The Role of Dynamic Capabilities in Reconfiguring Operational Capabilities for Digital Business Transformation

Abstract

As digital technologies development continues, the risk for existing business in all industries increases due to the new innovated, digital-based products and services that are changing market conditions. Digital transformation strategy enables incumbent firms to keep their existence in the digital era. However, firms need first to assess their readiness for digital transformation strategy requirements. The lack of agreed model that explains the process of digital transformation strategy in general and on firm’s readiness for this strategy were enough justifications for the researcher to conduct this study. The researcher fills this gap by proposing new model for digital transformation readiness. The study also examines a mediation role for dynamic capabilities in reconfiguring operational capabilities in a firm so that to enhance its readiness for digital transformation strategy. The findings of this research shall empirically validate the proposed model and it will reveal the role of dynamic capabilities in improving firm’s digital transformation readiness. The research indicates that dynamic capabilities are developed by other organizational capabilities such as culture values and ICT capabilities. It also points to the essential role of dynamic capabilities in adapting operational capabilities for any market change. Organizations shall prepare themselves for digital transformation strategy by focusing on developing capabilities needed for this strategy to reduce the risk of failure. The proposed model can be considered as a significant contribution in the area of the digital transformation strategy. The model in practical wise will help managers to assess their firm’s readiness for digital transformation strategy and fill any gap identified. The proposed model for digital transformation readiness is recommended to be further extended to include more effecting factors including technological and environmental factors.