A Frugal Engineering Approach to Foster Digital Transformation in Emerging Countries: A Digital Inventory Management case study

Abstract

Digital Transformation Processes (DTPs) are essential for companies seeking to remain competitive in an increasingly digitalized environment. While DTPs can enhance manufacturing control and operational efficiency, their implementation often poses significant challenges for small and medium-sized enterprises (SMEs) due to the complexity of available technologies and the substantial investments required. This paper presents a novel methodology for digital transformation based on frugal innovation, specifically designed to address the resource and infrastructure limitations commonly faced by SMEs. Unlike traditional maturity models, which demand comprehensive integration and high costs, the proposed approach offers a structured, step-by-step framework that enables organizations to focus on core functionalities, minimize expenditures, and achieve effective performance using accessible, low-cost digital solutions. The methodology is demonstrated through a case study involving an Argentine SME, where it facilitated rapid and measurable improvements in inventory management. Key capabilities of the frugal approach include modular implementation, adaptability to existing workflows, and the ability to deliver tangible results without extensive technical expertise or financial investment. By targeting the most critical processes and leveraging familiar technologies, the proposed frugal method empowers SMEs to overcome barriers to digital transformation and achieve sustainable operational gains. This work addresses a gap in the literature by providing a practical and scalable alternative for resource-constrained organizations, illustrating how frugal innovation can drive successful digital transformation in realworld settings.

Article history: Received (April 4, 2025); Revised (October 16, 2025); Accepted (November 28, 2025); Published online (January 30, 2026)