Measuring the Success of Digital Transformation in German SMEs

Abstract

The pace of digital disruption in firms is omnipresent and has been accelerated by the emergence of COVID-19. Using digital technologies requires financial resources to create value. As these resources are limited in small and medium-sized enterprises (SMEs) and digital use cases and best practices are not well known, the purpose of this qualitative study is to investigate how SME managers are adding value and achieving a measurable return on investment (ROI) by using digital technologies. The study reviews a range of literature and models relating to digitisation impacts within SMEs. Further, it entails in-depth qualitative research on digital transformation in SMEs to explore the usage of digitisation and measurements of the added value and return. By inductively performing a multiple-case study of eight German SMEs, the researchers provide evidence to determine the usefulness of data analytics in SMEs. The study delivers a rich overview of added value, benefits and ways SMEs can use various ROI opportunities. Five benefits are revealed: increased revenue, improved customer satisfaction, improved employee satisfaction, efficiency and productivity. In addition, the case studies yield 25 significant positive ROIs in numerous use cases where data analytics solutions are implemented to improve revenue or cut costs. The weighted ROI average in this study is 13.44. Thus, most of the investments are highly worthwhile.