Abstract
Digital transformation enables SMEs to reshape their business models to respond to changing consumer needs in today's COVID-19 environment. The aim of this research is to investigate the key factors affecting the success of digital transformation among SMEs in Australia using a qualitative approach. The aspects perceived as important are digital capability and leadership capability. Understanding of digital trends and opportunities as well as strategic directions is a critical factor driving digital transformation. The research findings indicate that the SMEs in Australia are not best placed to leverage digital technology to transform business models, innovate products and services, and revolutionize operations. This research recommends that Australian SMEs embark on digital strategies that enable the transformation and take advantage of digital platform initiatives to employ new business models to boost revenue and improve customer experiences and competitiveness as companies and consumers are moving online and embracing e-commerce and new digital reality.
TopLiterature Review
The review of literature provides an overview of the challenges faced by SMEs in their different sectors and regions around the globe and their responses to the COVID-19 crisis. Bartik et al. (2020) demonstrated how COVID-19 was affecting SMEs in the United States and stated “43% of businesses were temporarily closed and they had to reduce jobs by over 40% as they did not have enough capital to cover two months of expenses or less” (Cited in Klein & Tedesco, 2021). Humphries, Neilson, and Ulyssea (2020) show a consistent result of the effects of the COVID-19 pandemic on American small businesses in their survey (Klein & Tedesco, 2021). 59% of the survey respondents reported that they have laid off a significant number of their employees and 30% the respondents believe it would take more than two years to get their business back to the same level as it was before COVID-19 (Klein & Tedesco, 2021). Sandberg, Stanford, and Buttle (2020) reported that 31% of SME owners and managers were struggling to get access to capital to keep their business up and running due to the changes in customer purchase behaviour during the COVID-19 lockdowns. According to Sandberg et al. (2020), in the United States, 51% of small businesses reported that they conducted online interactions with their customers while 35% of SMEs moved their sales and part of business operations (e.g. payment transactions) online (Klein & Tedesco, 2021).
Key Terms in this Chapter
Digital Business Strategy: The approach by which the application of digital technologies to business activities and processes can support business growth and provide competitive advantage.
E-Commerce: All electronically mediated transactions between business and its stakeholders.
Digital Platform Strategy: The approach to bringing market participants together via electronic networks or systems to benefit from the presence of each other, to enabling electronic interaction among participants and to allowing participants to deliver value to their target audience.
Digital Technology: Electronic tools, systems, devices, and resources that generate, transmit, store, or process data recorded in binary code of combinations of the digits 0 and 1.
Digital Transformation: The change that occurs when digital technologies are applied to organisational processes, structure, and systems to improve business performance and competitiveness.
B2C E-Commerce: Business-to-consumer e-commerce.