Exploring the Enablers of Digital Transformation in Small and Medium-Sized Enterprises

Introduction

In recent times, digital technologies (i.e., social media, mobile technologies, analytics, cloud computing, and internet-of-things), also known as SMAC-IoT have provided myriad prospects for all businesses despite their size (Kraus et al., 2021; Lokuge et al., 2019). For example, in the past, only large-sized organizations with financial capacity had access to resources, the ability to invest in technologies and lead innovation in their respective organizations (Lokuge & Sedera, 2020). As such, technology-led innovation was limited to larger, resourceful organizations (Lokuge & Sedera, 2016; Tan et al., 2017). However, in recent times, digital technologies have disrupted the norms and have given rise to concepts such as digital transformation which has become a buzzword in the business landscape (Vial, 2019).

Digital transformation refers to “the use of digital technologies to create value-added products and processes in organizations and integrate them into business processes, organizational structures, and working models” (Warner & Wäger (2019). As per Vial (2019, p. 118) digital transformation is “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies.” Wessel, Baiyere, Ologeanu-Taddei, Cha, and Jensen (2020), extends this conversation and highlights that digital technology plays a key role in digital transformation, whereby they initiate a new organizational identity to develop. Digital transformation enables improved decision-making, value augmentation and improved customer services. The whole objective of investing in digital technologies in organizations is to develop new organizational capabilities for attaining a competitive edge over the market competition (Adikari et al., 2021; Lokuge et al., 2019; Vial, 2019). With the ever-changing customer requirements, advancement of modern technologies and the new normal introduced through COVID-19 pandemic, all organizations, especially small and medium-sized enterprises (SMEs) are interested in digital transformation initiatives considering its benefits.

SMEs are considered as the backbone of the global economy (Deng et al., 2019; Li et al., 2018). For example, in Australia alone 90% of the organizations that contribute to the national income are SMEs (Duan et al., 2012). As such, to increase organizational efficiency, it is important for the SMEs to increase the application of digital technologies and initiate digital transformation (Deng et al., 2019). Therefore, an investigation into the digital transformation in SMEs will assist in uncovering enormous benefits offered through the introduction of digital technologies. As a result of such digital transformations, SMEs will in turn be able to contribute to the economic growth of the community, society, and country.