1. Introduction

In the context of digital transformation, enterprises are facing unprecedented challenges as well as opportunities. Emerging technologies such as information technology, artificial intelligence, big data, and cloud computing have profoundly transformed business operations and the commercial environment. While it is undeniable that this new wave of transformation has led to increased operational efficiency, expanded business scope, and enhanced innovation capabilities, it has also exposed certain issues and risks. The new operational models under digital transformation differ significantly from traditional models, resulting in a near-reconstruction of previous business processes, organizational structures, and management models to adapt to the rapidly changing economic environment. This process is accompanied by various risks, including data security concerns, operational risks related to technology, risks associated with employee adaptation and resistance, and compliance risks, among others. Neglecting or improperly addressing these risks can impact or even jeopardize the stability of business operations, financial health, and market competitiveness of enterprises.

To address these risks and challenges, enterprises must develop new, comprehensive countermeasures, risk management strategies, and even contingency plans. These aspects will be thoroughly analyzed and examined in the following sections. In summary, while digital transformation has undoubtedly brought certain advancements and improvements, it also presents numerous challenges that cannot be overlooked. For enterprises to thrive, they must implement effective measures to manage these risks, ensuring the smooth progress of digital transformation and achieving long-term, sustainable operations. This paper will review and assess the definition and background of digital transformation, the everyday operational risks faced by enterprises, and the impact of digital transformation on these risks, laying the groundwork for further in-depth research..

2. Literature Review

2.1. Definition and Background of Digital Transformation

Digital transformation represents a novel concept in enterprise management and transformation. Although the idea was proposed decades ago, much like emerging concepts such as the metaverse, there still isn't a nearly exact and comprehensive definition of digital transformation. Li Min et al. [1] suggest that digital transformation involves repositioning the business, which is not merely shifting operations from offline to online or simply reducing costs and increasing efficiency. It also requires continuous business restructuring in response to environmental changes, with a focus on target customers, guided by sharp insight and observation. Liu Yang et al. [2] argue that digital transformation is built on the foundation of information transformation, with digital modeling as its core, driven by data analysis and utilization. They believe that in the context of the global digital economy, characterized by the maturity of new technologies such as cloud computing and big data, and the deep exploration and integration of data, digital transformation has become a hallmark of future intelligence. These two perspectives are currently among the most widely recognized definitions. Digital transformation is not only about applying technology; it is a comprehensive and profound organizational change that requires enterprises to plan strategically to ensure the effective integration of technology, people, and processes.

2.2. Enterprise Operational Risks

In daily business operations, enterprises may encounter various threats and uncertainties, all of which contribute to operational risks. These risks can potentially affect the financial health, business processes, reputation, and strategic objectives of an enterprise. Managing and controlling these risks is crucial for successful and stable operations. Chen Peng [3] points out that human resource risks are particularly prominent in enterprise operations. In today's highly competitive industry, frequent employee turnover is common, and failure to recruit and retain top talent can significantly impact a company's operations and competitiveness. He also notes that departmental issues are critical; if cultural differences and communication barriers between departments are ignored, it can lead to decreased work efficiency and even project delays. Another scholar, Xia Jun [4], believes that financial issues are the most significant problems in enterprise operations. Improper risk structures, unreasonable financing, tax evasion, and tax avoidance can expose enterprises to financial risks, even bankruptcy. Many companies currently face difficulties due to bad debts, outstanding payments, and cash flow problems, which are exacerbated by inflation and economic downturns, further accelerating their decline. The diversity and unpredictability of risks are challenges that all enterprises must face.

2.3. Impact of Digital Transformation on Enterprise Operational Risks

Digital transformation impacts enterprise operations in multiple ways. It can expose new types of risks while also helping enterprises better identify, manage, and mitigate existing risks. First, it introduces some new risks: technical risks (including system failures, data breaches, cyber-attacks, etc.), data privacy and compliance risks, business process risks (where new digital tools and systems may lead to instability or disruption in business processes, especially during the transition phase or system integration), and organizational culture and change management risks (employees' ability to adapt to new technologies, and the cultural changes brought about by digital transformation, which may influence the success of the transformation). If these issues arise, they can significantly impact a company's economy and, in severe cases, may also affect the environment. A report by the Financial Times [5] highlighted the risks faced by the financial industry during digital transformation, including data privacy breaches and technical failures. The article specifically mentioned that some banks encountered system outages when implementing new digital services, which damaged customer experience and introduced compliance risks. These reports illustrate the specific risks and challenges brought about by digital transformation in various fields and remind enterprises to fully assess and manage these risks when advancing their digital strategies. Of course, digital transformation also has many positive impacts: improving efficiency and responsiveness, enhancing data-driven decision-making capabilities, and strengthening risk management and security. A Bloomberg report from July 2024 [6] discussed the achievements of digital transformation in the financial industry. The report noted that by introducing blockchain technology and smart contracts, some financial institutions successfully improved transaction transparency and security, reduced fraud and compliance risks, and accelerated transaction processing speeds, further enhancing operational efficiency.

