The impact of digital transformation on the non-financial performance of small and medium-sized enterprises in the city of Mbombela local municipality, South Africa

Abstract

The study investigated the impact of digital transformation on non-financial performance of small and medium-sized enterprises (SMEs) in the City of Mbombela Local Municipality. The study is of quantitative nature and sampled 142 SMEs operating in the municipality. A self-administered, closed ended questionnaire was employed and tested for validity and reliability before collecting data from respondents. The study employed a simple linear regression analysis and performed Cronbach’s Alpha to test the reliability of the instrument. The data was analysed using inferential and descriptive statistics. The study found a statistically significant and positive relationship between operational efficiency and digital transformation of SMEs. Furthermore, there is a positive relationship between business growth and digital transformation of SMEs. However, there is an insignificant relationship between conversion rate and digital transformation of SMEs. The practical implications of the study inform the owners and managers of SMEs that adopting strategic innovative digital technologies improves non-financial performance of the business. Therefore, emphasises the significance of digital transformation aligned with the core business which promotes operational efficiency and growth. The results are expected to persuade SMEs to devote necessary attention to digital technologies implemented within the businesses.