The transformation towards digitization, also known as Industry 4.0, is a significant trend in the manufacturing sector. It promises substantial benefits such as competitive advantage, enhanced customization, high-quality products, reduced costs, and shorter lead times. However, for Small and Medium- sized Enterprises (SMEs), this transition is more challenging compared to larger corporations. SMEs face barriers, including limited resources, inadequate technical infrastructure, and organizational resistance to change. The study concludes that a more holistic approach is essential for SMEs to successfully transition to a digitalized environment. By understanding the interrelations and external and internal dependencies within their business models, SMEs can make informed decisions and develop effective digital strategies. By adopting a Systems Thinking approach, SMEs can gain a holistic understanding of these challenges and develop strategic solutions to address them. It allows SMEs to view their business models comprehensively, considering all elements and their interconnections. This approach helps in identifying interdependencies, revealing previously unnoticed relationships, and designing effective digital strategies. The value addition of this approach lies in its ability to provide a clear roadmap for digital transformation, addressing both internal and external challenges faced by SMEs.
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