This study analyzes the process of traditional to digital business transformation in Micro, Small, and Medium Enterprises (MSMEs) in Indonesia using a qualitative approach and secondary data. The purpose of this study is to evaluate the impact of digital transformation on MSME performance, identify the challenges faced, and propose strategies to overcome these challenges. The results show that the adoption of digital technology can improve operational efficiency and expand the market reach of MSMEs. However, there are several obstacles in this transformation process, including limited human resources skilled in digital technology, high investment costs, and resistance to change. To overcome these challenges, it is recommended that MSMEs improve human resource training, collaborate with technology providers, and develop effective change management strategies. This study provides insights and recommendations for MSMEs who want to utilize digital technology for sustainable growth and development.
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