This study explores digital transformation of Azerbaijan higher education institutions in teaching and learning process as well as administrative issues, highlighting the complexities and multifaceted approach. As a result of this critical analysis, we intend to propose a multifaceted approach to digital transformation of Azerbaijan higher education that includes key components such as promoting and aspiring to improve digital literacy among faculty members, incorporating technology into education through utilising digital tools and online resources, and driving innovation through research and development activities. Moreover, the study analyses the key concerns in the digital transformation of Azerbaijan modern higher education and proposes an approach that describes the driving factors of transformational changes as well as their effects. Based on the existing literature, we consider the processes of change in the contexts of globalisation, regionalization, the information society, the Internet revolution, government reforms, downsizing and restructuring, management practices, and the establishment of new funds. In addition, we view increased competition between universities as a dynamic factor influencing the transformation process. The purpose of this study is to shed light on the impact of global and local dynamics on digital transformation and therefore provide information on the growing higher education ecosystem in Azerbaijan.