Steering digitalization and management control maturity in small and medium enterprises (SMEs)

This paper aims to study the effects (benefits) of digitalization on management control systems and explore the factors affecting the relationship between digitalization and management control systems in small and medium enterprises (SMEs). The study is based on a survey administered to a sample of 132 Italian companies, mainly comprising small and medium enterprises. The findings provide evidence of the significant benefits of digitalization related to company performance improvements and internal and external communication. Furthermore, results reveal that top management, human resources, and financial resources are the main drivers leading to digitalization. Finally, medium-sized companies are found to be more active in digital transformation. The paper addresses the critical point that training people in digitalization, especially in SMEs, is key to getting a more mature Management Control System (MCS) and reaching a higher level of performance. Secondly, widespread digitalization in many company processes is a critical success factor. The originality of the current research lies in the focus on investigating the relationship between digitalization and management control systems in Italian SMEs. Finally, the research sheds light on the drivers and barriers that can lead to or impair improvement in the maturity level of management control systems.