THE IMPACT OF DIGITAL TRANSFORMATION ON ENSURING THE FINANCIAL SUSTAINABILITY OF SMB IN A WAR STATE

Abstract

The article explores the significant role that small and medium-sized enterprises play in driving the growth of a contemporary market economy and maintaining socio-economic stability. It evaluates the contribution of SMEs to employment generation, budget revenues, and the promotion of innovative activities. The social impact of entrepreneurship development is also examined, highlighting the emergence of an empowered middle class and greater citizen participation. Focus is given to the Strategy for Recovery, Sustainable Development, and Digital Transformation of SMEs up to the year 2027. The study analyzes key areas such as deregulation, increased access to financial resources, encouragement of innovation, and the adoption of digital solutions aligned with European entrepreneurial standards. The role of digital platforms, particularly Diia.Business, in facilitating SME growth, offering online services, digital marketplaces, and supporting export activities is reviewed. The article presents successful examples of Ukrainian firms expanding into international markets and evaluates their level of digital maturity. It compares flexible business models with traditional ones, emphasizing benefits like faster adaptability, better resource utilization, and stronger customer focus. Challenges in SME project management are identified, including limited flexibility, inadequate digital adoption, and communication difficulties. The paper also addresses practical elements of digital transformation such as CRM and ERP systems, project management software, communication tools, and data analytics services. The effects of deploying advanced digital technologies on enhancing operational efficiency and boosting competitiveness both domestically and abroad are assessed. Additionally, the article highlights international best practices for SME support within the European Union, including tax incentives, grant schemes, and collaborations with research institutions. Overall, the work presents an integrated framework aimed at improving the productivity, efficiency, and competitive edge of small and medium enterprises in Ukraine.