Abstract

The development of small and medium enterprises (SMEs) becomes the benchmark and leading position for developing countries’ economies. The digital transformation demands strategies, desires, and awareness of Information Technology (IT)-based market players and investments. Despite the transformation of a digital business platform, many SMEs have stumbled in the middle road. Therefore, this study aimed to determine priority indicators in assessing SMEs’ readiness towards digitalization and evolving a readiness model for SMEs based on the Decision Support System (DSS) approach. Multiple stakeholders’ viewpoints, particularly regarding academicians, governments, investors, market places, and SMEs’ business actors as targeted respondents, were scrutinized quantitatively and qualitatively to verify the proposed factors. The priority weights of factors have been examined from economic and IT perspectives and derived through deploying the Fuzzy Analytical Hierarchy Process (F-AHP) method. This study reveals the rank of measures necessary to assess the readiness of the digital revolution of SMEs. Transaction preparedness in SMEs’ cultural, educational, financial, and technological infrastructure views grows into the principal components during this assessment with 0.30 of vector value, accompanied by marketing and micro-environment at 0.24, management at 0.20, macro-environment at 0.03 and business activities at 0.02, respectively. For the recommendation purposes, the rubric segmented SME fitness into three levels, low, middle, and high performance. The prototype system DSS-SMEsReadiness was then evolved in order to simplify the adoption of the DSS method in the SME performance measurement model. The software analysis demonstrates that this application would assist decision-makers to ascertain SMEs’ readiness to digitalize. The future recommendation provides SMEs and stakeholders with knowledge transfers and acclimatization for taking the appropriate option about their business strategy, management resources, skills, and assistance programs for SMEs. This model attempts to reduce SME digitalization disruptions and achieve a digital business’s growth and sustainability in a nutshell.

Highlights

  • The annual report 2018-2019 of the European Union indicates that SMEs’ population reached 99.8%, absorbed 66.6% of the workers, and contributed 56.4% of the country’s larger economies (Muller et al, 2019)

  • This study has succeeded in identifying the triumphant factor in measuring the readiness of SMEs towards digitalization

  • Decision Support System (DSS)-F Analytical Hierarchy Process (AHP) has been successfully analyzed that the Transaction construct (TC) ripen into the most playing actor in measuring SMEs’ readiness towards digitalization

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Summary

Introduction

The annual report 2018-2019 of the European Union indicates that SMEs’ population reached 99.8%, absorbed 66.6% of the workers, and contributed 56.4% of the country’s larger economies (Muller et al, 2019). The contribution of small and mediumsized businesses to GDP currently absorbs about 97% of the most workforce It shows SMEs can boost their community standard of living, open new opportunities for jobs (Syafrida et al, 2018), assist larger companies (Berry et al, 2001), increase entrepreneurship during the financial crisis (Rinto et al, 2020; Amir et al, 2020), and encourage non-oil and gas companies (Berry et al, 2001). SMEs in Indonesia and other countries faced a range of challenges and issues relating to equity and human capital, competitiveness, commercial-system, innovation, bureaucracy, government readiness, market conceivable, creativity, export prospects, the resistance of the business owners and sustainability, local market awareness, women’s empowerment, the internet and digital transformation, financial enrolment, productivity, commercializing, and infrastructure (Rahadi, 2016; Syamala & Srinivasa, 2017; AlMaimani & Johari, 2015). External and environmental issues and challenges are fantastic opportunities for developing small and medium-sized enterprises worldwide, especially in Indonesia

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