Thursday, June 15, 2017

The New Book “Digital Capability” Chapter 3 Introduction: Digital Capability Development

The digital capability is modular, dynamic and nonlinear, having many visible and invisible business elements, for improving organizational competency and enabling business strategy.

Digitalization opens a new door and connects within department silos, across the walls, across the streets, across the seas, and across the planet. From an ecological perspective, in order for an organization to be sustainable, it must be compatible with its environment, the basic business functionality for the business’s survival is no longer sufficient for building a sustainable digital organization. In fact, there may be many elements of digital capabilities that are foundational for almost any foreseeable digital strategy so implementing them could be viewed as a valid preparatory first step in readiness for a strategic opportunity when it is recognized. Thus, to prepare for the unprepared circumstances, organizations need to learn how to craft digital capabilities which are more dynamic, nonlinear, and have the recombinant nature, built to change, with the goal to lead a capability-based digital transformation smoothly.

Five ingredients in business capability - Process, Knowledge, Technology, Talent, Measurement: Business capabilities are fundamental pillars to achieve the corporate strategy. The enterprise consists of a set of capabilities. The organization then use these capabilities to understand its environment, create new products/services and then deliver them seamlessly. Capability can be mapped to the processes that instantiate the capability, the technology used, the information required. Knowledge is an asset to every organization and its integrity, availability, and confidentiality can be crucial to how the organization functions or maintains its services and products. Business initiatives and digital transformation today nearly always involve some form of technology implementation or information analysis. Digital IT is the integrator and superglue to recombinant dynamic business capabilities. Without them, strategy execution cannot be sustained. The digital business is also about leveraging social technologies and collaboration platforms to amplify collective human capabilities, achieve collective performance and share economic prosperity.

The digital capability has a dynamic and “recombinant” nature: The business environment organizations find themselves in today is especially difficult as compared to years past, Competition is fierce and in many industries, products are becoming more commoditized putting pressure on pricing, margins, and investable budget dollars. So, building capabilities becomes a constant process irrespective of the economic conditions. The well-run digital organization needs to do this under all circumstances. The technological advancement will continue to help develop the integral and dynamic digital capability and in fact, the emerging digital technology is the most important element in the new breed of digital capabilities which are rigor, but not rigid, standardized, but not lack of innovation, mosaic, but not lose the focus, and it can be built dynamically to adapt to changes more seamlessly.

There are different types of roadmaps for building digital capabilities and implementing strategy: A roadmap shows the time sequence of a strategy, then by default the strategy is the main supporting artifact that provides direction. The roadmap is the outcome to mind gaps between TO-BE and AS-IS. You can define any type of roadmap with the business context by doing the exercise of developing a “To Be” state first, then defining the strategic roadmap based upon the fallout of what has been discovered from that exercise. What you need in order to define your starting point, your end state, and how to get there is completely dependent on the digital journey you want to take. Creating a comprehensive digital roadmap to bridge the “gap of opportunity” between where you are and want to become is a welcomed challenge. Building an enterprise digital capability-mapping roadmap can help digital leaders drive business transformation in a structural way.

The digital capability is modular, dynamic and nonlinear, having many visible and invisible business elements, for improving organizational competency and enabling business strategy. The right set of scalable, coherent, and impactful capabilities directly contribute to the business maturity and success for gaining the short-term business benefit and long-term winning proposition.


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