Going Digital for SMES: Adapting Business Model and Seizing Opportunities to Achieve Sustainable Business Performance

Abstract

The world is undergoing exponential technological advancement, resulting in a digital transformation of business models. Small- and medium-sized businesses must be ready to digitalize holistically as today's customers communicate via digital channels, consume a variety of digital products and services, and demand fast, dependable services tailored to their needs. Therefore, SMEs must examine these trends and transform the business model with new innovative products and services that leverage digital technology for communication, promotion, marketing, and delivery to digitally savvy clients. Over the years, many government organizations have convinced SMEs to use computers to modernize. The low level of process improvement shows that SMEs are struggling to digitize their businesses. Malaysian SMEs are optimistic about how digital technology can transform their business model, but digital adoption among SMEs remains low. Adopting a new business model allows SMEs to quickly adapt to unstable environments. However, little research has been done on how SMEs can improve efficiency and productivity by integrating technology into their business goals and activities, which are essential survival challenges for most SMEs. The purpose of this study is to examine how digital business transformation in business models can help SMEs achieve long-term business performance with agility. 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.