Going digital for SMES: adapting business model and seizing opportunities to achieve sustainable business performance.

Abstract

In today's fast-paced world, exponential technological advancements are causing a seismic shift in the business landscape. Small and medium-sized enterprises (SMEs) are standing at the crossroads of a digital transformation, where modern consumers heavily rely on digital channels for communication and demand personalized, fast, and reliable services. SMEs must adapt holistically to this digital era by reimagining their business models and introducing innovative products and services that leverage digital technology for communication, promotion, marketing, and efficient customer service. While government initiatives have encouraged SMEs to modernize through computerization, their progress has been slow, indicating the challenges they face in embracing digital transformation. In Malaysia, SMEs show optimism about the potential of digital technology but have low adoption rates. Adopting a new business model is the key to helping SMEs navigate unpredictable business environments with agility. Surprisingly, limited research has explored how SMEs can efficiently integrate technology into their business strategies and operations, a crucial challenge for their survival. This study aims to uncover the transformative power of digital business models for SMEs, offering a path toward long-term business success marked by flexibility and adaptability. It serves as a valuable guide for SMEs seeking to thrive in a digital world characterized by constant change and innovation. According to published data, Malaysia's largest economic contributor is the service industry, so this study focuses on SMEs in that sector. The research and proposed conceptual model will fill knowledge gaps in academia and guide policymakers in developing forward-thinking policies to support digitalization in SMEs.