Strategic digital transformation from digital value creation to business sustainability in SMEs

Purpose Digital transformation presents substantial opportunities for small and medium-sized enterprises (SMEs) but also necessitates strategic changes. Motivated by value creation, it involves delivering digital offerings through innovative business models. From a resource-based view (RBV), digital transformation creates competitive advantage. However, realizing this potential requires strategies that combine digital technologies with business objectives. Design/methodology/approach This empirical analysis is based on data from 203 Finnish SMEs. The study examines the connection between digital value creation, via digital collaboration and digital channels, and business sustainability, positing that relationships can be mediated through digital strategy measurements. Findings Digital value creation alone does not necessarily lead to positive sustainability outcomes for SMEs. Creating value in digital settings is more complex; however, when combined with digital strategy measurements, its positive effects on the social, environmental, and economic dimensions of sustainability are conveyed. Research limitations/implications The results identify digital strategy measurement as a key capability mediating digital value creation and business sustainability in SMEs. By adopting a RBV lens, this study advances the understanding of the digital transformation–sustainability nexus. Practical implications SMEs should integrate digital value-creation activities into a comprehensive digital strategy and guide them through measurements. Grounding digital strategies in sustainability principles and using effective measurement enables evaluation, implementation, and organizational learning, enhancing strategic success. Originality/value This study shows that digital value creation is insufficient for improving business sustainability in SMEs and establishes digital strategy measurement as essential for conveying its benefits, supporting the pursuit of more sustainable business models.