Digital Strategy Research Essay: Effects of difficult capabilities

Digital Strategy Research Essay: Effects of difficult capabilities.

Topic 1: Discuss digital capabilities and analyse how they affect digital strategy.

Introduction An organisation must consider and strategies the right digital platform for investment. As majorly organisations are concerned about investing for the application new technology on existing products, process and practices. In such way digital strategy becomes futile and turns more into IT strategy which is more associated with the overall performances of organisation. Digital strategy is the ability of technology to propel and raise the human performance ability. According to Morgan and Davies (2018) human performances is the major attributes of digital transformation and helps to create the value that leads to revenue generation. Levallet and Chan (2018) defined digital strategy as a form of strategic management and business answer for digital questions. However organisation must consider its digital capabilities before confirming any digital strategy. Digital capabilities are the skill, knowledge along with the understanding that helps and organisation to gain competitive advantages in digital age. In other words digital capability is the ability that helps organisation to prepare digital strategies. Purpose of this essay is to analyse affect of digital capabilities on digital strategies of organisation. First section of the Digital Strategy Research Essay helps to analyse the key concept of digital capabilities and its effect on digital strategies and gradually next section of the essay highlights different issues, problem and challenges of digital capabilities that organisation might encounter.

Final section of this Digital Strategy Research Essay discusses about how digital capabilities can be enhanced in near future under the emerging trends.

Literature review According to Ardolino et al (2018) digital capabilities is the skill that helps us to apply technology appropriately in different space and situation based on the need of technology. Digital capabilities help organisations to enhance their communication strength with employees and helps with both vertical and horizontal growth. Employers are majorly looking for digital capabilities of employees that help employees to apply technologies to perform organisational tasks. Tasks like creating spread sheet, PowerPoint presentation, and communication via email or social media are some of the most common task that can be performed with the application of digital capabilities. Organisations are looking for employees who are capable of applying technology to be creative, access information, resolve problems, communicate wisely, learn and support their digital space.

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According to Kane et al (2017) who is referred in this Digital Strategy Research Essay organisation must think about how they could increase their digital capabilities in order to be prepared for emerging digital world. Digital capabilities allow employees to work with computer more than the traditional way. According to Drivas et al (2017) digital capability is the critical use of information technology for performing work in a better way. With the use of basic digital tools organisation can easily perform their basic functions that helps organisation with growth and sustainability.

In order to compete in this digital world organisation must ensure that they invest on the best technology available in the market and utilise that new technology with the help of existing digital capabilities of employees to perform basic tasks.

Digital capabilities have strong impact on the way organisation take digital strategies. Digital strategies can be successfully executed with the help of digital technologies.

According to Booth et al (2016) whose work is referred in this Digital Strategy Research Essay, digital strategies emphasizes on the use of technology to improve business performances by either creating new product or developing the performances of existing products. With the help of digital capabilities organisation adopt new digital strategies that allow organisation to use the technological infrastructure for better growth and performances. Digital strategies majorly include changes in business models and bring innovation in existing system. According to Kiron et al (2016) unless organisation has digital capability, it will not be able bring innovation in system. Organisation must understand existing digital capabilities of their employees before adopting any new digital strategies.

Changes in system require adequate planning from the part of both management and employees and that is possible with the help of digital capabilities. For example employees must be aware of the fact that how new information technology is working and the right way to use the new technology in order to produce the desired results.

According to Yeow et al (2018) organisation often get confused between digital strategy and business strategy. For most of the organisation adopting new business tools for business functions is similar to adopting of new digital strategy. However, adaptation of new tool is mere a business strategy which can help with better production but do not affect the overall business growth. On the other hand adaptation of new information technology can have impact on both production and customer satisfaction simultaneously, thus it can be considered as digital strategy. Though, performance of the new information technology depends on the digital capabilities of the organisation.

Morrison and Rooney (2017) opined that digital strategy is application of digital technologies in business models to form new business capabilities. Modern business organisations are applying technology to develop their business more hardware and software. With the existence of strong digital capabilities, organisation becomes strong and move future in the journey of digital transformation.

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One important aspect of digital strategy which organisation must remember that digital strategy helps organisation to create a roadmap for the whole transformation journey of organisation. While organisation can make many small changes during the journey process but there should not be any changes in the roadmap. This suggests organisation must be aware of why the company need the transformation. This is only possible when employees have clear vision about the digital transformation and they are capable of using technology for more than regular work.

For example, digital strategy of a company is to keep a track of the sale of productivity software that the organisation has already developed and used for internal purposes. The first strategy which the organisation can adopt is to package it as a mobile application and sell it to individual customers.

