The Impact of Environmental Sustainability and Digitalization on SMEs’ Financial Performance

Abstract

The complex relationship between sustainability, digitalization, and profitability has received less academic attention, although each of these topics is an important research area on its own. The aim of the research is to understand the effect of environmental sustainability and the usage of management information systems on profitability in the case of SMEs. Based on the answers of 315 SMEs (small and medium-sized enterprises), the article highlights that not all management systems increase profitability. The novelty of the research is that it outlines that the usage of Document Management Systems contributes to profitability while other systems don’t, e.g., the usage of Enterprise Resource Planning systems is not significant, which suggests that its introduction and application no longer represent a competitive advantage; this system alone is not enough. There is an ecosystem of management information systems, the basis of which is document management. The research also highlights that focusing on environmental sustainability has no effect on profitability in the case of Hungarian SMEs, neither in the short term nor in the long term. Thus, it is not a competitive advantage.