In the current issue of KMU Magazin, Ann-Christine Schulz and Sebastian Eschenbach (FHWien der WKW) – together with Anne Busch (FH Wiener Neustadt) – explore the strategic challenges facing small and medium-sized enterprises (SMEs) as a result of digitization. They also show which strategic options are available for SMEs.
Complexity, uncertainty and limited resources as challenges for SMEs
Many SMEs are currently asking themselves how they should deal with new, digital technologies. While numerous innovations offer new opportunities, many established business models are being changed or displaced by digital transformation. In-depth interviews with experienced owners of Austrian SMEs from different industries reveal four strategic challenges. As a result, the owners are experiencing different changes in the competitive environment. They are responding to the increased expectations of customers and the growing competitive pressure with the use of digital technologies and the development of digital competencies. In the process, new leadership requirements are emerging within the companies. In addition, the pace of digital transformation processes and some “technology hype” is perceived as very high by decision-makers. This complexity and uncertainty pose enormous challenges for SMEs with their already limited resources.
How can SMEs respond adequately to these changes?
First, a strategic reflection process analyzes their own position and the threat posed by digital transformation. Possible potential for digitization among end customers, cooperation with other companies, or integration into business ecosystems can lead to a new strategy and a future-oriented business model. For the subsequent necessary change process in the company, the authors recommend a conscious use of the ”organizational ambidextry” approach. It is important to promote and balance the two “learning modes” of innovation and efficiency in the company. Time and/or personnel resources should be made available for innovative activities. Attention must also be paid to the efficiency and profitability of the core business.
In this way, the digital transformation with corresponding strategic changes can turn from a great challenge into a great opportunity for SMEs.
Related Links
- To the article in KMU Magazin (in German)
- To the study “Fit for the future? How companies can master the digital transformation” (in German)
- To the project “Organizational Ambidextry in SMEs”