Frugal Digital Transformation Strategies and Their Impact on Resource-Constrained SME Agility Post-COVID-19

• Billy Elly

  Lautech

  Author

The post-COVID-19 recovery period has intensified pressure on small and medium enterprises (SMEs) to digitalize, yet resource-constrained SMEs face persistent barriers of limited capital, thin digital talent pools, and fragmented infrastructure that render conventional transformation models inaccessible. While prior research has established a general link between digital transformation and organizational agility, the specific mechanisms through which frugal digital strategies—low-cost, modular, and bricolage-oriented approaches—translate into agility gains for resource-constrained SMEs remain underexplored. This study addresses this gap by developing and empirically validating a Frugal Digital Transformation (FDT) framework that models the relationship between resource-efficient digital adoption and post-pandemic organizational agility. Using a mixed-methods design combining a systematic literature synthesis with a quantitative survey of 312 resource-constrained SMEs across manufacturing and service sectors, the study identifies three frugal strategy clusters: modular tool adoption, digital bricolage, and ecosystem leveraging. Results indicate that frugal strategies collectively explain 89.4% of the variance in organizational agility outcomes, with modular adoption emerging as the strongest predictor (β = 0.47, p < 0.001), followed by ecosystem leveraging (β = 0.32) and digital bricolage (β = 0.21). The findings challenge the capital-centric view of digital transformation and offer a replicable framework for SME managers and policymakers seeking to foster agility through resource-conscious digitalization pathways

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Copyright (c) 2026 Billy Elly (Author)

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