The relationship between digital 

transformation strategy and the 

performance of SMMEs in South Africa  

Student name: Dieketseng Rasenyalo 

Student number 2290301 

Student email and mobile: 2290301@students.wits.ac.za  

078 904 8143 

Supervisor: Dr Euphemia Godspower-Akpomiemie 

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 

 

Johannesburg 

2021 



 

 

ABSTRACT 

 

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internet connectivity, technology applications, electricity and outdated skills of some 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.   

 

 

 

 

 

 

 



 

 

KEY WORDS 

i) Digital transformation 

ii) Digital transformation strategy 

iii) Performance  

iv) Small business  

v) SMME 

vi) Strategy 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

DECLARATION 

 

I, Dieketseng Rasenyalo, declare that this research report is my own work except as 

indicated in the references and acknowledgements. It is submitted in partial fulfilment 

of the requirements for the degree of Master of Management in the field of Digital 

Business at the University of the Witwatersrand, Johannesburg. It has not been 

submitted before for any degree or examination in this or any other university. 

 

Name: Dieketseng Rasenyalo Signature: 

 

Signed at …………………………………………………… 

 

On the ……………………………...day of ………………………… 2021 

 

 

 

 

 

 

 

 

 

 

 

 

 

Midrand, Waterfall

18th November



 

 

DEDICATION 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

ACKNOWLEDGEMENTS 

I would like to thank my supervisor, Dr Euphemia Godspower-Akpomiemie for all her 

endless support, her hard work in giving me timely, insightful and constructive 

comments and for always availing herself to answer any questions even throughout 

the pandemic.  

I would also like to extend my gratitude to my late grandparents who have always 

encouraged me to study and my partner for all the love and support he gave me during 

this period.  

I am eternally grateful for the friendships formed during this study period.  

Most importantly I would like to thank God for the strength he bestowed upon me to 

persevere until the end. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

TABLE
 

OF
 

CONTENTS 

 
TABLE OF CONTENTS 7 

LIST OF TABLES 10 

LIST OF FIGURES 11 

LIST OF ACRONYMS 12 

CHAPTER 1. Introduction 1 

1.1 Purpose 1 

1.2 Context of the study 1 

1.3 Research problem 4 

1.4 Research objectives 5 

1.5 Research questions 5 

1.6 Significance of the study 5 

1.7 Delimitations of the study 6 

1.8 Definitions of terms 6 

1.9 Assumption 7 

Chapter 2 LITERATURE REVIEW 8 

2.1 Introduction 8 

2.2 Background 8 

2.3 Definition of key Constructs 9 

2.3.1 Small and medium enterprise (SME) 9 

2.3.2 Strategy 9 

2.3.3 Digitization 9 

2.3.4 Digitalization 10 

2.3.5 Digital transformation 10 

2.3.6 Digital Transformation Strategy 10 

2.3.7 Digital maturity 11 

2.4. Domains of Digital transformation strategy 11 

2.4.1 Rogers’s Theory 11 

2.5 SMME Ecosystem 12 

2.6 Factors that affect deployment of digital transformation strategy in SMMEs’ business 

models 13 

2.6.1 Factors related to failure 14 

2.6.2 Factors related to success 15 



 

 

2.5 Conclusion of the literature 16 

CHAPTER 3: RESEARCH METHODOLOGY 17 

3.1 Research approach 17 

3.2. Research Design 17 

3.3 Data collection methods 18 

3.4 Population and sample 18 

3.4.1. Population 18 

3.4.2. Sample and sampling method 19 

3.5 The research instrument 20 

3.6 Procedure for data collection 20 

3.7 Data analysis and interpretation 21 

3.8 Limitations of the study 21 

3.9 Transferability and Dependability 22 

3.9.1 Transferability 22 

3.9.2 Credibility 22 

3.9.3 Dependability 22 

3.9.4 Conformability 22 

3.10 Ethical considerations 23 

3.11 Consistency Matrix 23 

CHAPTER 4: PRESENTATION OF FINDINGS 24 

4.1 Sample Characteristics 24 

4.1.1 Participant’s Characteristics 24 

4.1.1.1 Gender and Race 25 

4.1.1.2 Age Group 25 

4.1.1.3 Time spent in Business 26 

4.1.1.4 Education 26 

4.1.2 Company’s Characteristics/Positions 27 

4.1.2.1 Location 28 

4.1.2.2 Technology used 28 

4.1.2.3 Impact of COVID-19 29 

4.1.2.4 Turnover 29 

4.1.3 Environment Characteristics 30 

4.2. The Research Findings 31 

4.2.1 Factors that affect deployment of digital transformation strategy in SMMEs 31 



 

 

4.2.2 Opportunities at SMMEs disposal 34 

4.3 Performance of SMMEs 39 

4.4 Business Focus of the SMMEs 42 

4.5 Chapter Summary 43 

Chapter 5: DISCUSSION OF THE FINDINGS 44 

5.1 Introduction 44 

5.2 Profile of the Entrepreneurs 44 

5.3 Factors that affect deployment of digital transformation strategy in SMMEs 47 

5.3.1. Internet Connectivity 48 

5.3.2 Technology Tools 50 

5.3.3 Electricity/Load Shedding 50 

5.3.4 Individual upskilling 51 

5.4 Opportunities that are at SMMEs disposal 52 

5.4.1 Data Usage 52 

5.4.2 Competition 54 

5.4.3 Business Value 56 

5.4.4. Innovation 57 

5.4.5 Customers 59 

5.5. Performance of SMMEs 61 

5.6 Chapter Summary 64 

6. Conclusion and Recommendations 66 

6.1. Introduction 66 

6.2. Conclusions 66 

6.2.1. Factors that affect deployment of digital transformation strategy in SMMEs’ business 

models 66 

6.3. Opportunities that are at SMMEs disposal to achieve digital transformation 67 

6.4. Recommendations 68 

REFERENCES 69 

  



 

 

LIST OF TABLES  

 

Table 3.1: Consistency Matrix 23 

Table 4.1: Sectors of the participants 24 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

LIST
 

OF
 

FIGURES 

 

Figure 1.1: Five (5) Domains of Digital Transformation Source: Rogers, (2016) 4 

Figure 4.2: Participant's Age 26 

Figure 4.3: Education Level 27 

Figure 4.4: Participant's Positions 27 

Figure 4.5: Location by Area 28 

Figure 4.6: Turnover 30 

Figure 4.7: Key Performance metrics availability 39 

Figure 5.1: Video Conferencing (Adopted from Singh and Awashi, 2020) 46 

Figure 5.2: Technology used (Source: Synthesized from the Participants responses)47 

Figure 5.3: Challenges faced by SMMEs (Source: Synthesized from the Participants 

responses) 48 

Figure 5.4: Data Usage (Source: Synthesized from the Participants responses) 53 

Figure 5.5: Competition (Synthesised from the Participants responses) 55 

Figure 5.6: Value (Source: synthesized from the Participants responses) 56 

Figure 5.7: Innovation (Source: synthesized from the Participants responses) 58 

Figure 5.8: Customers (Source: synthetized from the Participants responses) 59 

Figure 5.9: Customer Network (Source: Digital Transformation book: Rogers 2016) 60 

Figure 5.10: Rewards (Source: synthesized from the Participants responses) 62 

Figure 5.11: Business Focus (Source: synthesized from the Participants responses) 64 

 

 

 

  

 



 

 

LIST
 

OF
 

ACRONYMS 

 

4IR Fourth Industrial Revolution 

BASA Banking Association of South Africa 

COVID-19 COVID-19 is a disease caused by a new strain of coronavirus. 

'CO' stands for corona, 'VI' for virus, and 'D' for disease 

(Bender, 2020) 

GEM Global Entrepreneurship Monitor  

R&D Research and development  

SEDA Small Enterprise Development Agency  

SME Small and medium-sized enterprises  

SMME Small Medium and Micro enterprises 



1 

 

CHAPTER 1. Introduction 

1.1 Purpose  

The purpose of this study was two-fold: first, it explored opportunities at the small and 

medium-sized enterprises’ (SMMEs) disposal as a result of the digital revolution, which 

will necessitate digital transformation. Secondly, it investigated factors that make a 

digital transformation strategy suitable for SMMEs in the South African context. In so 

doing, this research aimed to argue and show that adaptation and implementation of 

a digital transformation strategy will positively affect performance of SMMEs in South 

Africa, Gauteng. 

1.2 Context of the study 

In light of the recent world pandemic due to COVID-19, which resulted in a lock down, 

all sectors were greatly affected (Channing Arndt, 2020). During these pandemic 

times, businesses had to embrace digitizing more than ever for survival. 

A small business is defined as a separate distinct business entity, non-government 

organization which operates in any economic sector or subsector normally owned or 

managed by one person together with its subsidiaries (National Small Business Act, 

1996). It can be micro, a very small, a small or a medium enterprise. Based on that 

act, small businesses are categorised and referred to as Small Medium and Micro 

enterprises (SMMEs) and not just small and medium enterprises (SMEs). This 

research focused on SMMEs in the Gauteng province. An SMME is defined as small, 

medium and macro enterprise, the category is defined by the annual turnover, total full 

time employees and the gross asset value (Chiromo et al., 2014) 

There are other definitions derived from the Act, such as the following: Survivalist, it is 

defined as an informal business conducted with minimal skills and capital and 

commonly operated for income. Microenterprises have a turnover below R150 000 

and employ a maximum of four employees, with no growth traits (National Small 

Business Act, 1996). Lastly, we looked at the formal Small and Medium Enterprises 

who employ from 5 to 200 employees respectively, the owner still largely manages the 



2 

 

business which meets all the definitions of a formal business (The Banking Association 

South Africa, 2019). 

