Transformation strategies like adopting lean business models or diversifying revenue streams can reduce cost dependencies. For example, shifting to subscription-based services or digital marketplaces lowers reliance on volatile supply chains. Data shows that Small and Medium Enterprises adopting digital transformation reduced operational costs by 15-20% on average. 

A transformed business model, such as pivoting to high-growth sectors like green tech, can attract investors or grants. Data from 2024 shows Small and Medium enterprises with clear digital transformation plans were 30% more likely to secure venture capital. 

Transformation often involves adopting secure, cloud-based platforms and AI-driven analytics, improving data management, and reducing breach risks. According to a 2025 cybersecurity report, Small and Medium Enterprises that transformed their IT infrastructure reported a 25% drop in cyber incidents. Yet, the complexity and cost of implementing new systems can be prohibitive without proper guidance, especially with limited IT budgets.

Transformation can include proactive compliance strategies, such as adopting software for tax reporting or environmental audits. According to a 2025 compliance study, SMEs using compliance tech reduced regulatory fines by 18%. However, transformation alone cannot address systemic regulatory complexity, which requires policy-level reform to alleviate the burden on Small and medium-sized Enterprises.