THE DIGITAL TRANSFORMATION PROCESS IN THE SMALL AND MEDIUM ENTERPRISE (SME) SECTOR IN THE ERA OF THE COVID-19 PANDEMIC: A STUDY IN POLAND AND CROATIA

This paper aims to explore the extent to which the pandemic has forced SMEs to accelerate their digital transformation efforts to remain competitive and adapt to the changing business landscape. The focus is set on three key research questions: (i) How did digitalization manifest itself in SMEs before the pandemic outbreak? (ii) how did SMEs' digital transformation evolve during the pandemic? and (iii) what business challenges do SMEs face in the post-COVID period due to the acceleration of digital transformation? For the empirical investigation, qualitative research methods are used as in-depth interviews in 10 SMEs in Poland (six) and Croatia (4). The main results emphasize three main findings. First, even before the pandemic, SMEs recognized and used various digital transformation technologies to improve their business processes and performance. Second, the development of digitalization processes in the observed SMEs during the pandemic was mainly driven by the need for remote work, e-commerce, virtual events, and automation of business relationships among all stakeholders. Third, the post-pandemic world confirms the need for SMEs to invest in cybersecurity, talent acquisition, infrastructure, customer engagement, and data privacy to remain competitive in the digital economy.