This current study was conducted in order to develop a digital innovation model based on the digital organizational culture, digital capability, and organizational readiness. This study explores how the organizational readiness plays a mediating role between the digital capabilities and digital innovation and between the digital organizational culture and digital innovation. For data collection, the survey instrument was used to collect data from 227 SMEs of ICT industry in Pakistan. The findings have revealed a significant connection of the digital organizational culture and digital capabilities with the digital innovation. Second, the organizational readiness mediates between the digital capabilities, digital organizational culture, and digital innovation. The study has empirically confirmed how to flourish a mechanism of the digital innovation in the SMEs. Moreover, the findings suggest some substantial implications for the management by focusing on the digital capabilities and digital organizational culture as a fundamental predictor for the digital innovation via organizational readiness.