Furthermore, in 2018, the Minister of Small Business Development introduced an 

amendment government Gazette that redefines SMMEs. The aim of the amendment 

is to ensure that the definition of the Small Business Enterprises is up-to-date, and 

appropriate and to the arrangement and nature of SMMEs (The Banking Association 

South Africa, 2019). These amendments have been argued to position the small 

businesses advantageously in accessing government support, sustenance and 

programmes, while strengthening their economic sustainability as well as ability to 

stimulate and provide employment over the medium or long term of their existence 

(Galawe, 2017).  

The amendment gave birth to agencies focused on uplifting SMMEs, such as the Small 

Enterprise Development Agency (SEDA). SEDA’s mandate is to implement the 

government strategy on small business, design and assimilate government-funded 

SMMEs support agencies across all tiers of government and implement a customary 

and shared national delivery network for small enterprise development (Bureau for 

Economic Research Note, 2016) 

SEDA identified the challenges and risks faced by SMMES (Bureau for Economic 

Research Note, 2016). The challenges are as following: access to finance and credit, 

poor infrastructure, low levels of research and development (R&D), onerous labour 

laws, an inadequately educated workforce, inefficient government bureaucracy, high 

levels of crime and a lack of access to markets (Bureau for Economic Research Note, 

2016). These risks were further categorised by SEDA as internal and external forces 

that directly affect the growth and sustainability (Department of Trade and Industry 

Annual Report, 2008). Risks, as stated in the Bureau Economic Research Note (2016) 

for SMMEs refer to forces internal or external to the small business sector that threaten 

their existence as a going concern. SMMEs in South Africa rarely survive or last an 

average of less than 3.5 years (Department of Trade and Industry Annual Report, 

2008). According to Global Entrepreneurship Monitor developing countries have a low 

survival rate for start-ups (Gauteng Enterprise Propeller Annual Performance Plan 

2019/20, 2019).  



3 

 

The Banking Association of South Africa (BASA) posits that SMMEs contribute to the 

economy of South Africa positively by having an inclusive economic growth that makes 

up about 60% of the employment force (The Banking Association South Africa, 2019). 

BASA further illuminates the prominence of SMMEs in the South African economy by 

stating that they make up about 34% of the countries’ GDP with the economic output, 

due to making up 91% of the countries’ formal businesses. 

Mitroulis and Kitsios (2019) bring into context the importance of the role new digital 

technologies plays in the performance and development of small businesses. The 

authors argue that digital transformation strategy adapted by SMMEs should not only 

be about technology but also the right approach to a customer centric and data 

focused organisational culture. A successful adaptation and implementation of the 

digital transformation strategy by SMMEs is vital to the changes needed to augment 

structural changes, customer experience, changes in value creation and 

organisational performance (Kitsios, 2019).  

Also according to Rogers’s theory (2016), digital transformation is not about updating 

technology but about the progression of strategic rationale to operate a business. The 

author further states that there are five domains that describe the landscape of digital 

transformation for business today, such domains include; customers, competition, 

data, innovation, and value. These domains are illustrated in figure 1.1. These 

domains imply that performance should not only be limited to the financial statements, 

but should include customer satisfaction, number of new customers, innovations, 

employee’s performance, relevance in the market and measure the SMME 

expectations (Rogers, 2016). 

 

Figure 1.1: Five (5) Domains of Digital Transformation Source: Rogers, (2016) 



4 

 

In this study, the researcher argued 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.  

1.3 Research problem 

It is well known that Small business growth is in the best interest of the nation as they 

are meant to contribute to employment creation, poverty alleviation, in turn one of the 

drivers of economic growth (Levin, Makgetla, Philip & Fotoyi, 2019) However, small 

businesses are faced with a high failure rate of success in South Africa, especially 

newly established small businesses (Fatoki, 2014). This high rate of failure hinders 

some of the contributions of small businesses to the economy. The failure of SMMEs 

in South Africa is caused by both internal and external factors. These factors are 

elaborated further in the study.  

The fourth industrial revolution (4IR) is quickly and significantly influencing how 

business is conducted and operated (Muhammad Faraz Mubarak, 2019). According 

to Spil et al., (2016) there is no well-defined business model for 4IR in research nor 

agreed best practice definitions. The assumption is very few companies have a 

thorough understanding of what digital transformation entails. Most companies still 

think digital maturity is about technology.  

According to Kane et al., (2015) lesser digitally mature companies focus on 

technological solutions to specific problems, whereas digitally maturing companies are 

able to reimagine the entire business supported by a digital strategy. Therefore, the 

lack of adaptation could be limited to the understanding of what digital transformation 

is. 

Several literatures have researched on this, and yet little is more focused on SMMEs 

in Gauteng. Against this background, this study has addressed the role of a digital 

transformation strategy on performance of South African small businesses, focusing 

on SMMEs in Johannesburg. 

1.4 Research objectives  

 



5 

 

This study sets to achieve the following objectives  

a. To establish the opportunities inherent in digital transformation that can be 

useful to aid performance of SMMEs in Johannesburg, South Africa  

b. To identify specific factors that affect digital transformation strategy 

implementation in SMMEs. 

1.5 Research questions 

To achieve the objectives, this study tends to address the following questions 

a. What opportunities are at SMMEs disposal as a result of the digital revolution, 

which will necessitate digital transformation in these entities?  

b. What factors affect deployment of digital transformation strategy in SMMEs’ 

business models?  

1.6 Significance of the study 

SMMEs form a great deal of the South African economy as the key drivers of economic 

growth, job creation and innovation (Bureau for Economic Research Note, 2016). The 

impact brought upon by the COVID-19 pandemic can be argued to have fast tracked 

adoption of the digital strategies for businesses not only to stay afloat but also to 

accelerate world economies. These times present an opportunity for businesses to 

bridge the gap between what consumers expect and the services and products 

offered. The companies that embrace change and new technology and are able to 

plan the best way to navigate through and will have a competitive edge over their 

competitors (Kane et al., 2019).  

This study identified how opportunities in digital transformation strategy will enhance 

organisational performance, hence the success of SMMEs in Johannesburg. The 

findings of this study provides a holistic understanding of effects of digital 

transformation strategy in the fourth industrial revolution on SMMEs’ performance. The 

study contributes to the body of knowledge on how SMMEs can make use of digital 

transformation in business models, so as to thrive in the fourth industrial revolution, 



6 

 

sustain their business and remain competitive in challenging times. The importance of 

the study is summarised as below; 

● Theoretical significance: This study contributes towards ongoing efforts to 

expand the scope of digital transformation to smaller entities and harness the 

embedded benefits traditionally thought to be for larger enterprises. 

 

● Practical significance: Provides insights for policy makers and capacitates 

entrepreneurs with knowledge to embrace digital transformation.  

1.7 Delimitations of the study 

This research is limited to registered SMMEs in South Africa, which have been 

operating for at least more than a year. The SMMEs of focus were in Gauteng 

province, focusing on Johannesburg city. This research excludes small businesses 

which are survivalists in nature and have been operating for less than a year. It is 

difficult to collect formal data from the survivalist type of the SMME sector which 

therefore makes it difficult to measure their performance (Galawe, 2017).  

1.8 Definitions of terms 

Digital transformation:  

This is the process of pervasive digitisation and digitalisation, as well as the 

exploitation of the full spectrum of technological advances to identify, create and 

capture new sources of business value (Rogers, 2016). 

Digital strategy: 

The collective view of those elements of group strategy which are enabled, supported 

or delivered by “digital” means; the means by which the organisation delivers its digital 

aspirations and transformation objectives, and the means by which the organisation 

attains its desired level of digital maturity Kane et al., (2015) 

SMMEs:  



7 

 

This refers to a small, medium and macro enterprise, which means a separate distinct 

business entity predominantly carried on in any sector, the categories are defined by 

the annual turnover, total full time employees and the gross asset value (Chiromo et 

al., 2014). 

Performance:  

A wide range of indicators which include, but not limited to - profitability, growth, or 

social performance of companies (Yakira Fernández-Torres, 2017). 

Success: 

Success defined for SMMEs in this context, means reduced cost, increase in 

productivity, employee’s performance referring to positive growth on production and 

services, increases in performance and reliance in the market (Mubarak, 2019). 

1.9 Assumption 

The research assumes that 

● The digital transformation domains outlined in figure 1.1 for main focus, are 

similar to the ones aimed at by the SMMEs, as well as the performance indicators. 

● The study also assumes that the research participants answered the questions 

truthfully and in no way were pressured or unduly influenced to participate in this study. 

 

 

 

 

 

 



8 

 

Chapter 2 LITERATURE REVIEW 

2.1 Introduction 

The literature review focuses on outlining the status of SMMEs in South Africa. 

Provides background on digital transformation, strategy, the effect and deployment of 

a digital transformation strategy. The relationship between digital transformation 

strategy and the companies’ performance is argued. Factors that affect digital 

transformation in SMMEs are also discussed in this section. 

 2.2 Background  

Schwab, K. (2017) breaks down the industrial revolution journey as follows: First, the 

industrial revolution which has since been witnessed 10 000 years ago with the 

transition from foraging to farming. The second industrial revolution brought about 

mass production by machine power nurtured by electricity. The third industrial 

revolution introduced the computer age known as the first leg of the digital age 

empowered by the development of semiconductors, mainframe computers, personal 

computers and the internet. As it stands, the world is transitioning to the second leg of 

the digital age, the era of more powerful but small and cheap sensors enabling artificial 

intelligence and machine learning. These technological disruptions prompt economic 

sectors to digitally transform to respond to the market need, this is what would be 

known as the fourth industrial revolution (Schwab, (2017). 

 

Significant dimensions in digital transformation comprise of the assembling, digitizing 

and analyses of large amounts of data known as big data, Internet of Things which is 

the internet representation of computing devices and technical platforms acting as 

intermediaries of information (Schwab, 2017). The potential embedded in digital 

disruption can overturn market giants and reshape markets faster than conceivably 

any force in history. Digital disruption has an effect on business models and digital 

technologies of a company’s current value proposition, and its resulting market 

position (Bradley, 2015).  



