Digitalization and its impact on small and medium-sized enterprises (SMEs): An exploratory study of challenges and proposed solutions
List of Authors
  • Goh Zhi Ji

Keyword
  • Digitalization, Business model, innovation, Challenges, SMEs

Abstract
  • Transformation and Digitalization are the biggest upheavals that companies are facing today. To stay competitive, most companies embrace change. However, organizations face challenges and need to find solutions to overcome these challenges. There is a lack of research that deals in detail with the changes caused by digitization for small and medium-sized enterprises (SMEs) and possible solutions. This research identified the innovative changes that SMEs should embrace. In addition, this study highlighted the challenges and proposed solutions that result from digitization. This was a qualitative study based on the philosophy of interpretivism and the inductive approach. Based on a targeted sample, data was collected from six participants. The study uses an exploratory research design based on interviews with six SMEs. Thematic analysis was used to identify the themes. Changes to be adopted include improving business processes, improving customer experience, transforming the business ecosystem, and improving customer experience. The biggest challenges include financial difficulties, intense competition, and cybersecurity issues. Solutions included additional government support, good security practices, and a clear roadmap for the digitization strategy. By examining the digitization and innovation challenges faced by SMEs and the proposed solutions, this research provided valuable insights to SME owners and stakeholders in embracing the change and devising strategies to overcome the challenges by leveraging digital technologies and innovation to sustain competitive advantage.

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