The Effect of Digital Transformation on Saudi Arabia SMEs

Abstract

Abstract

Digital Transformation is the process of holistic digitisation of institutional, organisational, or business activities with the objective to migrate away from traditional ways of manual operations. For businesses, digital transformation can be an expensive and complicated procedure, but it adds and creates value both for the business and its consumers. Saudi Arabia has stated their intention to undergo nationwide digital transformation, but they face the challenges of a developing nation in terms of their economic, social, and cultural ability to adopt new and expensive technology. This research intends to identify what impact digital transformation might have on small and medium sized enterprises (SMEs) in Saudi Arabia, by conducting a survey on consumers of SMEs, and through semi-structured interviews of SME owners and National Digital Transformation Unit (NDU) agents. The research findings indicate that while consumers prefer a digital platform for interacting with SMEs, their trust on the security of digital platforms are yet to be established. Both SME owners and NDU agents believe that digital transformation is the future for Saudi Arabia, even though there are implications that digital transformation might drive other smaller businesses in the SME spectrum out of business. Digital transformation is expected to have a high impact on most of the industries in Saudi Arabia. This research is unique in its way that it explores the impact of digital transformation in a developing nation while it is underway, and thus providing valuable real time data for future research on the subject.