9 

 

2.3 Definition of key Constructs  

2.3.1 Small and medium enterprise (SME)  

Various countries occasionally classify small and medium-sized enterprises in a 

different form. White (2005) states that Brazil as a developing country achieves the 

classification of SMMEs by differentiating each by ownership, size, function, sector of 

operation and level of development. Each of these features provides a distinct 

characteristic, therefore a different definition (White, 2005). This study follows a 

classification of SMMEs provided by South Africa as taken from the South African 

Small Business Act 102 of 1996 which defined small businesses in the previous 

chapter. It is classified, based on the number of employees, sector, asset value, total 

gross, and turnover (National Small Business Act, 1996). See the detailed 

classification criteria in image in Appendix 1.  

2.3.2 Strategy  

Strategy is the process and methods by which organizations achieve their objectives 

(Grant, 2017). Grant (2017) further alludes the key components that make up a 

strategy which involves setting objectives, allocating resources, establishing 

consistency and soundness among decisions and actions. A strategy aims to achieve 

benefits for the organisation through its alignment of resources within a changing 

environment to meet the needs of markets, customers or clients and to fulfil 

stakeholder expectations (Johnson et. al, 2011). 

2.3.3 Digitization  

It is the process of converting analogue or physical assets into digital form. In the 

context of this study, digitization is about having the relevant technologies to carry out 

manual work activities into digital work. It is beneficial for a company to digitize their 

work as powerful new digital technologies motivate passionate changes in customer 

behaviour, once it is put in place, the digitization of a product, interaction, or medium 

becomes irresistible (Rogers,2016). Digitization of products, services, and business 

processes allows disruptive players to deliver the same value a traditional competitor 



10 

 

provides (Joseph Bradley, 2015). Digitization challenges old business models which 

in turn prompts changes in business processes and this requires digitalization.  

2.3.4 Digitalization  

Digitalization has stretched out and touched all industries and all sectors of society 

(Andersson et al., 2018). The effect digitalization has on companies and industries 

brings about challenges that require a transition of processes. For most companies 

across all industries the future appears to be harder to forecast, which threatens 

existing competitive positions (Andersson et al., 2018). Digitalization is also influencing 

value creation activities on different levels, which means it disperses the limitations of 

the organizations even on the more basic process level. Digitalization prompts 

organizations to reposition their business and operations (Rogers, 2016).   

2.3.5 Digital transformation  

Digital business transformation is a continuous venture, which is made up of adoption 

and deploying digital technologies and business models to advance performance 

quantifiably (Bradley et al., 2015). Digital transformation depends upon the Internet of 

Things: a diffusion of smartphones and apps, digital payment solutions, and the 

potential of big data for planning and operating business processes, as well as the 

development of a technical platform (Andersson, 2018).  

2.3.6 Digital Transformation Strategy  

With all the above mentioned key dimensions of the background of the study, it is fair 

to conclude the introduction of a digital transformation strategy (DTS) is an actual 

reaction to the challenges of managing the growing scenery of digital initiatives and 

related infrastructures (Chaniasa, 2019). The aim of the DTS is to prioritize, coordinate 

and implement a pre-digital organization’s transformation efforts and, as a long-term 

objective, to govern its journey to achieve the desired future state of being digitally 

transformed (Simon Chaniasa, 2019). However, although DTS formulation and 

implementation is a key concern for many pre-digital organizations, it remains an open 

question how such a strategy can be developed (Rogers, 2016)  



11 

 

2.3.7 Digital maturity  

Kane et al., (2017) has identified 3 levels to digital maturity as early, developing and 

maturing. An early stage of digital maturity is explained as when the organisation talks 

more about digital business than doing anything about it. Developing stage has to do 

with when the digital initiatives support certain business objectives, but are not core to 

the business strategy. The last stage, maturity is when Digital initiatives are a core part 

of our organisation’s business strategy (Kane et al., 2017). The term maturing is 

preferred because even though the digital strategy may be at the core of the 

organisation, digital heights are still a great exploratory journey. 

2.4. Domains of Digital transformation strategy 

2.4.1 Rogers’s Theory 

This research is underpinned by Rogers’s theory. According to Rogers (2016), there 

are domains of digital transformation that make up a business strategy. These 

domains have been greatly impacted by the fourth industrial revolution. Digital 

transformation has significantly changed the restrictions under which essentially every 

domain of business strategy operates. The five domains of digital transformation 

identified by Rogers include: 

Customer: Before the digital age, the relationship between customers and 

organizations was about customers being persuaded by marketing to have interest in 

products or services. The digital age has since turned the wheel and gave customers 

more power by enabling customer networks. The five customer network behaviours 

are; Access; Engage; Customize, Connect and Collaborate. This means customers 

are more connected to each other. A positive feedback made by customers about an 

organization, could have positive results which may results in more sales for the 

organisation around its network  

Competition: In a traditional world, an organization had one well-known and possibly 

long standing competitor. However, in a digital world with lesser boundaries, a 

competitor can be just about anyone from across all industries. An organization can 

either be disruptive by starting a new division that has nothing to do with the existing 



12 

 

model and compete in new platforms and dominate. The two biggest concepts with 

competition revolve around platforms and co-opetition. With a platform it is a winner 

takes all game and with co-opetition it is about collaborating with the companies that 

offer the same value as your company.  

Data: Digital technologies have changed how the world perceives data. It has become 

cheaper and easier to obtain, store, analyse and put to good use favourable to the 

organization. The collection of data is in the most unprecedented methods and 

quantities from various sources. 

Innovation: Most at times, innovation is associated with big corporations that had 

enough budget for research and development. However, digital transformation has 

enabled the creation and development to be quick within reach, as the markets are 

flexible enough for an idea to be innovated in an agile format.  

Value: Digital technologies force organizations to perceive value creation differently. 

Customers continuously need change, therefore an organization needs to have a 

flexible strategy to move and change with the needs of the customer. 

This study explores digital transformation through the above outlined five domains and 

determines if the transformation of SMMEs strategies can be achieved through them. 

Also to explore the effect of the transformation on the performance of the SMMEs. The 

adoption of Rogers’s Theory forms an important part of the study because the 

interview questions are guided by his assessment.  

2.5 SMME Ecosystem 

Kelly, 2015 suggests that an organization should not be constrained to a single sector 

but rather as part of an ecosystem that extends over to other sectors. This suggests 

that organizations can work cooperatively to evolve and to satisfy customer needs, 

support new products, and ultimately progress together to the next level of innovations. 

(Yaribeigi et al., 2014) breaks down the entrepreneurship ecosystem into six general 

domains: a culture that is conducive, policies that enable leadership, accessibility to 

financing, venture-friendly markets for products, quality human capital, and a range of 

institutional and infrastructural support. Developing countries have adopted these six 

domains to ensure their SMMEs flourish (Yaribeigi et al, 2014). The United States as 



13 

 

a developed country enables a conducive business ecosystem for its entrepreneurs. 

Hence the start-ups in Silicon Valley flourish due to the resources available to them 

(Armstrong, 2015).  

South Africa as a developing country has a start-up ecosystem that is vigorous and 

growing, however, the entrepreneurs and investors still haven't developed a global 

mind-set to take advantage of the global opportunities (Buckland, 2018). Cape Town 

is one of the leading cities in South Africa with a growing entrepreneurial ecosystem, 

it is home to the most active tech start-ups ("The start-up ecosystem in South Africa 

— The Small Business Site", 2020). According to the Small Business Site (2020), 

Cape Town has the most mature local ecosystem due to its angel investors that 

promote seeding funding. Cape Town is even nicknamed Silicon Cape. The city of 

focus for the study was Johannesburg, which has some challenges due to lack of 

experience in relation to start-ups, lack of funding, and global networks. However, the 

average valuation of start-ups in Johannesburg is still outperforming these challenges 

("The start-up ecosystem in South Africa — The Small Business Site", 2020). The 

study suggests there are opportunities available in the business ecosystem that can 

assist SMMEs to digitally transform their businesses.  

2.6 Factors that affect deployment of digital transformation strategy in 

SMMEs’ business models 

 

Since 1994, with the birth of the new government in South Africa, some of the great 

challenges the country was faced with amongst many, was to reintegrate into the 

global economy.  In the efforts to address the above-mentioned challenge, one of the 

areas of focus was to empower the SMME economy based on international standards 

by forming organizations and policies to support SMMEs (Rogerson, 2004). Post-

apartheid reconstruction introduced policies whose objective was to elevate SMMEs 

to excel as poverty alleviation, job creation and enhancement of national economic 

growth drivers.  

 

The policy objectives could potentially have been argued to all be of equal importance 

for eradicating poverty and enhancing growth (Rogerson 2004). However, a 



14 

 

prioritization of significance amongst the objectives needed to be put in place to allow 

for adequate allocation of resources. For the first 10 years post-1994, the unclear 

hierarchy of importance in policy objectives led to unclear guidelines in resource 

allocation objectives (Dorfling, 2001). The consequences of this confusion affected the 

country's SMME strategy which resulted in a lack of growth of SMMEs and a high rate 

of failure.  

2.6.1 Factors related to failure 

The failure rate of small to micro and medium enterprises in South Africa is above 70% 

and this is most likely to happen within the first 5–7 years of commencement (Bushe, 

2019). The failure of SMMEs in South Africa is caused by both internal and external 

factors (Fatoki, 2014). According to Galawe (2017), the failure rate of SMMEs can be 

associated with exogenous and endogenous risk factors, which can be drilled down 

further to 3 lower levels that are: the organization, the entrepreneur, and the 

environment The external factors include competition, lack of funding, and constantly 

rising costs of running a business. The SMMEs do not have control over what happens 

with external factors that affect their businesses. 

 

Governmental foundations play an essential role in creating an environment in which 

small businesses operate (Fatoki, 2014). Governmental institutions' main focus is to 

ensure SMMEs operate within a steady and foreseeable environment essential for the 

growth of economic activity and this is accomplished through the enactment of laws 

(Fatoki, 2014). In 2018, the South African government amended the small business 

Act. The amended Act positioned the SMMEs in a more advantageous state to access 

government support for sustainability and stimulated growth (Galawe, 2017). The 

internal factors come in two-fold; organization and the entrepreneur.   

