The relationship between digital transformation strategy and the performance of SMMEs in South Africa

Rasenyalo, Dieketseng
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Small business growth is in the best interest of every nation as they are meant to contribute to employment creation, poverty alleviation, in turn one of the drivers of economic growth, therefore a study on SMMEs digital transformation is vital, especially in the 4th industrial revolution era. This study is set out to review the factors that affect digital transformation strategies of SMMEs, as well as the opportunities that are at SMMEs disposal to achieve digital transformation. This research is underpinned by Rogers’s theory (2016), which posits that digital transformation is not about updating technology but about the progression of strategic rationale to operate a business. This objective was achieved through qualitative data analysis, by interviewing and analysing data from selected SMMEs within the Gauteng province of South Africa. This study found that the factors that affect a digital transformation in SMMEs include; internet connectivity, technology applications, electricity and outdated skills of some officials. This study also found that opportunities available for SMMEs to deploy digital transformation are inherent in data usage, competition within the SMMEs cycle, business value, innovation and creativity as well as integrating customers into the business. Therefore, this study adds to the literature by proving that in order for SMMEs in South Africa to improve on performance, they need to enhance their business strategy by incorporating a digital transformation strategy. It is recommended that the government should step up in providing some of those factors identified by SMMEs, also that SMMEs should apply performance metrics, incentivize employees, collaborate with clients, and prioritise customers over profits to ensure effective performance and growth, especially in this digital era.
A research proposal submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in the field of Digital Business
UCTD, Digital transformation, Digital transformation strategy, Performance, Small business, SMME, Strategy