The Impact of Digital Transformation on Business Performance: A Study of Pakistani SMEs

Abstract

Business ecosystems are continuously evolving. In this hyper-competitive era, firms are increasingly transforming their business operations through advanced digital technologies. Gone are the days of mere testing and debating the influence of digital transformation and industry 4.0, yet the time has come for actionable steps. Therefore, this study has identified the role of industry 4.0 technologies including big data, cyber-physical systems, internet of things and interoperability, on the performance of Small and Medium-sized Enterprises (SMEs) in Pakistan. A relevant questionnaire was developed and distributed randomly in the cities of Karachi, Lahore, Peshawar, Islamabad, Gujrat, and Sialkot. After applying multiple regression techniques through SPSS, it was found that big data, cyber-physical systems, and interoperability have a significant positive impact to improve business performance, while the insignificant effect of internet of things was revealed. Since the research in the area of digital transformation and industry 4.0 is scant, the current study has contributed novel directions, insights and a framework for future researchers. Moreover, this study will help managers to justify the allocation of resources towards technological infrastructure development in the operations of their firms. Finally, policymakers will find it helpful in order to devise suitable strategies for developing human capital and to enhance their absorptive capacity.

Smart supply chain and firm performance: the role of digital technologies

“…Third, a lack of training causes the administration and workers to feel frustrated with the complexity of the technological training program or materials. These results are in line with Chen et al (2016), B€ uy€ uk€ ozkan andG€ oçer (2018) and Mubarak et al (2019). This study has accepted the hypothesis (H2), which explains that digital transformation positively impacts smart technologies.…”

“…This study has accepted the null hypothesis (H3); the results show that smart technologies positively impact firm performance. The results are in line with Verhoef and Bijmolt (2019), Mubarak et al (2019) and Chege et al (2020). This study has accepted the null hypothesis (H4), indicating that smart technologies play an important role as a mediator between digital transformation and firm performance.…”

How Industry 4.0 technologies and open innovation can improve green innovation performance?

“…Big data is a popular Industry 4.0 technology that can manage large quantities of data such as transmission, collection, structured and unstructured data processing for decision-making as well as storage (Vidgen, 2014). Furthermore, it adopts a systematic approach to identifying and explicates knowledge as original thoughts (Mubarak et al , 2019a, b). Consequently, through the introduction of big data analytics, the credibility and reliability of vendors, partners and other stakeholders may be assessed by evaluating their past performance records, company portfolio and partnerships.…”

Impact of blockchain technology on green supply chain practices: evidence from emerging economy

“…In the current hypercompetitive and technologically advanced era, firms are competing based on their “supply chain networks”. To maintain their competitive advantage and to take the lead in cut-throat competition, firms are effectively looking forward towards technological orientation (Mubarak et al , 2019; Pflaum et al , 2017). Innovative firms are taking the initiative to implement new sophisticated technologies in the development of their products (Ortega, 2010; Pirvulescu and Enevoldsen, 2019b) as per pro-environmental standards.…”