Reconciling digital transformation and sustainability: Towards a tailor-made strategy for manufacturing SMEs

This paper addresses the lack of a comprehensive model for assessing the benefits of Industry 4.0 (I4.0) in small and medium-sized enterprises (SMEs), considering their diverse priorities and objectives. SMEs struggle to balance economic growth and environmental constraints, amid tightening regulations. Existing digital performance models focus on technology integration but rarely align outcomes with SMEs’ strategic goals, particularly regarding environmental performance. This study proposes an adaptable model that integrates digital performance dimensions with sustainability indicators, aligning with the Triple Bottom Line (TBL) framework to evaluate the economic, social, and environmental impact of digital transformation in SMEs. Using data from 30 Quebec-based SMEs and hierarchical clustering, we identify groups of companies sharing similar operational realities, resources, and objectives. Clusters inform model customization. The proposed model thus measures I4.0’s effects on economic, social, and environmental aspects, providing a structured approach to prioritize digital transformation initiatives.