 

The internal issues stem from lack of managerial skills, financial incompetence, lack 

of expertise in functional areas such as human resource management and marketing, 

(Brink, A., Cant, M., & Ligthelm A, 2003). A limited family business South African 

cultural aspect is introduced as one of the factors affecting entrepreneurial skills, in 



15 

 

addition to that, it's the incapacity to set strategic goals, unwillingness to seek advice, 

accelerative planning and reluctance to adapt to change (Brink et al., 2003).  

2.6.2 Factors related to success 

Now that we have discussed the reasons for failure in SMMEs, it is imperative to look 

at what successful SMMEs are doing differently. SMMEs in their nature are more 

advantaged compared to large companies regarding flexibility and the ability to 

innovate. China has the world's second-largest economy and has seen an increase in 

the number of SMMEs which now generate more than 60% of the GDP (Tang et al., 

2020).  According to (Tang et al., 2020), there are three factors that appear to be 

related to the success of SMMES namely; technological capability, innovation, and 

organization size.  Past studies have argued that the success of SMMEs lies entirely 

on the internal factors, based solely on the decisions made by management (Galawe, 

2017). 

 

Another factor to bring into the study that has been argued to increase the likelihood 

of an organization to survive and thrive is digital transformation (Kane et al., 2017). 

For an organization to grow and evolve, it has to undertake an on-going process to 

achieve digital maturity which focuses on; new business models, technology shifts and 

advancements, and changing market demands (Kane et al., 2017). Digitally maturing 

companies are known to do the following; ensuring digital transformation is part of the 

strategy, defining sources of financial support for innovation, creating a culture that 

supports digital transformation, and developing a competent workforce that drives 

profits. The study suggests factors that affect the deployment of digital transformation 

in SMMEs lies within the control and decisions made by the entrepreneur.  

2.5 Conclusion of the literature 

The literature review presented in this chapter began with providing the background 

of the study and what has prompted businesses to digitalize their business models. 

The key constructs of the topic were defined. In this study, the researcher argues 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 that follows 



16 

 

these five domains, namely; customer, competition, innovation, value and data. The 

five domains adopted are from Rogers’s theory, therefore the research interview 

questions are guided by the assessment from theory. The South African ecosystem is 

also discussed in this section, which has shown that it is stronger in Cape Town than 

it is in Johannesburg. The study suggests there are opportunities available in the 

business ecosystem that can assist SMMEs in Johannesburg to digitally transform 

their businesses. The last part of the literature review focused on factors that affect 

SMMEs. The study suggests factors that affect the deployment of digital 

transformation in SMMEs lies within the control and decisions made by the 

entrepreneur.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



17 

 

CHAPTER 3: RESEARCH METHODOLOGY 

 

The aim of this section is to focus and deliberate the methodological approach taken 

during the research process in order to answer the research questions. This chapter 

covers the following key methodological concepts: research approach, research 

design, data collection methods, data analysis, limitations of the study, validity and 

reliability, as well as the ethical considerations. 

3.1 Research approach 

Research approach refers to the set of beliefs that guide the researcher’s actions 

(Lincoln, 2011). This research is qualitative in nature and was conducted using a 

mixture of desktop research and informal interviews. The research process was 

appropriate for the study as it qualifies it to collect the essential data in a manner that 

is efficient. This research was guided by the conceptual principles and philosophical 

assumptions that are based on post-positivist orientation of which it is reasonable for 

a qualitative methodology (Cohen, 2006). 

3.2. Research Design 

This qualitative study made use of interviews to gather information on the effect of 

digital transformation of performance of SMMEs and the factors that drive these 

transformation strategies. The most common methods of qualitative data collection 

are observations, focus groups and interviews, these methods inherently allow for the 

qualitative research to use innovative methods to gain an insight into the participants’ 

world which allows for complex questions to be answered (Halcomb, 2016). This study 

adopted interviews as it is considered most flexible compared to observation and focus 

group discussion. Moreover, the objectives of this study, which include exploration of 

factors that affect deployment of digital transformation in SMMEs, was achieved 

through interviews rather than observation and focus group. 

 

In addition, information concerning the adoption of digital transformation was also 

gathered through desktop study. This approach enabled the researcher to identify from 



18 

 

literature the effect of digital transformation on SMMEs performance, as well as the 

factors that affect deployment of digital transformation by SMMEs. The desktop 

approach assisted in learning how these factors are handled, especially on SMMEs 

outside the context of South Africa, and other countries. The information from desktop 

analysis was combined with information from the interview to make inference, 

conclusion and recommendation on digital transformation and performance of SMMEs 

in South Africa.  

3.3 Data collection methods 

Data collection is comprehended as an interrelated set of actions to gather information 

to answer the research question (Creswell, 2014). The primary data for this study was 

collected through interviews using online platforms. This approach was adopted to 

adhere to the recent social distancing policy to combat the spread of the Covid-19. 

The interview questions were in the form of open-ended questions to allow participants 

enough avenue to air their views and elaborate further in-depth details when 

answering the questions on digital transformation strategies, as well as on the factors 

assumed to be affecting its adoption by SMMEs. Secondly, for the desktop review, 

information was collected from existing literature, publicly available gazette and other 

publications on SMMEs and digital strategies. 

3.4 Population and sample 

3.4.1. Population 

This section describes the study population and sampling techniques. A population is 

deemed as the overall sum of components about which findings can be made and 

theories can be developed (Cooper & Schindler, 2014). The population targeted for 

this study was all small, micro and medium enterprises operating in South Africa. 

There is no specific sector of focus, the population involves enterprises across all the 

sectors of the economy. 



19 

 

3.4.2. Sample and sampling method 

For the purpose of this research, the focus was on Gauteng province, specifically in 

Johannesburg. The focus on Johannesburg Gauteng is because Johannesburg is the 

major business district of Gauteng, therefore, more SMMEs were available for 

participation within the Sandton area for the research. Non-probability sampling, using 

a purposive sampling method was adopted. This method was mainly preferred 

because it allowed the researcher to have access to available SMMEs in the position 

to accept the proposal to participate in the research. SMMEs are still relatively small 

in number, some are still in the infant stage, therefore some of them had not been 

exposed to the concepts of digital transformation strategies. Based on that, a 

purposive sampling technique is best suitable for this study. 

 

For the purpose of this study, ten SMMEs were interviewed. For an SMME to be 

suitable to participate in this study, it had to be a formal business that has been in 

operation for over one year. Most importantly, the business had to fit into the definition 

of SMME as elaborated in Chapter 1 of this research report. 

 

The non-probability purposive sampling technique was used both in the selecting 

institutions and individuals based on the specific purpose linked to answering the 

research questions (Naderifar, 2017). The preferred individuals for the interviews from 

each SMME were the owners of the business. However, some of the businesses had 

grown to the extent of employing managers and senior managers. Therefore, 

managers were included in the participation, in the cases where the owners of the 

business were not accessible, or where the owners granted permission to the manager 

to attend the interview. 

 

Various organisations which deal directly with SMMEs in Johannesburg were 

contacted to help identify SMMEs in their networks. The companies that were 

interviewed were identified through LinkedIn, the world's largest professional network 

on the internet.  LinkedIn is used for job hunting, creating and strengthening 

professional relationships, as well as learning the skills needed to succeed in a career. 

The aim was to interview a minimum of 20 participants to reach an in-depth 

understanding of a phenomenon (Dworkin, 2012). However due to the recent 



20 

 

pandemic, most organizations were reluctant to partake in the study. And the study 

ended up with 10 participants.  

3.5 The research instrument 

The research instrument of choice for this study was an interview which had semi-

structured questions and structured questions adopted from the David L. Rogers 

(2016) assessment scale. Interview questions were designed to cover the 2 objectives 

explored in the literature review section, the responses from the interview assisted the 

researcher to identify the current stance of SMMES on digital transformation. Sample 

of the proposed interview questions are presented in Appendix 2. 

 

The open ended questions followed the themes below: 

o SECTION A: Profiling – The first section of the interview focused on the 

demographics and categorization of the SMME the interviewee represents. 

o SECTION B: Factors Affecting Digital Transformation – The questions in this 

section were designed to determine the factors affecting a digital transformation at 

SMME level (Vogelsang, 2019).  

SECTION C: Strategic Thinking - The questions under this section were designed to 

explore the degree to which an organization has adapted its strategic thinking to the 

digital reality (Rogers, 2016)  

SECTION D: Organizational Agility - These questions were designed to explore an 

organization’s ability to put into practice these new strategic principles and 

successfully drive change in your business (Rogers, 2016).  

3.6 Procedure for data collection 

Respondents 

The participants that were interviewed in this research include the entrepreneurs, 

owners, directors, CEOs and managers of the SMMEs to be in the sample. The 

research was conducted through the interview sessions utilizing available on-line 

meetings platforms. The researcher informed the respondents about the purpose of 

the study and attained written consent from the respondent. The researcher recorded 



21 

 

the interviews with the permission of the interviewees in order to not disrupt the flow 

of the interview. All interviews were recorded to ensure no data is lost during the 

collection process. It was also imperative for the researcher to avoid agreeing or 

disagreeing with the subjects or influencing the respondent in any manner. 

3.7 Data analysis and interpretation 

The analysis of qualitative research aims to discover and comprehend the big picture 

by using the data to describe the phenomenon and what it means (Halcomb, 2016). 

Analysis of data collected through qualitative research has been identified as a 

complex phase of the research where the researcher is expected to analyse, 

categorise and test information in order to respond to the research questions 

(Bengtsson, 2016). Content analysis was used to identify the themes present in the 

narrative and textual data (Mayring, 2004). The aim is to narrate the meaning 

expressed in the data collected. 

