Digital Transformation Success in SMEs: Exploring the Interplay of Technology, Organization, and Environment
DOI:
https://doi.org/10.62486/agma2025166Keywords:
Digital Transformation, Structural Equation Modeling (SEM), Transformation Success Factors, Innovation Capability, Digital EconomyAbstract
Background: In the current digital economy, integrating cutting-edge technology into company operations has become essential to long-term sustainability and competitiveness. The term Digital Transform (DT) describes the deliberate use of digital technologies and processes to boost consumer engagement, operational effectiveness, and innovative capacity. For small and medium-sized enterprises (SMEs), DT presents both opportunities and challenges due to controlled resources and structural limitations.
Objective: To explore how technological, organizational, and environmental factors collectively influence the success of DT in SMEs was the primary objective of this research.
Method: an organized questionnaire collected data from 192 SME representatives across several industries. Using structural equation modeling (SEM), the research tested the relationships among particular variables. The model combined key constructs such as IT infrastructure readiness (ITIR) digital leadership (DL), organizational agility (OA), regulatory support (RS), market pressure (MP), workforce adaptability (WA), and Digital Transformation success (DTS). The DT process was assessed based on criteria that included the incorporation of digital platforms, real-time data utilization, and customer-driven innovation. SPSS and AMOS were utilized for data analysis, containing reliability tests, confirmatory factor analysis, descriptive statistics, and path analysis.
Result: Results discovered that organizational agility (β=0.38, p<0.01) and IT readiness (β=0.33, p<0.01) had the most substantial effects on transformation success, with external market pressure (β=0.27, p<0.05) also playing a meaningful role. Digital leadership was found to significantly mediate organizational capabilities.
Conclusion: These findings highlight the importance of internal capabilities supported by external drivers in shaping successful transformation outcomes.
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Copyright (c) 2025 Shailesh Kumar, Rajan T, Rameshbabu A, Tanveer Ahmad Wani, Satish Upadhyay, Beemkumar Nagappan, Satish Choudhury (Author)
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