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The Impact Of Digital Transformation On Small Business Operations And E-commerce
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What Is A Digital Strategy And How Should It Be Structured?
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Cross Border Data Transfers & Small Businesses
Received: 26 November 2020 / Revised: 28 December 2020 / Accepted: 16 January 2021 / Published: 20 January 2021
In the era of the digital economy, small service businesses struggle to compete in a rapidly changing and dynamic market. Therefore, through digital transformation (DT), small business enterprises seek to increase their competitive advantages, improve business performance, and achieve business growth. With limited resources and talent, a small service business has to deal with several challenges and obstacles. This study aims to find the challenges, and government services, of digital transformation in the small business sector. The study used a qualitative approach involving semi-structured in-depth interviews with senior management of a small service business. Next, we used the content analysis method to analyze the interview data and develop a model. Research has identified four major barriers to digital transformation for small service businesses: lack of funding, lack of digital skills, lack of people, and technical barriers. We identified four government roles to support the digital transformation of small service businesses: building a digital platform for small service businesses, promoting mobile/digital payments, providing digital training, and building a digital collaboration ecosystem. . In addition, based on the results of this study, the model of obstacles and government support for the digital transformation of small businesses is presented. This study presents a conceptual framework and management implications in the field of digital transformation. The results of this study provide information to professionals and suggest that the government can change the current policies and programs to support the digital transformation of the small business sector.
Digital transformation (DT) has become a new way for many companies to gain competitive advantages in the context of strong and dynamic market competition. Many organizations have used digital transformation, which has a positive impact on the organization’s business performance [1, 2, 3, 4, 5] and productivity , resulting in an increase in their size [7, 8, 9]. Digital technology and the Internet have significantly changed the way the market works by reducing the cost of research, transportation, production, business, and finding new market opportunities for “higher market efficiency” [10 ]. Digital technology applications provide developers and entrepreneurs with opportunities for new value creation and value capture  and increase the effectiveness of entrepreneurs . Digital technologies have become drivers of the emergence and growth of small and medium enterprises [13, 14, 15]. Also, digital technologies increase business survival in times of crisis. During the outbreak of Covid-19, many businesses experienced a rapid increase in online sales .
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Despite the positive effects of digital transformation, when adopting digital transformation the organization must address several issues. Digital transformation involves investing a lot of money, with no guarantee of return . Therefore, to increase the chance of success, researchers have encouraged organizations to use technology to create innovations in products, services, processes , and business models [1, 7]. Finally, organizations should consider their business before adopting digital transformation, as well as their business processes. Although digital transformation is a complex process, it is “necessary to compete” for many organizations to ensure their survival through business disruption . However, the level of implementation of digital transformation in small and medium enterprises (SMEs) is still low [14, 19].
Many studies have been done on digital transformation in the last decade. However, most of the studies were in areas related to large enterprises, manufacturers, industries, and data analysis [20, 21]; little was in the small business sector . Small businesses have higher digital challenges than large businesses due to limited resources and limited capabilities . Despite sharing several characteristics of manufacturing industries, service industries also have their own characteristics that distinguish them from others . These processes determine the development activities of the work organization . Therefore, a study on the digital transformation of small service businesses is needed to fill the knowledge gap.
Small businesses face many challenges, including lack of access to capital, lack of managerial skills, lack of technology, limited access to production, and limited infrastructure, which prevent them from expanding and growing. their business [26, 27]. Many studies have looked at the role of the government in the development of small business and business growth, and it has been concluded that the role of the government in supporting small business is important. Unfortunately, the study of the role of government in the implementation of digital transformation is limited. Since small businesses are highly dependent on government policies and programs, the study of digital transformation of small businesses should be integrated with government services to gain a holistic view.
How Digital Transformation Is Driving The Customer Experience
Because of its contribution to the national economy, the government is concerned about small business competitiveness, business performance, and growth. Therefore, the government should promote the implementation of digital transformation in the small business sector. However, according to previous research [14, 19], the digital level of small businesses is still low. Small businesses need policies, programs, and government support to implement digital transformation successfully. However, how the government can help small service businesses to make a digital transformation is still unclear. The study of government services to help small business services is needed to increase the coordination of government programs and programs with small business services needed by implementing the digital transformation. The study was conducted to find policies and programs that the government can make to help the digital transformation of small business services, and to determine how to use the annual government budget to increase the impact of small business services to to achieve the desired goal. adopting technology. .
This study analyzes and presents the concept of complete digital transformation of a small service business based on the literature review and the above definition. This study aims to answer the following research questions:  What are the main challenges and obstacles to the digital transformation of small businesses?  What is the government’s role in supporting the digital transformation of small businesses?
This paper is organized as follows. The second part contains a literature review on digital transformation and small business. In Section 3, the research methodology describes the details of data collection and selection of subjects. Next, Section 4 presents the data, results, and discussion. Section 5 concludes the findings and discusses managerial implications, research limitations, and future research.
Why Your Small Business Needs Digital Transformation
Each country has its own definition of an SME, reflecting its economic characteristics . Although it is difficult to establish a universal definition , the classification of SME groups based on the number of employees, costs, assets, or a combination of these criteria is universally accepted. In Taiwan, an SME is defined as a business with less than 100 employees . SMEs have contributed to the national economy in many countries, and in many cases have become the backbone of the national economy [28, 30]. SMEs contribute to the national economy by creating jobs [31, 32, 33], increasing the gross domestic product (GDP), and developing and maintaining the national economy [34, 35].
In the resource-based view (RBV) of the firm, small businesses have limited resources and capabilities. Therefore, small businesses often cannot compete with large companies using their own resources and capabilities. Recognizing the importance and strength of SME activities, many governments provide special programs, funds, policies, and recommendations for national economic programs to support SME growth and help small businesses gain a competitive edge [36, 37].
Small businesses with limited resources and insufficient capacity can implement digital transformation by adopting third-party digital platform services . Organizations encourage SMEs to increase their capabilities by learning from other partners through collaboration . The government is responsible
Digital Transformation Strategy Online Program
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