Discussion on Companies Developing Digital Capabilities for Harnessing Emerging Innovation Opportunities

This essay discusses how organizations develop digital capabilities to harness emerging innovation opportunities. It explores the importance of digital capabilities in companies and the process of developing them.

Running head: DIGITAL STRATEGY
Discussion on Companies Developing Digital Capabilities for Harnessing Emerging Innovation
Opportunities
Name of the Student
Name of the University
Author’s Note:

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1. Introduction
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.
2. Discussion
2.1 Digital Capabilities
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:
i) ICT Infrastructure: The first and the foremost element for digital capability is ICT
infrastructure. It refers to the information and communication technology systems and infrastructure
like networks, firmware, hardware and software for providing effective and efficient competitive
advantages to the organization (Nambisan et al. 2017). The major components of the information
technology are being provided by this particular element of digital capability. IT services are being
developed, tested, delivered, monitored, controlled and even supported.
ii) Information, Media and Data Literacies: The second important and significant core
element of digital capability is the information, media and data literacy. These above mentioned
literacies would be extremely important for the organizational members so that they get knowledge
about digital information, digital media and digital data (Weill & Woerner 2015). This will be
increasing the organizational productivity to a higher level and thus organization would be gaining
major competitive advantages.
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

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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.
iv) Digital Communications, Collaborations and Partnership: The fourth significant and
core element of digital capability is digital communications, collaborations and partnerships (Tan et
al. 2015). The respective organization should be able to communicate as well as collaborate with the
other organizations and even form partnerships so that it becomes easier for them to understand the
current market situations and customer demands.
v) Digital Learning as well as Development: The organizational members should be able to
acquire digital learning for successfully developing digital capability in an organization (Lyytinen,
Yoo & Boland Jr 2016). Innovation and creativity are majorly harnessed in this process and the
organization is upgraded to an advanced level majorly.
vi) Digital Identity and Well Being: The sixth or the final core element of digital capability is
digital identity and wellbeing. Hence, the information is being used by a computer system to represent
an external agent. The organizational members would be able to learn about their protection of digital
identities.
Figure 1: Digital Capability Framework
(Source: Daub & Wiesinger 2015)
2.2 Importance of Digital Capabilities in Companies
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

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capabilities are important for any company. These reasons that help to understand the importance of
digital capabilities in companies are as follows:
i) Better Employability: The first and the foremost reason that describes that digital capability
is extremely important and significant for the companies is that it provides better employability. Any
organization, which has the ability to use digital technologies, eventually get a better chance to have
positivity in the employability after being impacted on the entire capabilities with every digital thing.
ii) Identity and Leadership: As per Iansiti and Lakhani 2014, the second reason, which
describes that this digital capability would be extremely important for each and every company is
identity and leadership. The extension of leadership into the digital space and then forging a specific
purposeful digital identity is not a mandatory activity.
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.
iv) Connection and Community: Connection as well as community is yet another important
and significant reason that states that the communities of engagement and practice eventually occupy
all the parts of the business and building, sustaining and finally creation of communication is both
expansive and social.
v) Assisting and Learning: According to Matt, Hess and Benlian 2015, the next important
and noteworthy reason that is required to be considered while understanding the importance of digital
capabilities within any organization and organizational members is assisting and learning. The digital
tools are worthwhile when they are being utilized in subsequent methods. The organizations can use
digital capabilities to enhance the practice of assisting and even crating newer pathways for better
learning.
vi) Critical Thinking: This is yet another significant reason, which is needed to be considered
for understanding the importance of digital capabilities within any organization is critical thinking
(Daub & Wiesinger 2015). The significant capacity for evaluating, distilling and opining on the digital
resources is one of the important capability for employees to follow critical reflection.
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.

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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.
2.3 Process of Companies Developing Digital Capabilities to Harness Emerging Innovation
Opportunities
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:
i) Vision and Intent: The first and the foremost step in this process of developing digital
capabilities is establishment of vision and intent for the company that can easily and promptly drive
forward the focus for better execution of organizational processes and operations. One of the major
indicative responsibilities as well actions for the senior leaders of organization is working with

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stakeholders for the purpose of identifying the vision and even rationale to develop the digital
capabilities (Kane et al. 2015). Moreover, the process of focusing on what is to be achieved and
procedure of the digital capabilities contributing to the vision and aligning the aspirations for digital
capabilities with any other initiative, priority and policy for identification of digital capabilities for the
purpose of enhancing the reputation and performance of the company are also considered in this
process.
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.
ii) Designing and Constructing: The second distinct and noteworthy step in the procedure to
develop the digital capabilities is designing and constructing. This particular step support mechanisms
for bringing the vision or intent that are established in the first step. The indicative responsibilities of
this step includes promotion of concept of digital professionalism to the organizational members for
encouragement of undergoing digital means and reviewing data from the organizational surveys,
which are responsible for capturing information relevant to these digital capabilities (Galante, Moret
& Said 2013). The outcome of this step is to understand the digital professional in each and every
department and hence establishment of service and program priorities. The digital capability is being
embedded in the curriculum activities of the respective organizational members.
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.
iv) Supporting and Consolidation: The final and the fourth step in the process of developing
digital capabilities within companies for harnessing innovation and creativity is supporting and
consolidating (Iansiti & Lakhani 2014). The major and the most significant responsibilities of this
particular step is to review and evaluate progress against the set of goals, reporting on the progress
with core help of utilizing established reporting structures and processes and informal communities
and networks of practice, reviewing the mechanisms for the purpose of monitoring as well as

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evidencing the success after amending or updating the mechanisms as per required and finally
gathering the case studies or distinct examples of the best-practice distribution on what has been
worked or lessons have been learned. The organizations should establish and support networks in both
internal and external environment for making use of the existing channels, in which they eventually
exist. The major outcomes of this particular step involve enhancement of organizational reputation
and staff empowered for making best use of digital technology in the organization (Yeow, Soh &
Hansen 2018). Moreover, it is also helpful to develop the digital skills of organizational members for
leading, inspiring and enhancing the digital capabilities and involving more effective utilization of
digital tools within the core business functionalities.
3. 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.

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