Beyond technology adoption: How critical factors drive business performance through digital transformation

In the age of digitalization and artificial intelligence, companies in the manufacturing sector face new opportunities to improve their business performance (BP). However, they also face significant challenges in achieving a successful digital transformation (DT). In this context, this study analyzes how critical factors (AW, OP, RD, and TC) drive DT and how DT influences the BP of manufacturing companies. Based on the resource-based view (RBV) and dynamic capabilities theory (DCT), this research develops and empirically tests a conceptual framework using data from a survey of 175 formal manufacturing firms located in Peru. The data were analyzed using the partial least squares structural equation modeling (PLS-SEM) approach. The results indicate that AW, OP, RD, and TC significantly influence DT. While the direct effects of these factors on BP are less consistent, DT exerts a strong and significant impact on BP and mediates the relationship between the critical factors and performance outcomes. These findings highlight the strategic role of DT as a mechanism through which critical factors translate into improved BP in manufacturing firms.