Cost-effective digital transformation of SMEs through low-cost digital solutions

Digital transformation is the process of using digital technologies to enhance business processes. Although digital transformation has become significant for the sustainability of Small and Medium-sized Enterprises (SMEs), they are challenged by the barriers to digitalisation due to their limited resources, and the complexity of equivalent commercial solutions. Low-cost digital solutions are often tailored to meet the requirements of SMEs to initiate their digital transformation. However, there is a lack of studies about the cost-effectiveness of acquiring low-cost digital solutions compared to off-the-shelf commercial tools, particularly for SMEs. This study demonstrates the cost-effectiveness of low-cost digital solutions for SMEs through a real-world case study performed in a sustainable building components manufacturer and off-site construction SME. We developed a low-cost inventory tracking solution using a so-called `Digital Shoestring' approach, which provides a template for designing digital solutions based on low-cost readily available hardware and software components. The time/effort and cost spent on designing and developing the digital solution were compared with potential off-the-shelf commercial inventory tracking solutions. The results showed that the low-cost inventory tracking solution facilitated the digital transformation of the construction SME in a cost-effective manner. Moreover, the inventory tracking solution was tailored based on the user requirements of the SME, thereby making it more suitable for their day-to-day operations.