Marketing

World Wide Web

Transformative learning

Pedagogy

Computer science

Conceptual framework

Business model

Business

Process management

Database

Leverage (statistics)

Sociology

Artificial intelligence

Conceptual model

Multinational corporation

Finance

Knowledge management

Digital transformation

Machine learning

Dynamic capabilities

Mindset

Social science

Technovation

Industrial firms are under severe pressure to undertake digital transformation and leverage the Industrial Internet of Things (IIoT) and emerging technologies for the integration of industrial machines to share information on a real-time or near real-time basis. Though in recent years researchers have focused their attention on digital transformation, there is limited scholarly guidance for developing capabilities for such transformation. Drawing on dynamic capability theory and exploratory qualitative interviews with senior ‘elite’ executives from five of the world's largest multinational firms, the study outlines a new conceptual framework for digital transformative capability development. The integrative framework demonstrates how the three core capabilities of digital sensing, digital seizing, and digital reconfiguring manifest through associated capabilities of Strategic Sensing, Rapid Prototyping, Organization Structure, Business Model Transformation, and Cultural/Mindset Transformation. Internal and external contingencies are proposed as moderators of the relationship between IIoT and emerging technologies, and digital transformative capability development. Collectively, the article makes the case for Digital Transformation Capability and sheds new light on the digital transformation process. Implications for theory and practice are highlighted, and limitations are discussed.

Digital transformation of industrial businesses: A dynamic capability approach