The Impact of Digital Transformation on Costs in the Egyptian Companies: An Empirical Study

Document Type : Original Article

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Faculty of Commerce, Cairo University, Egypt.

Abstract

This paper examines the impact of Digital Transformation (DT) on costs using a panel of 30 Egyptian companies listed in the EGX100, employing the panel-corrected standard error (PCSE) methodology over the period from 2010 to 2023, resulting in a total of 420 firm-year observations. The study found that the four dimensions of DT: Internet of Things (IoT), Cloud Computing (CC), Big Data Analytics (BDA), and Robots (R) reduce costs in these companies. Specifically, industrial companies listed on the Egyptian Stock Exchange exhibit significant cost reductions due to DT. DT eliminates inefficiencies in traditional companies and improves internal and external collaborations. This enhances operational performance, profitability, and competitive positioning. Digital transformation enhances a company's ability to predict future scenarios and outcomes, thereby improving decision-making and the efficient utilization of resources.

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