The Rationale and Factors of Digital Transformation of Small and Medium Enterprises in Bangkok Metropolitan

Abstract

Background and Aim: The transition to the digital age is the process of integrating digital technologies across all aspects of an organization, from work processes and business models to how value is delivered to customers. This allows organizations to adapt and remain competitive in an era where technology is rapidly changing. It can be said that this transformation enhances work efficiency, as digital technology automates repetitive tasks, reduces costs, and increases the speed of operations. It also supports improving customer experiences by analyzing customer data, enabling businesses to better understand customer needs and improve products and services to meet customer expectations. Additionally, it fosters the creation of innovations, with digital technology serving as a key tool in developing new products and services that cater to market demands. This study employs a quantitative research methodology, with two primary objectives: (1) to study the level of importance of each component of technology, organizational structure, business environment, digital transformation, and business model evolution among small and medium-sized enterprises (SMEs) in Bangkok; and (2) to investigate the interrelationships and influence between latent variables in technology, organizational structure, business environment, digital transformation, and business model innovation within these enterprises. The research incorporates both descriptive statistics, using percentage-based analyses, and inferential statistics, applying Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) to test the hypothesized relationships and model fit.

Materials and Methods: This research used a questionnaire as a tool for data collection, consisting of six sections. Section 1 includes open-ended questions, where respondents can answer according to their actual situation. Sections 2 to 6 contain closed-ended questions, with the answers evaluated using a Likert scale. The target population consists of operators of small and medium-sized enterprises (SMEs) in the Bangkok area. The sample size was determined to be 20 times the number of observed variables. Therefore, with 24 observed variables in this research, the sample size was 480 respondents. The result of the IOC test was 0.87, and the reliability test result was 0.766.

Results: The analysis of organizational variables revealed the most important question regarding employee involvement. For business environment variables, the most important question concerns competition pressure. In the technology variables, the most important question was about financial resources. In terms of digital transformation, the most important question was about the adoption of digital technologies. Regarding business model changes, the most important question was about expanding new sales channels. The most significant influence path was the one between the organizational variables and technology variables, with a coefficient of 0.85. The overall fit index was: c²/df=0.295, GFI=1.00, NFI=0.98, CFI=1.00, RMSEA=0.0071.

Conclusion: Digital transformation is crucial for the growth of organizations by integrating online communication systems and various online technologies. This helps create value, new experiences, and wider access to consumers, leading to new business models. Therefore, new business models arise from the combination of technological innovation, expertise, and the use of both tangible and intangible assets. This approach can generate profits and create new ways of conducting business.