Revealing your hand: caveats in implementing digital business strategy

Digital business strategies (DBS) offer significant opportunities for firms to enhance competitiveness. Unlike the large proprietary systems of the 1980s, today's allow firms to create and reconfigure digital capabilities to appropriate short-term competitive advantage. In the quest to provide value to customers through digitization, such applications can be efficiently deployed. However, we propose that in the long-term not all digitization is desirable. Indiscriminate digital initiatives through the use of micro-applications by a firm could reveal its hand to competitors and erode competitiveness. We propose that a firm's DBS must balance its system--software, process, and information--visibility with the ability to appropriate value from such systems. Through a visibility-value framework, and examples drawn from practice, this article illustrates the tradeoffs involved in making these choices as the firm traverses a dynamic business environment. In doing so, it raises sensitivity to an important caveat in digital environments epitomized by hyper-competition and transparency.