From Digital Foundations to Transformational Outcomes: Unveiling the Mediating Role of AI Adoption and the Boundary Role of Decision Quality

Abstract

The study investigates how organizational digital capabilities contribute to digital transformation success by examining the mediating role of artificial intelligence (AI) adoption and the moderating role of decision quality. Specifically, the study explores how digital infrastructure maturity and digital readiness influence AI adoption and how AI adoption translates these capabilities into successful digital transformation outcomes.A quantitative research design was employed, and data were collected from organizations undergoing digital transformation initiatives. The proposed structural model was empirically tested using structural equation modeling (SEM) to examine the direct, mediation, and moderation relationships among digital infrastructure maturity, digital readiness, AI adoption, decision quality, and digital transformation success.The findings demonstrate that digital infrastructure maturity and digital readiness significantly enhance AI adoption and digital transformation success. AI adoption plays a critical mediating role by translating organizational digital capabilities into transformation outcomes. Furthermore, decision quality strengthens the relationship between AI adoption and digital transformation success, indicating that organizations with superior decision-making processes derive greater value from AI-enabled initiatives.This study contributes to digital transformation and AI adoption literature by developing an integrated model that explains the mechanisms through which organizational capabilities generate transformation value. By positioning AI adoption as a key transformation pathway and decision quality as an important boundary condition, the study provides new insights into how organizations can maximize returns from AI investments and achieve sustainable digital transformation.