3.8 Limitations of the study  

This study only focused on the SMMEs in the Gauteng province, specifically 

Johannesburg. Johannesburg is known to be the economic driving force of the African 

continent; it is even referred to as the New York of Africa (Callaghan, 2011). Therefore, 

there was an expectation to find a satisfactory number of SMMEs that are willing to 

move towards a digital transformation journey. 

For the purpose of this research, the focus was on the formal registered SMMEs that 

have been in operation for over a year and meet the criteria set out in the government 

gazette for SMMEs. Formal registered SMMEs with over a year’s existence are 

believed to have enough data for analyses (Galawe, 2017). Therefore, small 

businesses that are survivalist in nature were excluded from the study.  



22 

 

3.9 Transferability and Dependability 

3.9.1 Transferability 

To ensure transferability of this study, the researcher thoroughly noted the exact 

details of the research situation and methods (Poole et al., 2015). To ensure 

transferability in this research, the method that was applied and the findings were 

presented in a way that they will be compared to related situations of SMMEs in other 

provinces of South Africa. 

3.9.2 Credibility 

The credibility of this study was ensured by choosing participants through the    

purposive sampling approach which guaranteed that those SMMEs are able to 

sufficiently serve the objectives of the research (Poole et al., 2015). 

3.9.3 Dependability 

Dependability refers to how precisely the researcher can substantiate their findings 

with the method used to arrive at the conclusions from a social context (Poole et al., 

2015). The researcher ensured the findings of the study are consistent with the data 

collected through the practice of an enquiry audit which was conducted on the 

research study. 

3.9.4 Conformability 

Conformability refers to the neutrality of the research throughout the data collecting 

stage to the data analysis stage (Mandal, 2018). Conformability also designates the 

need for quality to be shown from the findings derived from the study. The researcher 

demonstrated the quality and objectivity of the research, through the techniques and 

tools used to collect and analyse the data. The researcher kept an audit trail of the 

data collection, analysis and interpretation of data. Furthermore, recorded the themes 

and topics of interest and the coding to ensure a reasonable explanation of the 

rationale. 



23 

 

3.10 Ethical considerations  

Ethics are apprehensive of the behaviour in relation to others (Saunders et al., 2016). 

This study utilized the internet to find available contacts of SMMEs. A standard ethical 

procedure and guidelines of the Wits Business School was followed. Relevant 

artefacts were provided to the participant’s prior commencement, such as an email of 

permission to conduct research, a consent form for questionnaires and a clearance 

certificate from the ethical department of the University of Witwatersrand. The 

researcher ensured that the respondents’ rights were protected at all times. The 

researcher explained the significance of the study to the respondents. The researcher 

asked for consent from the individual respondent to take part in the study. 

Confidentiality was maintained by keeping the participants anonymous. Data obtained 

from the respondents was stored electronically and kept in a safe place. 

3.11 Consistency Matrix 

Table 3.1: Consistency Matrix 

Consistency Matrix 

Sub Problem Literature review Research 

questions 

Source of data Type of 

data  

Analysis 

SMME 

Ecosystem 

(Kelly, 2015) 

(Yaribeigi et al., 2014)  

(Armstrong, 2015).  

(Buckland, 2018).  

(National Small 

Business Chamber, 

2020) 

What opportunities 

are at SMMEs 

disposal as a 

result of the digital 

revolution, which 

will necessitate 

digital 

transformation in 

these entities? 

Respondents in 

semi-structured 

interviews 

 

Company 

documents 

Qualitative 

data 

Content 

analysis and 

data analysis 

To identify 

specific factors 

that affect digital 

transformation 

strategy 

implementation in 

SMMEs? 

(Fatoki, 2014).  

(Jabulile, 2017) 

(Brink et al., 2003)  

(Tang et al., 2020)  

(Kane et al., 2017)  

What factors affect 

deployment of 

digital 

transformation 

strategy in 

SMMEs’ business 

models? 

Full interview 

data 

 

Governments 

documents 

Private/public 

agency 

documents 

Qualitative 

data 

Content 

analysis and 

data analysis 

 



24 

 

CHAPTER 4: PRESENTATION OF FINDINGS 

In this chapter, the research outcomes are summarised in the light of the research 

objectives/questions as follows: 1) What factors affect deployment of digital 

transformation strategy in SMMEs’ business models? 2) What opportunities are at 

SMMEs disposal as a result of the digital revolution, which will necessitate digital 

transformation in these entities? The findings were conducted through a series of face 

to face and online informal interviews together with the desktop research component 

of the study. These results are discussed in chapter 5. 

4.1 Sample Characteristics 

The sample characteristics are in three parts. The first part focuses on the participants’ 

characteristics, and in this case, the participants are the owners, co-owners and senior 

managers in the SMME companies interviewed. The second part describes the 

company’s characteristics referred to as the SMMEs in this study. The last part 

presents the environmental characteristics. 

4.1.1 Participant’s Characteristics 

There were 10 participants interviewed. All companies that participated in this study 

met the characteristics of an SMME. Some of the participants were uncomfortable with 

responding to some questions however, the information provided was sufficient to 

proceed with the participant. Table 4.1 shows the sectors the companies represent: 

Table 4.2: Sectors of the participants 

 



25 

 

4.1.1.1 Gender and Race  

Sample characteristics results reveal that males were more than willing to participate 

in the study than females. Of all the respondents approached with the proposal to be 

part of the study, and the attempt by the researcher to have a fair representation of 

genders, only male participants responded making the study to be 100% of the 

sample. Most of the participants were black (80%). Followed by (10%) Indian and 

(10%) Chinese. Figure 4.1 shows the race representation.  

 

Figure 4.1: Participant's Race 

4.1.1.2 Age Group 

Most of the participants of the study were in the 36-40 (70%) age group. Followed by 

the 41-45 (30%) age group. According to (Bosma et al., 2016) in the Global 

Entrepreneur Monitor (GEM) report, the age group of 36-45 is considered as the most 

economically active group. The entire sample participants fall within the age groups 

36-45. From the results revealed, there is great need to instil entrepreneurship skills 

in the younger generation. Figure 4.2 shows the age representation of the sample.  

10%
10%

80%

Race

Indian Chinese Black



26 

 

  

Figure 4.2: Participant's Age 

4.1.1.3 Time spent in Business 

The time spent in business refers to entrepreneurs that devote their time to their 

businesses. The sample reveals that 100% of the participants run their companies on 

a full time and on a day to day basis. All participants have been in operation for over 

2 years. The results reveal that the participant’s livelihood depends on their 

businesses. This further proves the importance of SMMEs in the South African 

economy.  

4.1.1.4 Education  

Regarding education, 40% of participants have a university degree as a highest 

qualification. 10% have a post degree, followed by 40% of a Master’s degree. 10% of 

the sample population is a PHD candidate in the same field as that of the company. 

This sample was highly educated and contradicts Bosma et al., (2016) findings that 

sub-Saharan entrepreneurs are not highly educated. The high education of the sample 

is an advantage to this study as it made it easier to get hold of the participants. Due to 

the COVID-19 lockdown restrictions, most of the interviews had to be conducted online 

and some of the participants were contacted on LinkedIn, a professional platform for 

professionals. Figure 4.3 shows the level of education amongst the participants. Their 

level of education made the virtual interview more successful and easy to conduct. 

20%

20%

10%
20%

10%

20%

Age

Age 36 Age 37 Age 38 Age 39 Age 41 Age 43



27 

 

 

Figure 4.3: Education Level 

4.1.2 Company’s Characteristics/Positions 

One of the findings that stood out was the positions held versus the level of education 

and age. From our sample, CEO positions are held by participants from 35 years of 

age and above. Out of the 4 CEOs in the sample, 3 of them have Master’s degrees 

and one is a PHD candidate. Figure 4.4 represents the number of participants that 

hold the same position in their respective companies.   

 

Figure 4.4: Participant's Positions 



28 

 

4.1.2.1 Location 

Some of the companies have business that requires them to operate across various 

provinces while others only operate in one province. This means that some of the 

participants have offices across various provinces while others have offices in only 

one province, with Gauteng operating as the head office. Most companies sampled 

are located in what has been referred to as the economic hub of Gauteng, Sandton 

(Economic Hub, 2021). The distribution of the sample is consistent with the status quo 

in the country because Sandton in Gauteng province is the economic hub of South 

Africa thus expected to have more representation in a sample for Johannesburg small 

businesses. Figure 4.5 shows the areas of the participants.  

 

Figure 4.5: Location by Area 

4.1.2.2 Technology used  

The participants have various technologies used for daily operations. The technology 

used differs from participant to participant according to the varying industries. 

Participant 1 mentioned that the company makes use of “Candy”, which is used for 

supplier project management. They also make use of the Zoom app for meetings. 

Participant 2 indicated that they make use of Shared drive, Microsoft teams and Slack, 

which is corporate WhatsApp for phone and laptops. They also make use of a software 

called 3CX.  Participant 3 said that they use ICAM technical assessment and talent 

link to optimize search CVs and use data functionality to drill down.    



29 

 

Participant 4 mentioned that they had internal software for meetings, but due to the 

covid-19, they resorted to the use of Microsoft teams and Zoom apps. Participant 5 

said they use Microsoft Teams and Zoom for meetings. They also have an in-house 

built sales funnels and project dashboards for analytics. They also utilize WhatsApp 

for quick and effective communication. Participants 6 shared with the researcher that 

they use a Geographic information system that is able to support all their operational 

duties. Participant 7 mentioned they use Microsoft D36, a relationship management 

intelligent business application. They also use Auto Cat which is a mapping software. 

Participant 8 stated that they use an accounting and inventory management system 

which is plugged to an e-commerce website. They use social media for marketing and 

WhatsApp and emails for communication with clients. Participant 9 said for fruitful crop 

production they use the internet of things; therefore, their plants are embedded with 

sensors. The company relies a lot on WI-FI for instant data feed. Participant 10 said 

they use Microsoft Infrastructure to provide Cloud technology to their clients. They use 

the architecture mapping tools for mapping business processes.  

