eng Index terms: digital transformation, digital orientation, strategic planning, technological investments, agility, training, profitability, small and medium-sized enterprises Abstract: Digital transformation has become an essential factor shaping contemporary business processes, particularly within the small and medium-sized enterprises (SMEs) sector, which often faces resource constraints and rapid market fluctuations. The purpose of this study is to explore the impact of digital orientation on SME profitability, considering digital orientation through five critical dimensions: strategic planning, technological investment, budget allocation, organisational agility, and employee training. Although existing frameworks acknowledge the relevance of digital transformation, they frequently lack a comprehensive approach to integrating these dimensions in the context of business performance. The research adopted a quantitative approach, employing a five-point Likert scale based on responses from 740 SME participants. Findings indicate a statistically significant positive correlation between digital orientation and perceived profitability, confirming that a strategic focus on digital resources and employee competency development significantly contributes to sustainable growth within the SME sector. Future research should prioritise support for struggling SMEs through government aid, tailored training, and stronger public-private partnerships. Overcoming these barriers will enable full use of digital technologies and enhance long-term competitiveness. In addition, focusing solely on profitability overlooks other vital indicators such as growth, profit, and market share. Further efforts should aim to bridge the digital divide and promote broader digital transformation across SMEs. http://creativecommons.org/licenses/by-nc-nd/4.0/legalcode https://unilib.phaidrabg.rs/o:10314 doi:10.58245/ipsi.tir.2601.04 ISSN: 1820-4503 2026 Analysis of the impact of digital orientation on the profitability of small and medium-sized enterprises application/pdf 3197607 bytes Lekić, Nemanja Mirjanić, Borjana Redzepagic, Srđan Vapa-Tankosic, Jelena Vapa, Bojan Radulović, Dejan Radulović, Sofija IPSI Transactions on Internet Research volume: 22 number: 1 startpage: 26 endpage: 33 info:eu-repo/semantics/article