Change Management Challenges in SME Digital Transformation Initiatives

Abstract

This study examines the unique change management challenges faced by small and medium-sized enterprises (SMEs) during digital transformation initiatives. While digital transformation is often approached from a technological perspective, this research emphasizes the human and organizational factors that determine success or failure in resource-constrained SME environments.

The primary purpose is to identify, categorize, and analyze the most critical change management barriers specific to SMEs undergoing digital transformation. The study aims to provide actionable insights for SME leaders, consultants, and policymakers to better navigate the people-centric challenges of technological adoption.

A qualitative multi-case study approach was adopted, involving semi-structured interviews with owners, managers, and employees across 12 SMEs in various sectors currently undergoing or recently completing digital transformation projects. Supplementary data was collected through document analysis and participant observation. Thematic analysis was used to identify recurring patterns and challenges.

Successful digital transformation in SMEs is less dependent on technological sophistication and more on effective, empathetic change leadership. SME-specific advantages—such as organizational agility and closer interpersonal relationships—can be leveraged to overcome challenges. Practical mitigation requires visible leadership, continuous communication framed around employee benefits ("WIIFM"), incremental implementation, and investment in ongoing peer-supported learning. Future research should explore sector-specific frameworks and the role of digital coaching in SME contexts.