Digital Transformation and Organizational Performance: Linking Employee Digital Competence, Customer Experience andFinancial Outcomes

Abstract

Digital transformation creates organizational value only when technological resources are translated into employee capabilities, superior customer interactions, and ultimately stronger economic outcomes. This study develops and tests a three-construct model linking Employee Digital Competence (EDC), Customer Experience (CE), and Financial Outcomes (FO). PLS-SEM was applied to 200 complete survey cases using IIISR SEM v2.0.7. The reflective measurement model demonstrated satisfactory reliability, convergent validity, and discriminant validity. EDC positively influenced CE (beta = 0.545, p < .001), while CE positively influenced FO (beta = 0.545, p < .001). The indirect effect of EDC on FO through CE was significant (0.297, p < .001), supporting the proposed mediating mechanism. The model explained approximately 30% of the variance in both CE and FO and demonstrated positive predictive relevance. The findings position customer experience as an important market-facing pathway through which employee digital competence can be converted into financial value.