4.1.2.3 Impact of COVID-19 

The COVID-19 lockdown rules and restrictions had a great impact on the economy. 

The lockdown has led to foremost revenue declines for most and the endurance of 

many companies are at risk (International Trade Centre (ITC), 2021). The report 

further infers that globally employment is dependent on the strength of SMMEs. Only 

20% of this study sample reduced their staff during global lock down and 10% 

increased their staff during lockdown. The rest of the participants’ companies 

managed to keep the same number of employees before and during COVID-19 

pandemic.  

4.1.2.4 Turnover  

All the companies interviewed exceeded the turnover benchmark. Not all the 

participants were comfortable to respond to this question, therefore, figure 9 below is 

made up of nine out of 10 responses. All participants reported over a million rands 

worth of turnover. The rand is a South African currency globally recognised as ZAR 

(Information of South Africa currency| Global Exchange - Currency exchange services, 



30 

 

2021). This research reports all amounts in rands as the research was conducted in 

South Africa.  33% of the participants are in the R1 – R10 million turnover. From figure 

4.6, 22% of the participants are in the R11 – R20 million rands turnover.  Followed by 

another 20% of the sample in the R40 – R50 million rands turnover. 11% made the 

R30 – R40 million turnover and the last 11% was in the R60 - R70 million turnover.  

 

Figure 4.6: Turnover 

4.1.3 Environment Characteristics 

South Africa is a dynamic country, made up of both developed and underdeveloped 

provinces. The focus of the study was on the Gauteng province, specifically the 

Johannesburg city. Although Gauteng is the smallest province, it consists of the cities 

of Pretoria, Johannesburg, Germiston, and Vereeniging and their surrounding 

metropolitan areas. Johannesburg is known to be the country’s chief financial and 

industrial metropolis (Campbell, 2021). The initial aim of the study was to get 

participants from all around Johannesburg to present a fair picture of the state of 

SMMEs within the city. However, due to the COVID-19 restrictions, it became harder 

for other businesses to show interest in the study except for those around the Sandton 

and Midrand suburbs.  

60% of the sample came from Sandton and 40% of the sample was from Midrand. The 

willingness from the sample could possibly be because it is the economic hub of South 

Africa (Sandton Gauteng Tourism Authority, 2021), whilst, Midrand is relatively 

0%

5%

10%

15%

20%

25%

30%

35%

1-10mil 11-20mil 30-40mil 40-50mil 60-70mil

Turnover in Rands



31 

 

modern and has experienced a great deal of growth in the last decade and is, 

therefore, an accurate reflection of current economic expansion of Gauteng 

(MIDRAND, Johannesburg, 2021).  

 

4.2. The Research Findings  

This section presents the responses from the interviews and some elements of the 

desktop research conducted. The objective of the interview questions (based on these 

research questions), were meant to offer prudent evidence that a digital strategy can 

be applied at SMME level based on Roger’s theory and also bring forth the challenges 

that delay digitalization of their businesses. 

The findings of this research study are presented based on the two broad research 

objectives/questions, which includes: to identify factors/challenges that affect 

deployment of digital transformation strategy in SMMEs’ business models. Secondly, 

to ascertain opportunities that are at SMMEs disposal as a result of the digital 

revolution, which will necessitate digital transformation in these entities.  

4.2.1 Factors that affect deployment of digital transformation strategy in 

SMMEs  

The first objective of this study is to investigate the factors that affect deployment of 

digital transformation strategy in SMMEs’ business models. The participants were 

asked questions about the challenges they face as SMMEs. The answers to the 

questions are presented below.  

Participant 1’s response is as follows: “We have put in a lot of effort to ensure we 

digitize our communication methods. We got a domain for our company so that we 

have branded email addresses instead of using the likes of Gmail.  The aim was to be 

as professional as we can get. However, the people we work with still want face to 

face discussions. I am not sure if the nature of the industry or the culture of the areas 

we deliver our services in”.  



32 

 

Participant 2 responded as follows: “We use cell phones a lot for communication, 

which need battery power. The main issue is electricity cuts usually known as load 

shedding. Electricity is a serious issue for us because we are unable to charge our 

phones as and when it is needed. Spending hours with a flat phone battery sometimes 

makes us lose out on potential business. We really need the government to solve 

electricity problems in our country”.  

Participant 3’s response is as follows: “As our way of going over and beyond for our 

clients, we sometimes offer our services to help them apply and get work visas. And 

we have noticed that the on-line systems available for users are not as efficient and 

responsive as they should be. The other issue is the government turn-around time, 

sometimes is way too long. This has proven to be a tedious exercise for individuals 

and hence we offer it a service to relief our clients off this stress”.  

Participant 4 stated the following: “As a technology company, we tend to use a lot of 

software not only to deliver our products but to run our in-house operations as well. 

The issue we face with these softwares and applications is the lack of integration. 

There are no applications available as SMME level size that can be integrated into 

one operational system. Applications and or softwares that integrate into one system 

are only at a big enterprise level. This is serious for us because we end up having to 

use a lot of applications that don’t even talk to each other”.  

Participant 5 replied to the question as follows: “A lot of the time we struggle with 

appropriate applications and software packages relevant for our small business. What 

we have realised is that these technology service providers do not cater for small 

businesses. They do not customize the packages they offer at SMME level; their 

packages are only meant to cater for large enterprises. What is sad for us is that we 

end up spending too much on a software or application and yet we don’t even use half 

of what is offered in the package”.  

Participant 6 responded as follows: “Majority of our clients are Government 

departments. We have since learned that they lack a lot of digital skills. Even before 

the lockdown restrictions due to the COVID-19 pandemic that forced ways of working 

to be digital, we had always been aware of government official’s lack of digital skills. 

In that case we then started to plan on how we can have a training division that can 

focus on assisting government officials to be more digital. 



33 

 

Another factor we have noticed within our own company that delays digital adoption is 

the fear of the unknown and cultural factor. We don’t have the most tech savvy 

employees and therefore they are more reliant on the CEO leading abilities in new 

ways of working, than taking the lead themselves”.  

Participant 7 replied as follows: “When the COVID-19 pandemic hit, we were forced to 

work from home according to the lockdown restrictions by the president. The only way 

we could continue working was to work from home by being online. We had an issue 

with the employee’s internet access at home. Our employees are from the townships, 

and do not have fibre or WI-FI hotspots nearby their homes. Therefore, we had to take 

the extra revenue we had to re-invest in their home internet packages so that they 

continue to work from home. The other problem with working from home is electricity 

cuts. The office spaces have generators as backup for electricity cuts. When we work 

from home, our working hours are affected by the electricity cuts''.     

Participant 8 responded as follows: “We have opened a new business of dealcoholized 

wine. Although we are a family business and a lot of the time it is easy for us to carry 

out the administration side of the business manually. It would be easier if we had 

enough technology to assist and make the work effective. We have since realised that 

there are very few applications available to SMMEs. The ones that are there are not 

even easy to find and not exactly affordable for a small business”.  

Participant 9 replied to the question stating the following: “Our work is mainly made up 

of exporting our products to international clients. The production process of our 

products requires a lot of advanced technology such as sensors for monitoring the 

growth. We have attempted to ask for assistance from the government with funding 

but there has not been any success. The technology we use is too advanced and too 

costly because we have to import it from china. We still don’t have any assistance from 

the government with that”.  

Participant 10 responded as follows: “In the beginning we used to do some work for 

the government, but we then moved to the private sector. What we realized with the 

government is that they lack a lot of efficiency. Their internal processes are not 

designed to be helpful to SMMEs.  The Government doesn’t help the SMMES to have 

a seamless process, therefore we have very little work with the Government. We are 

mainly in the private corporate”.  



34 

 

4.2.2 Opportunities at SMMEs disposal  

The second objective of this study tends to find the opportunities that are at SMMEs 

disposal as a result of the digital revolution, which will necessitate digital 

transformation in these entities. In chapter 2, the approach for measuring digital 

transformation within SMMEs is explained, which mainly focused on the five factors 

adopted from the Digital Transformation Playbook by David L. Rogers (2016). This 

study focused on the participants’ view on these core five factors around a digital 

transformation strategy, namely: Data, Competition, Value, Innovation and 

Customers. The participants were asked questions based on these core five factors 

that affect digital transformation strategy.  

Data 

The participants were asked to explain what they use data for. The responses from 

each participant are detailed below. Participant 1 answered that “There is data 

collection but only to send it to the government, no data collection for the company 

itself, we still have a long way to go”. Participant 2 answered as follows: “We use data 

Insights from research data and secondary data. For understanding our clients and 

how to drive our business. Furthermore, we use it to measure how impactful the 

campaign we ran was”. 

Participant 3 replied to the question as follows: “We use data to measure our 

efficiencies, trends and success rates and know which client needs more information”. 

Participant 4 stated the following: “Our use of data is for collecting market trends data. 

We then analyse the data and make changes to our company by adapting to what the 

trends are, based on the data”.  Participant 5’s response is as follows: “We use data 

to apply analytics for clients. As an asset management company, data is the integral 

part of our company”.  

Participant 6 responded as follows: “Data is very important for us. We use our data for 

demonstrations to clients. We use it for Proof of concept”. Participant 7 answered the 

question as follows: “We use data to shape our market approach. And to guide us on 

which direction our company should go. Others call it Artificial Intelligence but we call 

it predictor models”. Participant 8 responded by stating the following: “The only data 



35 

 

we have is just customer data. But we haven’t done any analyses on it. We actually 

haven’t used it for any purposes as yet”.  

Participant 9’s response is as follows: “We use data primarily for regulatory purposes. 

We also use it for monitoring and remedial actions for other plants and how to 

maximise the yield of plants”. Participant 10 responded as follows: “We bring solutions 

to clients based on the client products. We build processes based on the data from 

the research”. 

