Presenters: Anisa Ilham Permata, Frank Aligarh
Affiliation: Universitas Islam Negeri Raden Mas Said Surakarta
Room: 11
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, Anisa Ilham Permata and Frank Aligarh from Universitas Islam Negeri Raden Mas Said Surakarta presented their research titled “The Role of Digital Capability and Digital Transformation in Enhancing Financial Performance, Flexibility, and Quality of SMEs.” The session, held in Room 11, delved into how digital capabilities and transformation influence the performance of small and medium-sized enterprises (SMEs) in Indonesia.
The study aimed to analyze the impact of digital capabilities and digital transformation on various aspects of SME performance, including financial performance, flexibility, and quality. A total of 140 questionnaires were distributed to SME operators in Solo Raya, with 116 valid responses used for analysis. The data were processed using structural equation modeling.
Key findings from the research include:
- Digital Capabilities: The study revealed that digital capabilities positively affect financial performance and flexibility of SMEs. However, digital capabilities alone do not significantly impact the quality of performance.
- Digital Transformation: The research found that digital transformation has a positive effect on financial performance, flexibility, and performance quality. This underscores the importance of not just having digital capabilities but also undergoing comprehensive digital transformation to achieve overall business improvement.
The study contributes both theoretically and practically:
- Theoretical Contribution: It offers a new research model that elucidates the relationships between digital capabilities, digital transformation, and SME performance. This model helps in understanding how these factors collectively influence various dimensions of business performance.
- Practical Implications: The findings provide valuable insights for SME operators, suggesting that focusing on digital transformation can drive improvements in financial performance, flexibility, and quality. It emphasizes the importance of leveraging digital opportunities to enhance business outcomes.
Permata and Aligarh’s presentation highlights the critical role of digital transformation in maximizing the benefits of digital capabilities for SMEs. Their research provides actionable recommendations for business operators to navigate the digital landscape and improve their overall performance.