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Digital reform of public sector organizations rests on their ability to innovate with digital technology. Since the public sector innovation literature pays limited attention to digital, and as digital innovation is rarely investigated in public sector contexts, current knowledge on digital innovation capabilities in such organizations is limited. Through a case study of digital reform in a local government organization, we identify how public sector conditions organizations' capability for digital innovation. This includes legal structures that propagate infrastructural fragmentation, resource allocation systems that restrict innovation scopes, how political pressure leads to conflicting frames of the strategic role of digital, and how public and legal liability may lead to innovation paralysis. The paper contributes to the literature by illustrating the unique conditions for digital innovation in the public sector, and to practice by highlighting key shifts that increase organizations' digital innovation capability.

Digital innovation (DI) has enabled businesses to enhance their existing market offerings by integrating digital features. Despite advanced technologies, substantial marketing efforts, and global recognition, businesses can still struggle to convince customers to adopt their digital market offerings. This process of spreading novel innovation is known as diffusion. In the fast-growing digital world, due to the unique characteristics of DI, traditional diffusion theories and models show limited explanatory power, creating challenges for researchers and practitioners alike. With the aim of exploring these challenges, we position our research within the IS literature with the following research question:"How and why do diffusion enablers and barriers emerge during digital innovation?". We conducted an interpretive case study of Company X, one of the world's largest consulting firms and an active DI practitioner. Our findings suggest that digital innovation diffusion can be enabled or hindered by several understudied interdependencies in its technological architecture. Furthermore, for successful diffusion, how DI distributes the division of labor between actors and subsequent layers must be effectively embedded and aligned for value in the clients' context in order to diffuse successfully. This study provides novel insights and compelling research avenues. 

The emergence of new digital technologies has paved a way for new business opportunities which have led to drastic changes to the way organizations do business. This technological progress has resulted in a conundrum in which research cannot always keep up with the rate of technological progress. Said issue can be observed in the complex and resource-intensive field of digital transformation which has several research gaps. Primary of which is the lack of research concerning how an organization can systematically assist the digital transformation of another organization in a cooperative environment. The aim of this study was to generate a deeper understanding of digital transformation as a process of co-creation by conducting a qualitative study on how an organization that works with integration of digital solutions systematically assists their customers with digital transformation. In line with the aim of this study, we have analyzed the case based on an analytical framework grounded in existing digital transformation research. Our analysis shows that the studied organization succeeded in systematically assisting its customers digital transformation because of its cooperative and flexible workflow. This workflow allows the organization to rapidly and iteratively collect and exchange information with its customers. Based on that information the organization is able to produce prototypes and deliver digital innovation solutions that are in line with its customers’ demands. Additionally, the workflow combined with the acquired information allows the organization to systematically influence and steer their customers digital transformation at different stages of the co-creational process. The results of this study showcased that the conceptualization of digital transformation in existing research is limited. This indicates that future studies in the field should focus on researching digital transformation in the context of how one organization can assist in another organization’s digital transformation.