The Impact of Digital Transformation on Small and Medium-Sized Enterprises (SMEs) in Kenya
Keywords:
Digital transformation, small and medium-sized enterprises (SMEs), digital skills, infrastructure.Abstract
Aims: This study examined the impact of digital transformation on small and medium-sized enterprises (SMEs) in Kenya. Specifically, it sought to assess the level of digital transformation adoption among Kenyan SMEs, explore the benefits, challenges, and opportunities associated with digital transformation, and examine the relationship between digital transformation and business outcomes.
Methods: A mixed-methods research design was employed, combining quantitative and qualitative data collection and analysis techniques. A sample of 150 SMEs in Kenya was surveyed using structured questionnaires to gather quantitative data on digital transformation adoption and business outcomes. In-depth interviews were conducted with SME owners, managers, and industry experts to collect qualitative data on the benefits, challenges, and opportunities of digital transformation. Data were analyzed using descriptive statistics, regression analysis, and thematic analysis.
Results: The quantitative analysis revealed that 68% of the surveyed SMEs had adopted digital transformation initiatives to some extent, with mobile applications, cloud computing, and data analytics being the most commonly adopted technologies. Higher levels of digital transformation adoption were found to be significantly associated with improved revenue growth, enhanced operational efficiency, and increased customer satisfaction. The qualitative analysis identified benefits such as improved customer engagement and decision-making, but also highlighted challenges such as limited access to financing and digital skills gaps.
Conclusion: Embracing digital technologies can lead to improved business outcomes and enhanced customer experiences. However, challenges related to financing, digital skills, and infrastructure hinder the successful adoption of digital transformation in SMEs.
Recommendations: To support Kenyan SMEs in their digital transformation journey, Kenyan government should enhance access to financing, foster digital skills development, strengthen digital infrastructure, facilitate collaboration and knowledge sharing, promote awareness and foster public-private partnerships.
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