Competition  

The participants were asked about how they handle the relationships with their 

competitors and partners. The responses to the question are presented below.  

Participant 1 responded as follows: “Yes, in construction there is a lot of collaboration 

with other companies. Sometimes the same companies we compete with for the same 

contracts, we sometimes partner with them to work on some projects or we 

subcontract them”. Participant 2’s response was as follows: “We collaborate a lot with 

our competitors and we refer to them as frenemies, we believe in punching amongst 

the best”. Participant 3 responded by saying: “When a client requires something that 

we don’t have. We get our rivals to collaborate with and deliver the solution to the 

client”. 

Participant 4’s response is as follows: “We do a lot of collaboration with our rivals 

because they are mainly well established than we are. To ensure that we deliver 

quality, we collaborate with those that can assist''. Participant 5 answered the question 

by stating the following: “We work a lot with our rivals to complete projects. Most of the 

projects we get are huge in scope. We are fortunate to get this because of the skills 

we provide. Therefore, we collaborate with our rivals for capacity and resources''.  

Participant 6 responded by saying: “We do partner with our rivals at times to deliver 

big projects. Sometimes we get projects that have a tight schedule, as a small 

business we don’t always have the capacity to reach the goal unless we collaborate 

with other companies”.  Participant 7 responded as follows: “We collaborate with some 

of our rivals on complex assignments and international projects to deliver to clients”. 

Participant 8 responded by saying: “Our wine is new in the market and we are still 

trying to differentiate ourselves from the rest”.  



36 

 

Participant 9 responded as follows: “We do collaborate with our rivals who are more 

established. We do compete with partners for resources and time”. Participant 10 

answered the question by saying: “We don’t trust our competitors as yet but we work 

very good with our partners”. 

Value 

The participants were asked about the number of value streams they have. The 

responses to the question are detailed as follows; Participant 1’s response is as 

follows: “As an entrepreneur I am involved in other businesses. That is not related to 

this current business”. Participant 2’s response is as follows: “As black SMMEs we 

struggle to have divided attention from our core business”. Participant 3’s response 

was recorded as: “We look into taking away our client's pain. Beyond recruitment we 

also assist our clients in getting VISAS for abroad work applications”.  

Participant 4 responded by saying: “Besides software development to enable people 

to work remotely and students for learning. We also implement IT Strategies and 

frameworks for our clients. In that we utilize our existing networks for new types of 

work”.  Participant 5’s response is as follows: “The company has other divisions that 

are fully operational. But the most recent one was making sanitizers during lock down. 

We used the same networks to sell sanitizers. This new value stream came as a result 

of the COVID-19 pandemic”.  

Participant 6 responded to the question by saying: “We deal with the science of where. 

So our main part is about Geographic Information System (GIS). But we are now 

planning to get into training. We have noticed a gap in government. We noticed they 

lack a lot of skills in administering the work we do for them”. Participant 7’s response 

is as follows: “Our key success factor is ability to deliver on a larger scale. Rendering 

services at a break-in point”.  

Participant 8 answered the question by saying: “We started as a distribution company 

and now we are making dealcoholized wines. And we use social media to market our 

product. So yes, we have created a new value stream”. Participant 9 responded as 

follows: “At the moment our only focus is on the core business but we do lookout for 

other opportunities”. Participant 10’s response is as follows: “We just stick to our 

market and current services”. 



37 

 

Innovation 

The participants were asked about how they handle innovation within their companies. 

The responses to the question are presented below. Participant 1’s response is as 

follows: “We are still using old traditional ways of delivery. We are not open to new 

ideas, there is no room”. Participant 2 responded by saying: “We are open to new 

technologies for doing business and we aim to move with how things are done. We 

move away from strict barriers and we ensure our turn-around times are agile. We 

welcome ideas from all levels of hierarchy”. 

Participant 3 responded as follows: “We continue to think of new concepts, although it 

takes longer to go to market. We have a champion for dealing with new ideas, then a 

case is created for it, have a trial run and approve if successful”. Participant 4 provided 

the following response “Our business relies on innovation; we do prototypes before 

producing mass. Any idea is welcomed at any time”. Participant 5 responded by saying 

the following: “We are agile in a sense that we prototype our products. We embrace 

innovations and new ideas and explore them and anyone can suggest”. 

Participant 6’s response was recorded as: “Our company is flexible enough to make 

changes as needed. With the Government it’s about what the department and owners 

need. We have started an innovate and Research Department to focus on such. Now 

that we have the Research and innovation department, new ideas can be taken there, 

and also the CEOs office is always open to discuss new ideas”. Participant 7 

responded as follows: “We have a fluid strategic document, there are mega shifts 

which we respond to in the market. We are constantly aiming to stay ahead. We have 

Informal Research and Development. In terms of new ideas, we have an idea meeting 

for the whole staff and pick the best times”. 

Participant 8’s response is as follows: “We are agile wherever the money is. In terms 

of new ideas, if It’s a good idea we implement. There is no hierarchy. Participant 9’s 

response is as follows: “We have to be innovative as a start-up. In terms of new ideas, 

it depends on the type of idea and how far it is from current business. We assign a 

dedicated team to look into it not to comprise the actual work of the day”. Participant 

10 responded as follows: “The world is Agile, we are always agile in our delivery to 

manage the time and risks. Agility for us is the way to go. For new ideas, we discuss 

and move with the idea. We are agile enough to not block new idea”.  



38 

 

Customers 

The participants were asked about the type of relationship they have with their 

customers. Participant 1 responded as follows: “The construction industry is sensitive. 

We don’t market to our customers. It’s only at the beginning of the work when you 

introduce your company to the industry. From there we just bid for tenders to get 

projects”. Participant 2’s response is as follows: “As a marketing company we 

influence the marketing collaboration with customers. Influencer marketing has taken 

over the digital space. Collaborating with customers is very good for a company’s 

brand. We also collaborate with our customers for corporate social investment (CSI) 

events”.  

Participant 3 responded as follows: “We do our marketing to customers for more brand 

awareness. In addition to that, there is a collaboration we do with our customers from 

time to time”. Participant 4 responded by saying: “Our business model requires us to 

work with our customers because they are our re-sellers. So yes, we collaborate with 

our clients to advance our business”. Participant 5 responded as follows: “We don’t do 

marketing at all, we work on referrals. We use networks to gain more customers”. 

Participant 6’s response was as follows: “The only marketing we do is on the company 

website with a corporate identity. But we intend on going the UX (user experience 

design) and SEO (search engine optimization) route once we have enough capacity”. 

Participant 7 responded by saying: “We don’t do formal marketing to customers, we 

just do periodic radio participation in said topics such as the state of water in South 

Africa. By offering our expert opinion on topics of interest, is how we get our business 

known”.   

Participant 8 responded to the question by saying: “We use social media to market to 

customers. And to sell, to promote and collaborate with Instagram users. Sometimes 

we also run competitions online”. 

Participant 9 responded as follows: “We operate on a business to business level. So 

we get our customers through networks”. Participant 10 provided the following 

feedback: “We have a business development person that speaks to all potential 

clients”.  



39 

 

4.3 Performance of SMMEs 

During the interview process, the participants were asked questions on their Key 

Performance Metrics. The participants that applied performance metrics are just 70% 

of the sample, and 30% do not have performance metrics. Figure 4.7 represents the 

number of companies that have key performance metrics and those that do not have.  

 

Figure 4.7: Key Performance metrics availability 

 

Participant 1 responded as follows: “Our key performance measures can’t adapt; at 

the moment we only want to stabilize the business and deal with the after effects of 

COVID-19”. Participant 2’s response is as follows: “Our key performance measures 

can adapt to changes in strategy”. Participant 3’s response to the question was: “We 

have structured our performance measures in such a way that they can adapt to 

changes in strategy”. 

Participant 4 responded as follows: “Our performance measures are structured in a 

way that allows for them to still apply with the new strategy. For instance, we have 

moved from assembly to manufacturing”. Participant 5’s feedback to the question was: 

We don’t have metrics set, we operate on trust and excellence”. 

Participant 6 responded by saying: “We don’t even have key performance indicators”. 

Participant 7’s response was as follows: “Our performance measures are meant to be 

adaptive to changes in strategy”. Participant 8 responded as follows: “We operate on 

short term goals for our strategy”. Participant 9 Most of our key performance measures 



40 

 

are financial in nature. So they can adapt to changes in strategy. Participant 10’s 

response was as follows: “The agility comes in this form. We approach every work 

stream with agility and we adapt with changes to the strategy”. 

Rewards  

The participants were asked about how they reward the managers within their 

companies. The responses are presented as follows: Participant 1 responded as 

follows: “Our rule is simple and straight; our rewards are objective based”. Participant 

2 mentioned that: “The rewards are only given for the end product”. Participant 3 

responded to the question by saying: “The managers are only rewarded for long term 

strategies”. 

Participant 4’s response was as follows: “When it comes to rewarding managers on 

projects, we wait for the end of the project. But we intend to change this approach and 

provide motivation along the way”. Participant 5 responded as follows: “We would like 

to incentivise managers on projects as and when they are still in progress. But for now 

we only reward for money in the bank”. Participant 6 responded to the question as 

follows: “We provide bonuses annually for everyone. When it comes to projects, we 

only reward on achieved objectives”. 

Participant 7 provided the following answer: “When it comes to rewarding our 

managers, there are two things for us; their ability to gain a client and client retention”. 

Participant 8’s response was as follows: “Rewards for us are different. It’s a family 

business, the reward is more on us achieving our business goals”. Participant 9 

provided the following feedback: “Our reward system only focuses on long term 

strategies, we do not have short term incentives to offer while projects are still in 

progress”. Participant 10 responded as follows: “Our current model doesn’t allow us 

for long term strategies. We focus more on the short term projects we have to keep us 

going. We can only afford salaries and bonuses. Nothing beyond that”.  