However, after evaluating the response organisation decides to sell the software to business organisation to gain more profit from than selling it to individuals. The ultimate planning of selling software did not change but organisation change the plan to sale software from individual customers to business house. This is a big strategy which requires adequate support by the existing employees.

Though, this change in plan comprises risk but taking appropriate decision based on the need of the company can help the organisation with growth and stability.

Digital strategies are majorly adopted for digital transformation that bring changes in three major business areas and those are customer experience, operational process along with business model.

According to Peppard and Ward (2016) the process of digital transformation need combined effort from the part of organisation and management must put effort to bring changes in organisational culture. On contrary digital strategy majorly focus on technology not on organisational culture. Digital strategies are majorly associated to bring changes in business model and apply digital technology to develop capabilities that business organisation require to transform business into a digital business.

Developing a business strategy is the key aspects of the entire transformation and digital capabilities are applied to ensure it suits the business goals.

Digital strategy search for activities and processes which need to be changed in order to ensure better customer service and digital capabilities of employees ensure those activities and processes are performed in right manner. Choosing leaders who are capable of managing the transformation and implement the digital strategy is very much important for organisation to initiate digital transformation.

According to Morrison and Rooney (2017) digital strategy have different concept for every individual. For instance digital strategy for a marketing executive will be using social media channel for marketing process. On the other hand an operational executive will look into digital strategy as a process of data collection. Therefore, there are differences in the way people look at digital transformation. However, there are certain challenges with digital capabilities that directly and indirectly impact digital strategy which would be discussed in the next section.

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Challenges, problems and issues While developing digital strategy organisations face various issues and problem regarding the same and in order to continue with the transformation, organisations must identify challenges that may hinder the process. Along with that understanding existing digital capabilities are equally important.

There are various major issues that could hinder the development of digital strategy, such as lack of tactical plan. Most of the companies prepare initial digital transformation roadmaps which are majorly developed for short-term goals and these are not easy to translate into long term goals.

Therefore major plans which are developed for digital strategy lack right planning and execution. The second major issues with digital strategy is organisations develops new business agenda however, continue to use traditional indicator to measure new agenda rather that developing new KPI's that are able to measure the performance of new business strategy (Freitas Junior et al., 2016).

Major issues which organisations face during digital transformation are organisational structure.

Traditional organisational structure, culture and processes like waterfall plays major role in slow down the entire transformation process. Further, people within a hierarchical organisational structure have less understanding of digital platform as they are majorly dependent of higher level manager for their decision making; hence adaptation and execution of digital strategies are limited in traditional organisational structure. Another major challenge that organisations face with digital strategy is lack of digital capabilities among employees. According to Yeowet et al (2018) digital capabilities is a blend of technology, talent and process that affects the value of digital strategy. Therefore, lack of digital capability can directly affect digital strategy.

However, along with issues regarding digital strategy, company faces major crisis with digital capabilities. Experts called this as tech skill deficit. Considering the current working pattern and emerging demand of digital strategy, global organisations are major facing crisis regarding digital capabilities. Demand of digitally capable employees continues to grow and lack of skill is actually causing extra cost for employers, as organisations are paying higher salary and hiring temporary resources that are digitally capable. This growing demand of digitally capable employees is creating major challenges for organisations. Previously, organisations used to look for employees who are capable of performing major operational task along with their special task however that has been changed with the concept of digitalisation. Now, organisations look for employees who are digitally capable, this suggest employees must be able to used digital platform in efficient way. In this process recruiter are finding it difficult to select and recruits candidates who are digitally capable. Further this is impacting the entire hiring process. HR department of every organisation has their own set of recruitment policy which is not enough to hire candidates who are digitally capable. As a result organisations are adopting new set of recruitment policies, which is not only time taking but also adding additional cost to the recruitment process.

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Naturally lack of digitally capable candidates is creating a gap between the number of employees required and the actual number of employees. This is automatically creating major problem for digital strategy as employees are failing to adopt the right digital strategy due to the lack knowledge and skill. de Reuver et al (2018) opined that along with finding the right or digitally capable candidate for organisation, providing training to the new candidate or employees are equally challenging for organisations. Due to the high demand of digitally skilled candidate organisation often hire candidate from non-technical background who have less understanding about digital strategies. Thus, those candidates require training to develop their skill. This technical training adds additional cost to the company and candidate remains non-production during the training phase. Therefore, soon after hiring candidates, organisations do not start earning profit from them and need to wait for a long time before start gaining profit.

Along with developing the skill of new hired candidate, organisations also need to understand how they can develop the skill of existing employees which are extremely important for the overall growth of organisation. Employees, who are working under traditional method, often find it difficult to keep the pace with digital transformation. For those employees, adopting new digital skill and knowledge is not only difficult but also impossible without the support of experts training .

