Effectiveness of Digital Transformation and Technology Adoption in Enhancing Financial Sustainability of Small Enterprises: Basis for a Strategic Business Policy

Abstract

This dissertation examines the effectiveness of digital transformation and technology adoption among small enterprises in Lopez, Quezon, focusing on financial sustainability. Its objective is to assess the role of e-marketing, e-selling, and e-payment in enhancing profitability, liquidity, and long-term sustainability, and to develop a Strategic Business Policy Framework that supports micro, small, and medium enterprises (MSMEs) in navigating digital challenges while ensuring competitiveness and growth.

A descriptive-quantitative-correlational research design was employed, using a validated researcher-made questionnaire as the primary instrument. Stratified random sampling was applied to select 274 respondents from 953 registered MSMEs in agriculture, food, and retail sectors. Data were analyzed using frequency, percentage, mean, weighted mean, One-Way ANOVA, Kruskal-Wallis H-Test, and Pearson’s r correlation.

Findings revealed strong adoption of e-marketing, e-selling, and e-payment, which significantly improved profitability, cash flow, and enhanced long-term sustainability. No significant differences were found in adoption and effectiveness when grouped according to age, sex, nature, or type of business. However, educational attainment showed a significant influence, with more educated respondents demonstrating greater adoption and perceived effectiveness. Correlation analysis confirmed strong to very strong positive relationships between digital transformation and financial sustainability.

Digital transformation greatly improves financial sustainability by increasing profitability, ensuring stable cash flow, and supporting long-term business growth. The findings highlight that technology adoption is not just an operational improvement but a strategic requirement for MSMEs to remain competitive and resilient. The proposed Strategic Business Policy Framework focuses on building the skills of business owners through continuous training in digital tools and financial management, strengthening partnerships between government and private sectors to provide reliable internet and technical support, and offering financial assistance programs to reduce the cost of adopting technology. Ultimately, it calls for stronger support and guidance from local government, positioning the framework as a roadmap for sustainable, technology-driven, and growth-oriented enterprise development.