Digital capabilities refer to the skills, knowledge, and understanding that help organizations gain competitive advantages in the digital age. They affect digital strategies in several ways. First, digital capabilities determine an organization's ability to develop and implement digital strategies. They also impact how employees adopt new digital strategies. However, organizations face challenges related to digital capabilities that can hinder digital strategies. These include lack of digitally skilled candidates and difficulties training existing employees on new digital skills. To successfully execute digital strategies, organizations must evaluate and enhance the digital capabilities of their workforce.

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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
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of Information Technology, 33(2), pp.124-135.
Drivas, I., Stüber, J., Das, J. and Han, S., 2017. The University Business Incubator: Exploring Digital
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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.