Key Obstacles to Digital Transformation Implementation in SMEs

Kevin Hella Nyapom, David Padi

Abstract: As the business world becomes more digitalized, scholars and researchers explore SMEs? lack of digital transformation (DT). While the SMEs form the backbone of most economies, they have significantly fallen back on digital transformation (DT). This limits SMEs? ability to compete with larger firms? digital capabilities. This review examines the barriers to digital transformation (DT) in small and medium-sized enterprises (SMEs), which are critical to economic growth yet lag in adopting digital technologies. Drawing on existing literature, we identify key obstacles, including limited digital skills, inadequate strategic management, regulatory constraints, stakeholder resistance, and cybersecurity risks. The analysis emphasizes the need for a holistic approach that integrates technical, organizational, and cultural strategies to overcome these challenges. Recommendations include fostering digital literacy, aligning DT with organizational goals, and leveraging government subsidies to enhance SME competitiveness in the digital era.

Keywords: Digital Transformation, SMEs, Digital Skills, Strategic Management, Cybersecurity