Digital transformation (DT) has become a central strategic priority for organizations navigating global competition, technological disruption, and shifting stakeholder expectations. Although a rapidly growing body of literature links digital transformation to organizational performance, prior studies remain fragmented across industries, methodologies, and theoretical lenses, leaving both researchers and practitioners without a consolidated understanding of what actually drives successful transformation and what continues to impede it. This study conducts a systematic literature review of twenty-five peer-reviewed articles published between 2021 and 2026, drawn from Scopus-indexed journals and sources accessible through Google Scholar, to synthesize the drivers, challenges, and performance outcomes associated with digital transformation in organizational settings. Using a PRISMA-based identification, screening, and eligibility protocol, the review identifies five recurring driver categories, namely leadership, strategic orientation, digital capability, organizational culture, and external market pressure, alongside four persistent challenge categories, namely resource constraints, cultural resistance, technological complexity, and governance gaps. Consistent evidence shows that digital transformation improves performance mainly when mediated by innovation, agility, and employee commitment. The novelty of this review lies in integrating leadership-centered and capability-centered perspectives into a single multi-level framework connecting individual, organizational, and industry drivers to performance outcomes. The study concludes with an integrative conceptual model and an agenda for future cross-industry research.
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