency per window. The analysis of the obtained results by years in the same period brings identical conclusions. Only Belgium has been ICT efficient many times. In general, for all observed countries, the movement of average ICT efficiency in the observed period shows a slightly growing trend, with the exception of a significantly decline in 2013. However, the fact is that the ICT efficiency of the observed countries in the past period is relatively low and for all countries it is 46.36%, with no country being 100% efficient and with eight countries whose average efficiency is below 50% of best practice. Research limitations/implications: To measure and evaluate the efficiency of ICT use in enterprises, four variables for efficiency assessment are identified, given the fact that only these data are available continuously for the observed period from 2012 to 2020 in the Eurostat database. Practical implications: Low efficiency of using digital potential in business of the observed countries indicates the need for better understanding of the nature and goals of the digital business transformation process by employees and management, to create conditions for effective implementation and optimization of business digitalization. Originality/value: Measurement of digital transformation is the subject of a very small number of studies and research, which mainly focus on measuring and assessing the impact of digital transformation on individual countries and perform a comparative analysis of technological development in those countries. Also, analyses are mainly based on identifying similarities and differences between countries or ranking countries according to adopted evaluation criteria using different digitization indices. A step forward in this research is the application of the DEA window method for measuring the relative efficiency of the use of ICT in enterprises, and the development of a model that can be extended if necessary with indicators for which data are available.