The Impact of Digital Transformation on Businesses Model Smes

Abstract

Over the years, digital transformation has emerged as an important driver of business development and survival especially for SMEs. To a certain extent, this research focuses on identifying how SMEs in Malaysia adapt to digital technologies and work through the implications of changes to business models by incorporating digital tools into their organisations. Malaysia has various SMEs that play a major role in the country’s economy though some of these challenges include; financial constraints, lack of lack of adequate computer skills to handle ICTs and organizational resistance to change. This study reveals that most SMEs experience difficulties in implementing digital technologies even though governments support their expansion. For the purpose of this study, an interpretivist research paradigm is employed, and data is collected through the administration of semi-structured interviews with selected SME owners. To reach these primary research questions, thematic analysis to unearth patterns was used due to the following research questions: The paper has shown that digital transformation increases competiveness and flexibility in businesses but is a challenge for SMEs due to several factors including; limited capital, readiness of technology and organizational resistance. Understanding the level of digital readiness of the SMEs as part of the reality and the subsequent institution of the best interventions including training, easily available financing for the firms and simplification of frameworks that indicate preparedness for digital adoption are evident from this study. To increase the chances of utilizing digital technology for innovations and the enhancement of operational efficiencies, the following represents the challenges that should be addressed by SMEs; Policymakers and practitioners will find this research helpful with specific focuses on creating the right environment for accelerating digital transformation in the context of Malaysian SMEs.