Siti Nuraina Mohd Asri Digital Transformation As A Catalyst For Sme Business Model Innovation

Abstract

This study explores the transformative impact of digital technologies on the business models of Small and Medium-sized Enterprises (SMEs) in Malaysia. It investigates how digital transformation enhances operational efficiency, market expansion, and customer engagement while addressing key challenges, including limited resources, digital literacy gaps, and resistance to change. Utilizing a qualitative research approach, in-depth interviews with SME owners and managers across various industries revealed critical strategies for digital adoption. Key findings include phased implementation, gradual integration of digital tools, and targeted staff training as pivotal to achieving successful outcomes. Digital transformation was found to significantly broaden customer reach, foster innovation, and enhance business resilience. Additionally, the study highlights the role of supportive ecosystems, including government policies, digital infrastructure, and training programs, in facilitating SMEs' transition into the digital economy. By addressing these structural and operational gaps, the research provides practical recommendations for SMEs and policymakers to promote sustainable growth, innovation, and global competitiveness. This study emphasizes the need for a strategic and inclusive approach to digital transformation, ensuring SMEs are well-equipped to thrive in an increasingly digitalized and dynamic market landscape.