A digital strategy can be stated to as a form of significant strategic management and a proper business response to the digital question that is being addresses as the part of an entire business strategy (Setia et al. 2013). This digital strategy is being characterized by an application of newer technologies to the existing business activities. The following essay focuses on a brief discussion on the broad topic that organizations are developing various digital capabilities to effectively harness the emerging innovation opportunities. The organizations often get several significant advantages after being more marketing as well as customer focused (Hirt & Willmott 2014). The most noteworthy and important examples of customer focused and marketing efforts are web sites, search engine optimization, electronic commerce, mobile, advertising and social media. This essay will be providing a critical analysis on the process that organizations utilize to develop digital capabilities for harnessing emerging innovation opportunities.
Digital capability is referred to a term that is used for describing the major skills and opportunities, which an organization require while thriving the current world (Karimi & Walter 2015). The capabilities of the individuals are being considered until which the infrastructure and culture of the organization is enabling and motivating digital practices. Digital capabilities can be eventually developed or built by defining six elements in an organization for organizational members and these six elements are as follows:
iii) Digital Creation, Innovation and Problem Solving: This is yet another important and significant element of digital capability. The organizational members should be able to digitally create, innovate and even solve the problems effectively and efficiently (Nylén & Holmström 2015). This type of creativity can easily enhance the organizational effectiveness to a high level and they would be able to harness innovation eventually.
Digital capabilities are extremely important and significant for each and every company as they are responsible for eradicating the complexities of digital innovation effectively and efficiently (Bharadwaj et al. 2013). There are some of the core and noteworthy reasons that state that digital capabilities are important for any company. These reasons that help to understand the importance of digital capabilities in companies are as follows:
iii) Better Collaboration: The third reason for digital capabilities being effective for companies is its better collaboration (Yeow, Soh & Hansen 2018). Digital channels are being used for getting connected on a regular basis and thus it is observed that connectivity for collaboration is increasingly massively.
vii) Listening and Synthesis: The seventh reason to understand the importance of digital capability in any company is listening and synthesis. The utilization of digital platforms for curating monitoring and collating into meaningful collection of information is a discrete part of this digital capability.
viii) Professional Development: Finally, digital capabilities are responsible for the enhancement of professional development. Lyon et al. 2016 state that, the digital channels such as social networks eventually represent a proper flow of professional development potential. The organization can easily learn and then present flow of social media that has generated the professional development.
The above mentioned eight reasons clearly state that the digital capabilities are extremely important or vital for the organization since it can easily bring innovation and creativity in the business without much complexity and hence organizational efficiency is increased.
The business strategy is influenced only after leveraging the digital resources for creation of differential values. Hence, the traditional organizational strategies are being reshaped into cross functional, distributed, globalized and modular business processes and operations (Venkatraman et al. 2014). There are several distinctive approaches for conduction of a digital strategy and the major opportunities and challenges are being identified in the process within any particular business. The competitor analysis is one of such significant opportunity that should be done with digital strategies. This type of analysis involves subsequent evaluations of the organizational major competitors or potential substitutes so that they are able to understand the organizational strengths and weaknesses. It even helps in focusing on the enablement of every new digital capability to the respective business. A specific digital strategy could be easily formulated as well as deployed with few different approaches. This type of formulation even involves the core procedure to specify the opportunities, goals, vision and any related activity of an organization for the core purpose of maximizing the benefits of that particular business (de Reuver, Sørensen & Basole 2018). These types of benefits could even range from the focus of an enterprise that considers the major risks and opportunities created by digital strategy. Better collaboration, service optimization, customer intelligence, governance and innovation, enterprise technology processes and architectures are the main opportunities are being included for an enterprise.
The companies that develop digital capabilities within their business get the opportunity to harness the emerging innovation and creative opportunities. According to Helfat and Raubitschek 2018, there are some of the major steps that are required to complete the entire process of developing digital capabilities for harnessing innovation in an organization and these steps are as follows:
Vision and intent of the company even facilitates the collaboration of organizational members, who have interest or role for development of digital capability after inclusion of digital infrastructure of the company and human resources team (Barrett et al. 2015). The outcome of this particular step of vision and intent would be proper identification or formation of the stakeholder group who would direct the overall development of organizational digital capabilities with the support from the identified seniors. There would even be an establishment of the shared understanding, goals and common purpose.
iii) Exploring and Contextualization: The third significant and important step in this process of developing digital capabilities is exploration and contextualization (Hirt & Willmott 2014). The major indicative responsibilities involve reviewing of digital capability’s framework and the six elements’ model for every organizational member. Opportunities for developing the digital attributes eventually make the clearly posted with links for supporting resources (Weill & Woerner 2015). After execution of this particular step, the organizational strengths as well as weaknesses are properly recognized as well as recorded against the ideal and real world requirements.
Conclusion
Therefore, from the above discussion, it can be concluded that digital strategy is one of the major and the most significant part of business strategy and the experts maintain it to be effective and successful for building independently. The digital capabilities or strategy could be easily developed by four steps of identification of opportunities and challenges in the business, in which online assets could provide relevant solutions, identification of the unmet requirements as well as objectives of every external stakeholder, which closely aligns with the business opportunities and challenges, development of a vision around how these online assets would be fulfilling the business or external stakeholder requirements, goals, opportunities and challenges and the final step is prioritization of a set of online initiatives that could easily deliver on the vision. The above provided essay has clearly outlined a detailed research on organizations developing digital capabilities for the purpose of harnessing the emerging innovation opportunities with relevant details.
References
Barrett, M., Davidson, E., Prabhu, J. & Vargo, S.L., 2015. Service innovation in the digital age: key contributions and future directions. MIS quarterly, 39(1), pp.135-154.
Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. & Venkatraman, N., 2013. Digital business strategy: toward a next generation of insights. MIS quarterly, pp.471-482.
Daub, M. & Wiesinger, A., 2015. Acquiring the capabilities you need to go digital. McKinsey Global Institute.
de Reuver, M., Sørensen, C. & Basole, R.C., 2018. The digital platform: a research agenda. Journal of Information Technology, 33(2), pp.124-135.
Galante, N., Moret, C. & Said, R., 2013. Building capabilities in digital marketing and sales: Imperatives for consumer companies. McKinsey & Com-pany.
Helfat, C.E. & Raubitschek, R.S., 2018. Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems. Research Policy, 47(8), pp.1391-1399.
Hirt, M. & Willmott, P., 2014. Strategic principles for competing in the digital age. McKinsey Quarterly, 5(1), pp.1-13.
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