Competencies Matter for Digital Transformation and Operational Performance in Nepalese SMEs

This study investigates the effect of individual and organizational competencies on digital transformation implementation and operational performance in small and medium-sized enterprises in Nepal. Regression analysis with a small sample size is used to test the proposed research model and hypotheses utilizing data collected from 154 employees of SMEs in Nepal. The results of this study showed that individual capabilities measure of information and communication technology skills, change acceptance, and technology acquisition have positive relationships with digital transformation implementation in Nepal’s SMEs. In addition, the study’s results indicated that organizational infrastructure, top management’s willingness, and organizational support as a part of organizational capabilities positively affect digital transformation implementation. As individual and organizational capabilities are confirmed to be the drivers of DX implementation, firms should develop manuals and guidelines to understand employees’ work processes and improve work efficiency. Digital transformation implementation positively affects operational performance in Nepal’s small and medium-sized enterprises. The significance and value of this study lies in its potential to serve as fundamental guidance for corporations seeking to implement digital transformation and organizations contemplating adopting digital transformation strategies effectively.