Knowledge, IT Infrastructure, and Business Performance: The Sequential Mediation of Digital Maturity and Organizational Agility in Saudi SMEs

In the bustling economic landscape of Saudi Arabia, a massive transformation is underway. The nation's Vision 2030 initiative aims to diversify its economy, placing small and medium-sized businesses at the very heart of this change. These companies are expected to grow significantly, contributing much more to the country's wealth than they do today. However, a persistent puzzle has kept many business leaders awake at night: simply buying new computers or hiring people to manage information does not automatically make a company more successful. It is a common belief that if you have the right tools and the right knowledge, you will win. Yet, in the real world of business, having these resources often feels like owning a high-performance engine without knowing how to drive it. The tools sit there, and the knowledge sits in files, but the company does not necessarily move faster or earn more money. This gap between having resources and actually achieving results is the central mystery this research seeks to solve.

To understand how a business turns its assets into success, researchers often look at two main ideas. First, there is the concept of resources, which are the valuable things a company owns, such as its data, its technology, and the skills of its staff. Second, there is the idea of dynamic capabilities, which is the ability of a company to change and adapt quickly when the world around it shifts. The question is not just what a company has, but how it uses what it has to navigate a changing environment. For small businesses in Saudi Arabia, figuring out the exact steps to turn their technology and knowledge into better performance is critical. If they cannot find the right path, their investments may go to waste, and the national goal of economic diversification could stall.

A researcher set out to map this path specifically for Saudi small and medium enterprises. They gathered information from 116 private-sector companies across the kingdom, asking business leaders about their use of knowledge management, their technological setup, and how well their companies were performing. The study focused on a specific sequence of events. It proposed that a company cannot jump straight from having technology to making more money. Instead, it suggested a two-step journey. First, the company must reach a state of "digital maturity," where technology and knowledge are deeply woven into daily routines and decision-making. Only after achieving this maturity can a company develop "organizational agility," which is the ability to sense changes in the market and rearrange its operations quickly to respond. The researcher wanted to see if this specific chain of events—resources leading to maturity, maturity leading to agility, and agility leading to success—was actually happening in the real world.

The analysis of the data confirmed that this sequence is not just a theory, but a reality for these businesses. The study found that knowledge management and technological infrastructure do indeed help a company become more digitally mature. In fact, having a strong technological foundation was a slightly stronger driver of maturity than knowledge management alone. However, the study also found that these resources do not directly boost business performance on their own. Instead, they work through the intermediate steps. Once a company achieves digital maturity, it becomes significantly more agile. This means the company can spot new trends and adjust its internal processes much faster than before. Finally, this agility is what directly drives better business performance, such as increased revenue and profit margins. The data showed that the path from having resources to making money is entirely dependent on this chain: resources build maturity, maturity builds agility, and agility creates success.

This finding challenges the common assumption that buying the latest software or hiring a knowledge manager will instantly improve a company's bottom line. The research indicates that these investments only pay off if they are used to build a mature digital foundation first. Without that foundation, the ability to adapt quickly remains out of reach. For the managers of these Saudi businesses, the lesson is clear: the goal should not be to simply acquire technology, but to integrate it so deeply into the company's culture and operations that it becomes a natural part of how the business runs. Only then can the company become agile enough to thrive in a competitive market. For policymakers supporting the national vision, this suggests that support programs should focus on helping companies build these capabilities and assess their maturity levels, rather than just funding the purchase of equipment.

The study also highlighted the importance of the specific context of Saudi Arabia, where small businesses are being asked to play a larger role in the economy. By proving that this sequential path works in this specific environment, the research provides a practical roadmap for growth. It shows that the journey from a traditional business to a modern, high-performing one requires patience and a specific order of operations. You cannot skip the step of building maturity to get to agility. The results were robust, with the statistical evidence strongly supporting the idea that the chain of events holds true. While the study relied on self-reported data from a specific group of companies, the consistency of the findings suggests a reliable pattern. The researcher noted that while the connection between technology and agility is very strong, future studies could refine how these concepts are measured to make the picture even clearer.

Ultimately, this research offers a quiet but powerful insight into how modern businesses succeed. It moves beyond the hype of digital transformation to show the mechanical reality of how it works. For the small and medium enterprises of Saudi Arabia, the path forward is not about having the most expensive tools, but about mastering the art of using them to become a more flexible and responsive organization. By following this sequence, these companies can turn their knowledge and technology into the engine that drives the nation's economic future, ensuring that the vision of a diversified and prosperous economy becomes a reality.