The rapid advancement of digital technologies has fundamentally transformed the operational landscape of higher education institutions globally. This article examines the theoretical and practical dimensions of digital strategy formation within universities and other higher education establishments, with particular emphasis on the strategic management mechanisms that underpin effective digital transformation. Drawing on contemporary frameworks of strategic management in education and insights derived from international practice, the study synthesizes existing knowledge on how higher education institutions conceptualize, develop, and implement digital strategies to enhance educational quality, organizational performance, and institutional competitiveness. The paper explores the core functions and directions of digital strategy, including technology-enabled governance, curriculum innovation, data-driven decision-making, and digital infrastructure development. Special attention is devoted to the alignment between strategic planning processes and digital management systems, highlighting how institutions can leverage structured planning methodologies to navigate the complexities of digital change. The analysis integrates perspectives from strategic management theory and applies them to the educational context, illustrating how administrative leadership, faculty engagement, and stakeholder collaboration contribute to successful digital strategy execution. Furthermore, the article identifies critical success factors and recurring challenges encountered during digital transformation, offering actionable recommendations for institutional leaders and policymakers. The findings suggest that sustainable digital transformation in higher education requires a coherent, institution-wide strategic framework that integrates technological, human, and organizational resources. The article contributes to the growing body of literature on digital governance in education by providing a comprehensive conceptual analysis grounded in recent empirical and theoretical scholarship.