Digital technologies in this digital age are acting as a source of disruption for small-sized business because they affect business rules and demand changes in business processes and models (Rogers, 2016). However, they can also act as a source of opportunities. There are very strong motives among SMEs to implement these speedily evolving technologies to reduce costs, improve customers satisfaction and relationships, and increase efficiency. However, SMEs across different industries struggle to adapt to the digital era (Fitzgerald, Kruschwitz, Bonnet, & Welch, 2014). Although SMEs constitute the backbone of any economy and tend to be flexible and, thus, can make decisions fast when it comes to adopting new technologies than larger firms, they are less oriented to advance their individual technological capabilities primarily due to lack of strategy and even resources (Schroder, 2015).
Digital technologies are a fast-track toward globalization for SMEs and are positively related to competitiveness and growth. Simply implementing digital technologies is not enough, thus, SMEs must consciously change their strategy, culture and knowledge to remain competitive (Kane, Palmer, Phillips, & Kiron, 2015). The digital age has presented opportunities for the innovative business models adopted by SMEs. It is a strong force of change which is transforming processes in business and firm’s capabilities (Downes & Nunes, 2013; Rogers, 2016). In order to take full advantage of the digital age, SMEs must work hard to completely integrate digital technologies into their business. This can help them in redesigning and leveraging the core competence, sustaining a competitive advantage.
The digital age has increase access to social, analytics, mobile and cloud computing for SMEs (Kane et al., 2015). Social technologies such as the social media platforms are transforming structure of social relationships in both consumer and enterprise space, thus offering new ways of collaboration. Mobile computing and increased usage of smartphones and mobile devices have enabled small-sized businesses to engage their customers more efficiently. Cloud computing SMEs have become even more flexible by scalable infrastructures. Social media has enabled SMEs to attract and consequently retain their customers by simply promoting their businesses operations on the platform. Facebook and Twitter, for example, has impacted SMEs by improving communication between managers and customers. These platforms and others offer SMEs competitive edge by clarifying customers’ needs, understanding customers’ behaviours, and sharing personal information through video posts.
The platforms can be used to create product awareness which can consequently be utilized in tracking client or customers’ experience. Huge access to social media platforms results in a significant return on investment for the small-sized business. The digital age has also improved the use of traditional technologies like Enterprise Resource Planning or Customer Relationship Management systems.
According to Karltorp (2017), digital technologies including mobile and internet technologies have ended up making the many industries transform and consequently create new ways of organizing and operating firms. The digital age presents many opportunities for the small-sized business.
Through digitalization, small businesses enjoy new opportunities for growth and innovation. Small-sized enterprise utilizes the digital technologies to automate in order to reduce operational costs (Mackenzie, Cohn, & Gann, 2014). Internet avails opportunities for absolutely new business models, the revolution in the delivery of the electronic content, and new and original means of communication that SMS can adopt. Digitalization of business activities has helped a lot in improving customers’ relationships and satisfactions because SMS has adopted new value propositions that have become more important (Bounfour, 2015, Berman et al., 2016). Small-sized investments that relate to digital technology have also enjoyed the transformation effects enjoyed in this digital age (Collin et al., 2015).
However, for the small-sized enterprise with limited resources, digitalization is challenging (Karltorp, 2017). Small-sized firms need to strategically transform some aspects of their business to take advantage of this digital age. Considering the innovation speed of the digital technologies and consequently their disruptive nature, SMS does not always find it easy navigating and deciding on digital transformation objective. According to Roger (2016), firms especially small-sized business must understand many business rules does not apply any more to finally realize opportunities of digital transformation.
The digital age has also presented some challenges to small-sized business. Many challenges relate to strategic aspects such as how to acquire the needed scarce resources and consequently develop capabilities for successful transformation. The challenges also relate to organizational and cultural aspects (Bounfour, 2015; Collin et al., 2015). For the small-sized firms, challenges encountered in this digital age may be different compared to the larger firms simply because of their characteristics and size. SMEs usually have a limited resource in terms of manpower, management and finance. They adopt dynamic and informal strategies and are reactive rather than proactive and struggle in developing effective strategies. The smaller the size of SMEs, the higher the risk that the SMEs will encounter many challenges in their digital transformation (Sommer, 2015).
Although small-sized businesses benefit hugely by adopting social media in their marketing strategies, there exist hindrances to their optimal utilization. A number of these obstacles pertain to the lack of time and ability to use the platform (Warees, 2012). Another obstacle includes lack of knowledge of what is exactly appropriate for the customers in terms of marketing posts. Failure to transmit material that is culturally correct on the internet can scare away the firm’s customers. Therefore, SMEs should spend a good amount of time understanding their clients to avoid offending them by posting inappropriate materials.
In Thailand, Kanchanatanee et al. (2014), discovered that attitudes of small business directors and the compatibility plus the perceived usefulness of the social media marketing are perhaps some factors that could prevent SMEs from adopting e-marketing. A study conducted by Ndlodo and Dhurup (2010) in South Africa discovered that factors that can inhibit SMEs from using e-marketing include lack of knowledge about what capabilities the platform offers, lack of readiness among customers to use the social media technology, technological incompatibility with the target audience, misperception of the social media, and lack of orientation toward social media platforms (Oji, Iwu, & Tengeh, 2017). These challenges can even be more severe in SMEs owned by rural communities because of lack of steady power supply, high illiteracy rate, and lack of ICT equipment.
Furthermore, challenges SMEs encounter while trying to market their selves in the digital age could resonate externally or internally and, thus, it is essentially important to identify if those challenges are personally embedded in the managers or staff or linked with the digital skills deficiencies (Ndlodo, & Dhurup, 2010). Lack of interoperability between the ICT systems utilized for the data exchange, information sharing and dissemination and marketing that are more readily made for larger companies are deterrents for SMEs managers.
This demands an understanding of appropriate digital software and hardware and their potential suitability and functionality for small-sized business at different stages of progression (Ndlodo, & Dhurup, 2010). Furthermore, investment in most up-to-date digital technologies does not automatically generate or produce positive results for SMEs, if it lacks an understanding of what those technologies should be utilized for, the results they should achieve, and how they can best be used beyond their single function, that is, typically marketing.
In conclusion, proliferation of digital technology, precisely communication and digital technology and their application to e-business, e-commerce and e-marketing have a significant impact on SMEs and business of all sizes at the global level (Lansiti and Lakhani, 2014). The spread of the digital technologies for SMEs whilst possessing potential to offer significant business opportunities also produces many challenges. Therefore, it can be a poor investment if SMEs fail to implement and manage them effectively as a core component of their business rather than a separate task where the technology is wedged on a piecemeal basis in small firms.
Therefore, to create a more integrated and seamless digital strategy, SMEs should unearth challenges which deter adoption of digital technologies and consequently examine these primarily in the context of many positive opportunities that they can enjoy by using digital technologies in the digital age. Common findings across different research studies such as Doing business in the Digital Age, 2013; e: A Europe 2020) have found that SMEs managers should be more competent and capable in measuring digital and also social media performance. Therefore, SMEs need to be assisted a lot in overcoming digital challenges they end up encountering.
