SMB Understanding of Digital Transformation Grows, But Challenges to Taking Action Remain

SMB Group just wrapped up our U.S. Small and Medium Business Digital Transformation Study. This is the second version of the study, which we originally conducted in 2017.

We are seeing some very interesting trends in how small and medium businesses (SMBs) view and actions regarding digital transformation have evolved over the past two years. 

SMBs Increasingly Recognize the Impact of Technology On Their Businesses 

SMBs recognize that technology is radically reshaping businesses and industries.

The percentage of respondents that said they agreed or strongly agreed that “technological changes are reshaping our business practices/business model” jumped from 73% in 2017 to 81% in 2019. Similarly, the percentage of respondents that said they agreed or strongly agreed that “technological changes are reshaping our industry” rose from 76% in 2017 to 84% in 2019.


A Majority of SMBs Now Say They Know What the Term Digital Transformation Means

SMB familiarity with the term digital transformation has almost doubled in the past two years.  The percentage of respondents who said that they “have heard of it, and understand what it means” climbed from 33% in 2017 to 57% in 2019. And, in 2019, only 10% of respondents indicated that they had never heard the term. 


Phase of SMB Digital Transformation 

In both our 2017 and 2019 Digital Transformation studies, we asked respondents if they’d heard of digital transformation. After that, we provided the following definition of digital transformation to align the rest of their responses around a common meaning for the term:

Digital Transformation: how businesses use digital technologies to create new/modify existing business processes, practices, models, culture and customer experiences. 

We then asked respondents to describe their company’s level of activity regarding digital transformation. As shown on Figure 3, among SMBs that have heard about digital transformation, the percentage currently implementing initiatives in this area has risen from 36% in 2017 to 46% in 2019.

However, the percentage of those planning new activities has dropped from 48% to 39%, and the percentage of SMBs with no plans has held fairly steady.

This indicates that while some of the SMBs that had been planning to execute on digital transformation initiatives have done so, others remain stuck in the planning phase.

In addition, the percentage of SMBs that strongly agree that their company has a well-defined digital business strategy has dropped from 23% in 2017 to 19% in 2019, another indication of the difficulty many SMBs face in grappling with this transition. 

Obstacles for SMB Digital Transformation

Survey results show that the same obstacles that prevented SMBs from using technology to support business goals in 2017 continue to hinder them in 2019. In 2019. respondents rank the following as their top 3 challenges:

  1. Difficult to integrate new technologies with existing systems
  2. Hard to figure out which solutions will help us
  3. Not enough IT skills/staff to support new technology. 

These challenges underscore that SMBs will need much more strategic and tactical support from vendors to plan and implement new projects. 

An In-Depth View of SMB Digital Transformation 

These are just a few key insights from our research. The full U.S. Small and Medium Business Digital Transformation Study offers a detailed picture of SMB attitudes, appetite, readiness, priorities and requirements for business and digital transformation, including:

  • Drivers and challenges for digital transformation
  • Specific current and planned technology business transformation initiatives
  • Perceived value of current and planned technology business transformation initiatives
  • Technologies used and planned in digital transformation projects
  • Budgeting and decision-making
  • Perceptions of leading technology vendors 
  • Areas in which SMBs are investing in entirely new solutions, versus areas in which they’re augmenting existing solutions. 

The study also analyzes differences based on company size, age of business and industry.

Want More Information?

Results from this study provide technology solution vendors with essential information to help develop, plan, position and market products and services for SMBs.

SMB Group’s Retainer clients automatically receive study results as part of their retainer service. The study is also available for purchase separately. Please contact Lisa Lincoln for a full table of contents, methodology, study pricing, and any other information: or (508) 734-5658.

© SMB Group, 2019

Source: Laurie McCabe’s Blog

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