Innovation on business model is not only describing the bundle of products and services but also it is integrated with the input of customer experience. Customer experience should become a key role in developing business model innovation in driving transformational performance. This paper argues that the transformational performance is derived from business model innovation and focuses on customer experience. We use telecommunication firms as our unit analysis with sample of 195 Indonesian ICT firms out of 542 units. The analytical approach and solution technique that is used for analysis is Partial Least Square (PLS). The findings demonstrate that business model played significant role on supporting contribution of customer experience in driving transformational performance. The finding has implication that by synergizing the value proposition of customer experience in a business model innovation, the transformational performance can be maintained through focus on customer experience driven business model innovation. Further study can be explored through additional variable, sample and further study on longitudinal on digital transformation firms.

Industry 4.0 brings a new challenge for incumbent firms to anticipate new business model offered by emerging entries. The digital transformation is required by incumbent to develop innovation on product and service business model based on customer experience orientation. To support this transformation, strong digital leader is important to assure the development of this transformation. The study on the role of digital leadership on business model innovation and customer experience has not been explored, significantly, Hence, this research aims at assessing the role of digital leadership, whether it directly or indirectly influences the customer experience orientation in developing business model innovation. This study was conducted through survey to 88 senior leader respondents from Indonesia telecommunication firms, in which Smart-PLS application was used to analyze the data. The result show that digital leadership had direct and indirect impacts on customer experience orientation in developing business model innovation. The practical implications of these findings are recommended for the senior leader of management of telecommunications industries in In-donesia to strengthen digital leadership capability in conjunction with the development of business model innovation and customer experience orientation. Further research can be explored by expand-ing the sample, industry, statistical application and longitudinal study.