Classification of Digital Transformation Stages and Portfolio Characteristics: A Framework Applied to Annual Reports of Japanese Listed Companies

This study proposes a quantitative evaluation method and a new theoretical framework for Digital Transformation (DX) stages based on text analysis of Japanese companies’ securities reports. Traditionally, DX stages have been explained through a linear model of Digitization, Digitalization, and Digital Transformation, but disparities between this model and corporate realities have become problematic. Analysis of 426 companies’ securities reports based on the three-stage DX model revealed that the classification accuracy of the Ensemble model was approximately 64%. Analysis of misclassifications showed significant bidirectional misclassifications between stages, suggesting that companies possess multiple stage elements simultaneously during DX progression, indicating a "portfolio characteristic." Based on these findings, we propose a "DX Activity Portfolio Model." This research provides a new perspective to DX stage theory and offers practical implications for companies to develop and evaluate DX strategies more aligned with reality.