Small business survival depends on digital transformation
Researchers Gaffar Hafiz Sagala and Dóra Őri conducted a literature review on how SMEs use digital tools to build resilience: the ability to respond to unexpected crises or disruptions. Their analysis identified common patterns and key strategies in how SMEs are adopting technology to strengthen their ability to adapt and recover. Their findings show that digital transformation is critical to SME resilience; it enables SMEs to make better use of existing resources, improve operations, and drive innovation, ultimately improving business value.
Digital technology enables SMEs to continue operating during crises by implementing e-commerce, supporting remote managerial work, delivering greater service through digital sales, expanding reach through digital marketing, and facilitating learning and upskilling through online learning platforms and virtual meetings.
“These findings support the importance of enhancing business capability to prepare companies to face disturbances. Transformation during a crisis can be achieved by leveraging resources saved during stable periods to innovate in times of crisis,” says Dr. Őri, Associate Professor at Corvinus University.
The researchers identified factors that influence digital transformation:
- Leadership: The entrepreneurial resilience of an SME leader makes them a key driver of digital initiatives.
- Organisational strategy: Strategic alignment, frugal innovation, collaboration, and digital capability are critical for ensuring the impact of digital transformation on SMEs’ resilience.
- Collaboration: SMEs can reduce the risks associated with digital investment and enable progress even during periods of disruption through technology sharing, IT consultancy, or financial resource sharing.
- Structured approach: Clear strategic planning is essential to provide SMEs with a measurable strategy and enable ongoing adjustment, refinement, and improvement.
These findings were first published in the journal Management Decision. The full paper can be accessed here.