A dynamic information technology capability model for fostering innovation in digital transformation

Abstract

The advent of the digital era has transformed the way businesses create, compete, and maintain their existence, particularly in the aftermath of the COVID-19 pandemic. To maintain resilience in the ever-changing business landscapes of today, especially in emerging economies, businesses utilize dynamic information technology capabilities (DITC) to cultivate organizational capacities that foster innovation. This article argues that Dynamic Information Technological Capabilities (DITC) allows companies to develop flexible and adaptive skills to foster innovation. The results from 684 Brazilian businesses showed that implementing DITC improved their ability to come up with both new ideas and ways to use existing ones. This was possible because DITC improved the firms' dynamic and improvisational skills. The post hoc analysis of FIMIX PLS and PLS-POS reveals that DITC plays a greater role in fostering innovation through dynamic capabilities (DCs) rather than improvisational capabilities. The research on unobserved heterogeneity showed that a high level of DITC hasBig and strong effects on developing dynamic and improvisational skills for coming up with new ambidexterity ideas. The results indicated that companies should integrate the potential of digital technology and information to establish organizational capacities that can effectively compete within developing economies.