2.4. Literature Review Summary

Digital transformation is a critical pathway for modern enterprises to enhance their competitiveness in the face of fierce market competition and technological changes. It builds new business models through new technologies, ideas, and concepts, improving existing work efficiency while also pointing to new development directions for the future. However, digital transformation also brings many risks, which must be timely identified and avoided. Overall, the risks brought about by digital transformation need to be effectively controlled through systematic management and strategies. Enterprises should combine their actual conditions to formulate and implement targeted risk management strategies to fully leverage the opportunities presented by digital transformation and ensure long-term stable development.

Digital transformation is an essential strategy for modern enterprises to enhance competitiveness and optimize operational efficiency. While it presents numerous opportunities and reduces some of the existing risks, it also introduces a series of new operational risks. These risks involve multiple aspects, including cybersecurity, data privacy, technology dependency, and compliance. The following sections will explore in detail the specific changes in enterprise operational risks during digital transformation and their corresponding mitigation strategies

3. Advantages of Digital Transformation in Enterprise Operations Management

3.1. Operational Efficiency and Process Optimization

In traditional business models, manual operations and paper-based records often lead to inefficient processes, high error rates, and information delays. Digital transformation significantly enhances operational efficiency through automation and process optimization, reducing human errors by automating tasks (such as using ERP systems and RPA robots to minimize manual interventions, thereby lowering risks associated with human errors) and mitigating information delays (digital tools offer real-time data analysis and information sharing, reducing the likelihood of decision-making errors and business delays caused by outdated information).

3.2. Financial Risk Management

Traditional financial management methods often involve cumbersome manual accounting processes and report generation, which are prone to errors and time-consuming. Digital transformation introduces financial management software and systems that reduce errors in financial reporting. Automated financial systems diminish the likelihood of manual input errors, enhancing the accuracy and reliability of financial data. Moreover, compliance risks are reduced [8] (digital financial systems can automatically track and apply the latest accounting standards and tax regulations, minimizing financial risks associated with non-compliance).

3.3. Data Management and Decision Support

Traditional data management methods rely on paper records and offline analysis, leading to slow data processing and increased error potential. Digital transformation, through big data analytics, data warehousing, and intelligent analysis tools [9], makes data management and decision support more efficient. Data integration [11] (data warehouses and integration platforms consolidate data from various sources, reducing the risk of inconsistencies due to data silos) and decision support (intelligent analysis tools and predictive analytics provide more accurate market trends and business insights, thereby lowering operational risks caused by insufficient decision-making or lack of information).

4. Challenges of Digital Transformation in Enterprise Operations Management

4.1. Cybersecurity Risks

Digital transformation has accelerated the flow and concentration of data and information, significantly increasing cybersecurity risks. As enterprises implement technologies like cloud computing, the Internet of Things (IoT), and big data analytics [7], they face heightened risks of cyberattacks and data breaches. Cybersecurity threats, such as hacking, malware, and ransomware, are becoming increasingly complex and varied. To address these challenges, enterprises need to adopt comprehensive cybersecurity measures, including: Encryption Technology: Encrypting sensitive data to ensure the security of information during transmission and storage. Multi-Factor Authentication: Implementing two-factor or multi-factor authentication to make unauthorized access more difficult. Security Audits [10]: Conducting regular cybersecurity audits to identify potential security vulnerabilities and promptly address them.

4.2. Technology Dependency Risks

Digital transformation has led to a high degree of reliance on various technological systems and platforms in business operations [11]. This dependency implies that any failure or disruption in critical systems could potentially halt business operations. Strategies to mitigate these risks include: Backup and Recovery Plans: Developing detailed system backup and data recovery plans to ensure quick restoration of business operations in the event of system failures. Redundant Systems [12]: Establishing redundant systems and failover mechanisms to reduce the impact of single points of failure. Vendor Management: Building stable partnerships with technology vendors to ensure the reliability and continuity of technical services.

While digital transformation reduces many risks associated with traditional operational models by introducing automation, data analytics, and intelligent systems that enhance operational efficiency and accuracy, the operational risks it introduces must be thoroughly assessed and managed by enterprises. By strengthening cybersecurity, protecting data privacy, managing technology dependencies, and ensuring compliance, enterprises can reap the benefits of digital transformation while mitigating operational risks, ultimately achieving sustainable development.

5. Conclusion

Digital transformation, through the adoption of new technologies and innovative concepts, has enhanced the competitiveness and operational efficiency of enterprises, while also mitigating some of the existing issues in business operations. However, it has also introduced a series of new operational risks. To fully leverage the opportunities brought by digital transformation and achieve long-term stable development, enterprises should develop comprehensive risk management strategies. These strategies should include strengthening cybersecurity, managing technology dependencies, protecting data privacy, and ensuring compliance. In summary, digital transformation is a double-edged sword: it brings progress, but it also poses new challenges. Enterprises need to effectively address these risks through systematic management and strategies to ensure the smooth implementation and sustainable development of digital transformation. However, due to the limited scope of this paper, the breadth of reference materials, and the superficial nature of the discussion, the analysis of the current state of digital transformation remains somewhat cursory. The summary is not exhaustive and lacks a comprehensive listing of all existing risks, focusing instead on a few potentially representative ones, which introduces certain limitations. Future research will delve deeper into the risks associated with digital transformation, exploring how to promptly identify these potential risks and develop rapid, reasonable countermeasures to ensure a smoother and more seamless transition during the digital transformation process.