Relevance: Digital transformation (DT) has become a central concern in contemporary business strategy, yet a persistent gap remains between its recognised importance and consistently low success rates, particularly among manufacturing SMEs. Existing research tends to focus on technological and operational aspects, often overlooking the strategic and human dimensions necessary for effective implementation. This fragmentation limits both theoretical integration and practical applicability. Design / methodology / approach: To address this gap, our study develops a comprehensive taxonomy of DT in the context of industrial SMEs. Drawing on a systematic literature review of 701 journal articles, we identify three interrelated dimensions—value-based, organisational, and human—and further decompose these into 12 characteristics and 18 lower-order characteristics. In addition, we introduce the concept of “value creation paths” to illustrate how firms can align DT initiatives with strategic objectives. Findings: Our findings reveal a strong imbalance in the literature, with disproportionate emphasis on technological artefacts relative to value creation and human factors. While barriers and human aspects are well documented, they do not sufficiently explain persistent failure rates. We therefore advance a critical realist perspective, proposing that underlying, non-observable structures and mechanisms may play a decisive role in DT outcomes. Practical implications: This study contributes to strategic management literature by offering an integrative framework that links technological, organisational, and human dimensions of transformation, while also opening new theoretical avenues through Critical Realism.
Weber et al. (Fri,) studied this question.