The Effect of Employees’ Artificial Intelligence Competency on Improving Efficiency in Service Organizations: The Mediating Role of Digital Literacy

Objective: Technological advancements and the growing adoption of artificial intelligence (AI) in service organizations have fundamentally transformed traditional service delivery models. The utilization of AI technologies can enhance service efficiency, optimize work processes, and improve decision-making quality in service-oriented organizations. However, the success of AI implementation largely depends on employees’ level of digital literacy, which enables them to effectively use intelligent tools. Accordingly, this study aims to investigate the effect of AI technology adoption on service efficiency in service organizations, emphasizing the mediating role of employees’ digital literacy. Public libraries are examined as a case of service organizations.
Methodology: The present research is applied and conducted using a survey method with a descriptive-analytical approach. The statistical population of this research consists of 130 librarians working in 72 public libraries in Markazi Province, all of whom were studied. Ultimately, 120 individuals responded to the questionnaire. Data were collected using questionnaires on artificial intelligence adoption (Carlos et al., 2023), librarians’ digital literacy (Amin et al., 2021), and library service performance (Panahi, 2023). Construct validity, both convergent and discriminant, was confirmed through structural equation modeling, and reliability was assessed using Cronbach’s alpha coefficients. Data analysis was conducted using SPSS 25 and SmartPLS 3.3.
Findings: The results obtained from the structural equation modeling (SEM) indicated that all research hypotheses were confirmed. First, the adoption of artificial intelligence technology had a direct, positive, and significant effect on library service efficiency (β = 0.500, p < 0.001). This means that the more librarians use intelligent tools in their daily workflows, the greater the increase in the speed and accuracy of service delivery. Second, AI adoption exerted a very strong and significant impact on librarians’ digital literacy (β = 0.638, p < 0.001), suggesting that practical exposure to emerging technologies itself acts as a powerful driver for learning and enhancing digital skills. Third, digital literacy also had a direct and significant influence on service efficiency (β = 0.256, p < 0.001); in other words, librarians with higher levels of digital literacy are better able to leverage AI capabilities and provide more efficient services. Most importantly, the mediating role of digital literacy in the relationship between AI adoption and service efficiency was confirmed (β = 0.163, p < 0.001). This finding clearly demonstrates that the indirect effect of AI adoption on service efficiency through the enhancement of digital literacy is distinguishable from, and complementary to, its direct effect. In other words, in organizations where employees lack sufficient digital literacy, even with the technical adoption of AI, no significant improvement in service efficiency will occur.
Conclusion: The present study empirically proved that the adoption of artificial intelligence technology in service organizations such as public libraries achieves its maximum impact on service efficiency only when accompanied by the simultaneous enhancement of employees’ digital literacy. Indeed, digital literacy serves as a critical mediating variable, acting as a bridge between technological infrastructure and the ultimate performance of the organization. Without these skills, investment in AI not only fails to lead to productivity gains but may also generate hidden costs due to improper use or employee resistance. Based on the findings, the following recommendations are offered to the public library institution of Iran and other service organizations: (1) designing and implementing continuous digital literacy training courses with an emphasis on the practical application of AI in the workplace; (2) developing ethical and practical guidelines for the responsible use of intelligent tools; (3) fostering organizational motivation and a culture based on lifelong technological learning; (4) periodically assessing employees’ digital literacy levels prior to the implementation of new intelligent systems; and (5) utilizing librarians with high digital literacy as peer-training facilitators. Finally, future research could examine the role of other moderating variables such as age, work experience, or type of organization in this relationship, and test the model in different service contexts (e.g., education, healthcare, and banking).