Exploring the factors influencing digital transformation in micro and small-sized enterprises in an emerging country: a sociotechnical systems perspective

Abstract

Purpose Digital transformation (DT) is a multidimensional process that encompasses significant technological, organizational and cultural shifts that aim to enhance business operations, fostering innovation and driving sustainable growth. While substantial research has explored DT in large organizations, the unique challenges and dynamics faced by micro and small-sized enterprises (MSEs), particularly in emerging economies, remain underexamined. This study addresses this gap by investigating the sociotechnical system (STS) factors that influence the capacity of MSEs to implement DT within the context of an emerging market. Design/methodology/approach A multiple case study involving 35 MSEs in southern Brazil was conducted over six months. Data were collected through a comprehensive digital check-up tool, questionnaires and in-depth interviews, all integrated into an innovation project strategically aimed at promoting DT. The study also involved the guidance of four DT experts to ensure analytical rigor. Findings The research identified 40 distinct factors that serve as both barriers and facilitators to DT. The results indicate that MSEs demonstrating improvements across multiple STS dimensions – technical, social, organizational and environmental – are significantly more likely to achieve sustainable digital transformation. The analysis underscores the importance of the interplay between these subsystems in shaping the success of DT initiatives. Practical implications: This study provides actionable insights for MSE managers, policymakers and DT service providers. By understanding the critical interdependencies among sociotechnical subsystems, stakeholders can develop targeted strategies to overcome barriers, enhance digital maturity and optimize technology adoption. These insights are particularly relevant for addressing the unique challenges faced by MSEs in resource-constrained environments. Practical implications The study provides actionable insights for MSE managers, policymakers and DT service providers. Understanding STS interdependencies enables targeted strategies to overcome barriers, enhance digital maturity and optimize technology adoption, particularly in resource-constrained environments. Originality/value This research uniquely applies the STS framework to the DT process in MSEs, offering a holistic perspective on the complex interactions between technological, organizational and social factors. By focusing on an emerging market context, the study not only bridges a critical gap in the literature but also generates practical guidelines for fostering digital transformation in smaller enterprises. The findings contribute to both theoretical advancements in sociotechnical systems research and the development of context-sensitive strategies to support MSEs in their digitalization journeys.

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