Impact of Digital Transformation on Organizational Performance in European SMEs
DOI:
https://doi.org/10.47604/ejbsm.3843Keywords:
bank performanceAbstract
Purpose: To aim of the study was to analyze impact of digital transformation on organizational performance in European SMEs.
Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
Findings: Digital transformation initiatives, including cloud computing, AI tools, digital workflows, and big data analytics, have a significant positive impact on European SMEs’ organizational performance, enhancing revenue growth, operational efficiency, and market share. Studies show that SMEs that strategically integrate these technologies with business processes and align them with leadership and entrepreneurial orientation achieve higher performance outcomes. However, effectiveness varies depending on digital maturity, firm capabilities, and contextual factors such as industry type and country-specific conditions.
Unique Contribution to Theory, Practice and Policy: The technology‑organization‑environment (TOE) framework, the resource‑based view (RBV), the dynamic capabilities theory may be used to anchor future studies on the impact of digital transformation on organizational performance in European SMEs. SME managers should prioritize aligning digital initiatives with organizational strategies, ensuring that technologies such as cloud computing, AI, and digital workflows directly support business objectives and market competitiveness Policymakers should create a supportive ecosystem for SME digitalization by providing access to infrastructure, funding incentives, grants, and tax benefits that encourage the adoption of advanced technologies
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