New ideas 

The participants were asked about how they handle the proposal of new ideas in their 

companies. Participant 1 responded as follows: “We are not open to new ideas, there 

is no room for new ideas. Our business is straight and forward on what needs to be 

done. There are industry frameworks we follow to ensure quality and safe delivery. 



41 

 

Therefore, we cannot afford to be innovative in how to deliver what is expected of us”. 

Participant 2 said: “We welcome ideas from all levels of hierarchy. We encourage the 

entire staff to be innovative. Once in a while we have brainstorming meetings to come 

up with new ideas”. 

Participant 3’s response is as follows: “We have a champion for new ideas. All new 

ideas are channelled through the champion, who then creates a case for it. The follow 

up steps are to have a trial run and if the idea passes this stage then it goes for 

approval”.  Participant 4’s response is as follows: “Any idea is welcomed at any time. 

As a technology company we need to keep innovating ourselves. We have a very 

technology advanced team, so therefore we trust their ideas can take us forward”. 

Participant 5 said: “We embrace innovations and new ideas. All new proposed ideas 

are explored in full. In our company anyone can suggest a new idea at any time. 

Sometimes we make it more fun by having brainstorming sessions that are more 

playful, and relaxed so that ideas can flow easier.” 

Participant 6 provided the following response: “We have recently created a research 

and innovation department. Before then ideas were suggested but there wasn’t a 

formalized way to follow through and see them succeed. Now that we have the 

research and innovation department all new ideas by everyone in the company can 

be taken there. Even though we have this process, the CEOs office is also always 

open to new ideas”. Participant 7 said: “We have an informal research and 

development process. We normally have an ideas meeting for the whole staff where 

we bounce off ideas. We prioritise the ones that seem more likely to work. We run with 

them and see where they take us”.  

Participant 8 responded to the question by saying: “Our company is very flexible with 

new ideas. We welcome all ideas. If It’s a good idea, then we implement it. There is 

no hierarchy of how ideas are treated”. Participant 9 provided the following response: 

“It depends on the type of idea and how far it is from current business. We assign a 

dedicated team to look into it not to comprise the actual work of the day”. Participant 

10 responded as follows: “for any new idea brought forward, we discuss and move 

with the idea if it’s good. We are agile enough to not block new idea” 



42 

 

4.4 Business Focus of the SMMEs  

The last interview question asked to all participants was based on their business focus, 

focusing on if their focus is on profit or customers. Participant 1 responded that “The 

nature of the work requires us to be profit based”. Participant 2 said “Our business rule 

is to make money but in the process of doing so, we know it is right to prioritize 

customers”. Participant 3 responded by saying: “Our business is customer focused 

and we know in that way, profits will follow”. 

Participant 4’s response is as follows: “At the moment our primary focus is on 

customers first because we intend to create a capacity around the country. Once we 

have a well-established client base then we will start making profits”. Participant 5 

responded as follows: “Our focus is on both customers and profits. Because it is nice 

to see the value you add to the clients. If you add value to clients, you will get your 

reward. There is money to plough back”. Participant 6 provided the following response: 

“Our primary focus is a mixture of both customers and profits. For customers it’s about 

going the extra mile for them because in the long run it will return profits”. 

Participant 7 said “Our focus is on sustainability, the fewer the clients the better. We 

believe in a niche market”. Participant 8’s response is as follows: “The main goal is to 

make profit. But to get there we need to grow organically and have the right structures. 

Customers and structure and good services then we know money will come”. 

Participant 9 provided the following feedback: “Our business focus is usually on both 

the customer and profit. You have to do both. We separate the client facing and the 

product delivery team”. Participant 10 responded as follows: “Our business focus is on 

both the profit and the customer. We know if we manage to satisfy the customer we 

will make profits and get more referrals. We work hard and stay ahead of the 

competition”.  

4.5 Chapter Summary  

The study started with an initial sample size of 10, characterized as 100% male. The 

sample consisted of 80% Blacks, 10% Indian and 10% Chinese who were between 

the ages of 30 and 40. This sample revealed that the respondents were well educated 

with 100% of the entrepreneurs having post matriculation qualifications, of the 100% 



43 

 

post matriculation, 40% of them have post-graduate degrees including a PHD. 

Candidate. All the entrepreneurs (100%) work in their businesses full time.   

The questions posed to the participants in relation to opportunities at SMMEs disposal 

due to digital revolution were guided by five core factors adopted from the Digital 

Transformation Playbook by David L. Rogers (2016). The factors are namely: Data, 

Competition, Value, Innovation and Customers. The factors affecting deployment of 

digital transformation strategy in SMMEs’ business models research question was 

guided by the challenges participants felt strongly about. 

The 70% of the sampled participants applied performance metrics, while 30% do not 

have performance metrics. One of the direct quotes taken from the participant that 

does apply metrics is “We don’t have metrics set, we operate on trust and excellence”. 

Of the 70% that apply performance metrics, 29% of them said their performance 

metrics cannot adapt to changes in strategy. 80% of the participants expressed how 

their focus is on achieved goals. The other 20% rewards based on the business model. 

The rewards are only given out when the goal is achieved. 

90% of the participants said they allow new ideas to be shared without any hierarchy. 

And only 10% said they do not have room for any new ideas. Although the participants 

had one focus, which is profit. Interestingly, they have mentioned the importance of 

putting the clients first, with the belief that if one puts the client first by delivering quality 

service and products, the profits will follow.  

 

 

 

 

 



44 

 

Chapter 5: DISCUSSION OF THE FINDINGS 

5.1 Introduction 

Reflecting on the results reported in Chapter 4, this chapter discusses in detail the 

findings of this study, according to the research questions/objectives. The first 

objective is identifying the opportunities that are at SMMEs disposal as a result of the 

digital revolution, which will necessitate digital transformation in these entities, while 

the second objective is to find out the factors that affect deployment of digital 

transformation strategy in SMMEs’ business operations. Before diving into the 

objectives, it was necessary to point out vital findings on the sample deployed in this 

study, as well as the technologies adopted by these sampled SMMEs in the pursuit of 

digitization of their business operations.  

5.2 Profile of the Entrepreneurs 

The sample frame of this study consisted only of males, despite multiple attempts to 

reach females for a fair gender representation. Only male participants responded 

quicker and were willing to be part of the study, with 60% of them holding postgraduate 

qualifications (including Ph.D.). This study sample contradicts Bosma et al., (2016) 

findings that sub-Saharan African entrepreneurs are not highly educated. However, 

the GEM South African report, 2018 indicates that men are more likely to be involved 

in entrepreneurial activities than women (Herrington & Kew, 2018). The GEM report, 

2017/2018 further identified several factors that play a part in preventing women from 

acting on as well as perceiving entrepreneurial opportunities. These factors may 

include: lack of female role models in the business sector; lack of capital and assets; 

higher levels of domestic responsibility; fewer business-orientated networks in their 

communities; lower status in society and a culturally-induced lack of assertiveness and 

confidence in their ability to succeed in business.  

Another interesting finding from the research sample is the age of the participants. 

Entire sample participants fall between the ages of 36 to 45, with 70% constituting 

ages between 36 and 40 years old, and 30% between 41 to 45 years old. This also 

supports GEM 2017/2018 report that the age group of 36-45 is considered as the most 



45 

 

economically active group. Therefore, this research argues that there is great need to 

instil entrepreneurship skills in the younger generation. 

More so, there seems to be multiple correlation between ages, the level of education 

and positions held in organisations. The South African youth ages range from 14 years 

to 35 years. From this study’s sample, CEO positions are held by participants over the 

age of 35. Out of the 4 CEOs in the sample, 3 of them have Masters Degrees and one 

is a PhD candidate. According to the GEM report 2017/2018 higher participation rates 

in entrepreneurial activity among those between 35 and 44 could be attributed to the 

fact that these individuals have had time to develop their skills and knowledge through 

education. This report is in line with the sample that consists of Masters and a PHD 

candidate. They have also had time to build up knowledge through work experiences 

and have managed to build confidence in their own abilities. A critical factor is that 

they may have accumulated other resources such as social and professional 

networks, personal savings and access to other financial resources (Herrington & 

Kew, 2018).  

5.3. Technology adoption  

The technologies used by the participants vary according to their industries. The 

participants mentioned they acquire new technology for adding value to the business 

and to create convenience for the workers. During lockdown, there was an increase in 

video conferencing platforms for the ease of communication while adhering to the 

social distancing lock down rules. Figure 5.1 shows the main online video conferencing 

that were used worldwide.  



46 

 

 

 

Figure 5.1: Video Conferencing (Adopted from Singh and Awashi, 2020) 

 

The majority of the participants admitted that they use WhatsApp, Zoom and Microsoft 

Teams for meetings and conferences, which helped the business to keep functioning 

despite the global lockdown due to the pandemic Figure 5.2 is derived during the 

analyses of the responses provided by the participants. It shows the dominated apps 

that were used by the SMMEs to facilitate digitization of their businesses and kept the 

business afloat during the pandemic era.  



47 

 

 

Figure 5.2: Technology used (Source: Synthesized from the Participants responses) 

5.3 Factors that affect deployment of digital transformation strategy in 

SMMEs 

The first objective of this study is to identify and analyse the factors mentioned by the 

participants that affect deployment of digital transformation strategy in SMMEs’ 

business models. As per figure 5.3, this study found that the top factors that affect 

digital transformation include: internet connectivity. technology applications, electricity 

and government official’s skills. The most common issues raised by the participants 

appear larger than other words in the word cloud, which was derived from answers 

during analyses. These identified factors are analysed in detail below.   



48 

 

 

Figure 5.3: Challenges faced by SMMEs (Source: Synthesized from the Participants 
responses) 

5.3.1. Internet Connectivity 

During the higher levels of lockdown restrictions due to the pandemic, most companies 

had no choice but to operate from home and carry out businesses online. Most SMMEs 

had to ensure that employees had connectivity needed to continue with official duties. 

Even though the top management already had fibre at home, it proved to be the 

opposite f