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The study investigated the impact of digital transformation on non-financial performance of small and medium-sized enterprises (SMEs) in the City of Mbombela Local Municipality. The study is of quantitative nature and sampled 142 SMEs operating in the municipality. A self-administered, closed ended questionnaire was employed and tested for validity and reliability before collecting data from respondents. The study employed a simple linear regression analysis and performed Cronbach’s Alpha to test the reliability of the instrument. The data was analysed using inferential and descriptive statistics. The study found a statistically significant and positive relationship between operational efficiency and digital transformation of SMEs. Furthermore, there is a positive relationship between business growth and digital transformation of SMEs. However, there is an insignificant relationship between conversion rate and digital transformation of SMEs. The practical implications of the study inform the owners and managers of SMEs that adopting strategic innovative digital technologies improves non-financial performance of the business. Therefore, emphasises the significance of digital transformation aligned with the core business which promotes operational efficiency and growth. The results are expected to persuade SMEs to devote necessary attention to digital technologies implemented within the businesses.

Digital transformation (DT) is becoming essential for the competitiveness and sustainability of Small, Medium and Micro Enterprises (SMMEs), and yet many South African (SA) retailers have to overcome inhibitors that hinder them from digitally transforming. Therefore, this study explores these inhibitors to DT within the retail SMMEs sector in Eastern Cape and Western Cape provinces in South Africa using an exploratory multiple-case study design. Data from 23 in-depth semi-structured purposively sampled interviews were transcribed and thematically analysed on Atlas.ti 25 using the Braun and Clarke six-step framework to produce qualitative themes. The results reveal patterns of digital infrastructure constraints, a lack of digital literacy, financial and cost barriers, technical and operational challenges, psychological and attitudinal resistance, a lack of trust, safety concerns, and cyber risk, as well as business survival and strategic pressures, including the negative impact of the location where the business is located. Phased implementation, partnership with external stakeholders, and other strategic responses to these inhibitors requires targeted and strategic leadership and managerial interventions. This is the first study to combine Limits to Success Architype (LSA) and Adaptive Structuration (AST) in exploring the inhibitors to DT in retail SMMEs in South Africa.

Innovation and small and medium enterprises (SMEs) are associated with economic development and industrial revitalization. Innovation and digitalization have long been established as the primary contributors to improved business performance in SMEs, and digitalization is becoming increasingly regarded as enabling the transformation of business model and operational capabilities. However, South African SMEs face many challenges in adopting digitization and fostering innovation. This paper critically examines how South African SMEs can systematically leverage business innovation and digitalization to acquire sustainable competitive advantage. The study used a systematic literature review approach, focusing on literature published from 2019 through 2024. Through database analysis of academic literature and industry trends, the study aimed to discover the best practices, barriers, and the role of external partnerships in fostering innovation and digital transformation. The findings indicate that SMEs that emphasize innovation and digital technology improve their productivity and competitiveness. However, obstacles including a lack of funding, expertise, and restricted access to technology prevent many SMEs from reaching their full potential. To overcome these obstacles and promote a culture of ongoing innovation, cooperation with outside partners and emphasis on consumer interactions is crucial. This article contributes to innovation in the digital transformation landscape of SMEs by offering approaches and frameworks for South African SMEs to facilitate the adoption of innovation and digitization for sustainable competitive advantage. This addresses a core gap by guiding how to overcome barriers such as constraints of resources and focus on collaborative networks to drive digital and innovative growth.