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Abstract

The failure rate of digital transformation (DT) projects is as high as 70% according to McKinsey (Bughin et al., 2020). This high failure rate of DT projects may be because there is too great a focus on the direct impact of technology on performance that neglects the organization. Such determinism is most problematic for Small and Medium Enterprises (SME). As opposed to large organizations, SMEs are more involved in operations rather than in strategic planning, because of pressures for short-term financial results or simply for survival concerns (Hudson et al., 2020). As a result, the objectives of digital transformation initiatives in SMEs are not business model innovation but cost reduction in operations (Bianchi et al., 2020). SMEs need more availability of human capital of any kind, and not only in digital skills. Also, SMEs need more elaborate performance measurement management systems. More precisely, the objective of digital transformation for SMEs is related to operations and service delivery improvement (17%), market growth and expansion (17%), better customer experiences (16%), and new product and service improvement (14%) (Barnard et al., 2017). The COVID-19 crisis has complicated the SME context, as it is associated with changes in work styles (13%), employee safety (12%), cash flow (11%), sales performance (11%), production (10%) customer engagement (9%) and supply chain and logistics (8%) (Garengo & Biazzo, 2022). In their focus on large organizations, Consulting Groups emphasize customer experience and digital talent (Bughin et al., 2020), but customer experience is not as important to SMEs as cost reduction, operations, performance management systems, and, more recently because of COVID19, changes in work styles and employee safety (Garengo & Biazzo, 2022). Talent is also important to SMEs, but not just in the digital realm, but also in in sales, production, and Research and Development (Hudson et al., 2020). This TREO talk will include a gathering academic and practitioners from different countries such as China and the USA to discuss how to overcome high failure rates of digital transformation in SMEs and how IS research can work to solve the mismatch between SMEs' requirements for digital transformation and the definitions provided by large consulting groups.

Paper Number

tpp1251

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