For modern organisation, which are looking for utilising digital capabilities for business growth by adopting new digital strategy, understanding market need and demand regarding technology is equally relevant. For example, some organisation adopt AI (Artificial Intelligence) without proper understanding of the need of AI within the organisation and further lack of skill and knowledge among employees regarding AI platform makes the entire strategy futile. For instance, an organisation planned to implement AI platform for providing automatic response to customer, however lack of knowledge regarding AI functionality made the employee believe that AI enable platform are capable of understanding human emotion and hence it is capable of resolve customer grievances. So, they started depending of AI enable system to resolve every query of customers. In such situations, organisation fails to respond appropriately for customer queries and this happens due to lack of digital capabilities of employees.

Freedom of experiment during adoption of digital strategy could be risky for any organisation.

Employers often allow their employees to experiment with task in order to develop new thing.

However, lack of digital skill and knowledge can lead the entire process into a wrong direction.

Nambisan et al (2017) stated that in order to adopt the right digital strategy organisational must evaluate the existing digital capabilities of employees.

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Conclusion From the above discussion in this Digital Strategy Research Essay it can be concluded that modern organisation is facing a crisis regarding digital capabilities. In the current digital market there is a high demand of digitally skilful and knowledgeable employees who are capable of adopting the right digital plan or strategy for the organisation.

This Digital Strategy Research Essay reveals that digital capabilities are the skill and knowledge that employees should have in order to make the organisation successful in the digital age. It was observed in this Digital Strategy Research Essay that this has direct and long term affect on digital strategy that company adopt to develop operation process, customer service and to change business model. Above discussion emphasises on the fact that in the age of digitalisations organisations are constantly adopting strategies which are connected with information technology. For instance marketing executives are operating through social media channel to develop their existing business network.

Therefore, marketing executive must have proper skill and adequate knowledge about how to utilise social media platform for spreading their network. Without, the skill and knowledge, idea of using social media channel would go futile. From the above analysis in this Digital Strategy Research Essay, it can be found that adaptation of right digital strategy, employee hiring and employee training are three major challenges that modern organisations are facing in this age of digitalisation.

Considering the current market situation in this Digital Strategy Research Essay, it can be stated that, in near future, major task of the organisation would be performed with the help of digital capabilities of employees. Thus, organisations must prepare right roadmap for their future growth which included development of digital skill and knowledge of employees, so that employees adopt and execute right digital strategy.

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References Ardolino, M., Rapaccini, M., Saccani, N., Gaiardelli, P., Crespi, G. and Ruggeri, C., 2018. The role of digital technologies for the service transformation of industrial companies. International Journal of Production Research, 56(6), pp.2116-2132.

Booth, A., Mohr, N. and Peters, P., 2016. The digital utility: New opportunities and challenges. McKinsey. com, May. de Reuver, M., Sørensen, C. and Basole, R.C., 2018. The digital platform: a research agenda. Journal of Information Technology, 33(2), pp.124-135.

Drivas, I., Stüber, J., Das, J. and Han, S., 2017. The University Business Incubator: Exploring Digital Capabilities while using Information as an Asset.

Freitas Junior, J.C., Maçada, A.C., Brinkhues, R. and Montesdioca, G., 2016. Digital capabilities as driver to digital business performance.

Kane, G.C., Palmer, D., Phillips, A.N. and Kiron, D., 2017. Winning the digital war for talent. MIT Sloan Management Review, 58(2), p.17.

Kiron, D., Kane, G.C., Palmer, D., Phillips, A.N. and Buckley, N., 2016. Aligning the organization for its digital future. MIT Sloan Management Review, 58(1).

Levallet, N. and Chan, Y.E., 2018. Role of Digital Capabilities in Unleashing the Power of Managerial Improvisation. MIS Quarterly Executive, 17(1).

Morgan, B. and Davies, A., 2018. Balancing innovation and routine action: the microfoundations of digital capabilities.

Morrison, C. and Rooney, L., 2017. Digital Strategy: Leading the Culture Change in Health and Care.

Nambisan, S., Lyytinen, K., Majchrzak, A. and Song, M., 2017. Digital Innovation Management: Reinventing innovation management research in a digital world. Mis Quarterly, 41(1).

Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley & Sons.

Yeow, A., Soh, C. and Hansen, R., 2018. Aligning with new digital strategy: A dynamic capabilities approach. The Journal of Strategic Information Systems, 27(1), pp.43-58.

Yeow, A., Soh, C. and Hansen, R., 2018. Aligning with new digital strategy: A dynamic capabilities approach. The Journal of Strategic Information Systems, 27(1), pp.43-58.

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