The Impact of Legacy System Digitization on Organizational Agility in Post-Pandemic SMEs

• Abiodun Okunola

  Ladoke Akintola University Technology

  Author

The post-pandemic business environment has compelled small and medium enterprises (SMEs) to accelerate digital transformation, yet many continue to operate with legacy systems that constrain their capacity to respond to market volatility. While prior research has examined digital transformation and organizational agility broadly, the specific mechanism through which legacy system digitization contributes to agility outcomes in resource-constrained SMEs remains underexplored. This study addresses this gap by developing and validating a predictive framework that models the relationship between legacy system modernization and organizational agility, drawing on a cross-national dataset of 491,636 SME technology adoption records and integrating Technology-Organization-Environment (TOE) and dynamic capabilities perspectives. Using machine learning techniques including Random Forest, XGBoost, and ensemble models, the study identifies production technologies (automation, digital infrastructure) as stronger predictors of agility than consumption-oriented tools. The Random Forest model achieved the highest predictive accuracy (Test R² = 0.6249), demonstrating that legacy system digitization accounts for substantial variance in agility outcomes. Key findings indicate that foundational digital infrastructure investments yield disproportionately higher agility returns than customer-facing applications, challenging conventional digitalization priorities. The study contributes a replicable, theory-driven predictive framework for SME digitization strategy and offers actionable guidance for administrators and policymakers seeking to optimize agility through targeted legacy system modernization.

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Copyright (c) 2026 Abiodun Okunola (Author)

This work is licensed under a Creative Commons Attribution 4.0 International License.