Artificial Intelligence-Based Digital Transformation for MSMEs in Bandung City: An Informatics Framework for Business Intelligence and Sustainable Competitiveness
Abstract
Micro, Small, and Medium Enterprises (MSMEs) play an important role in supporting local economic development, employment, entrepreneurship, and community welfare. However, the rapid development of digital technology has created new challenges for MSMEs, particularly in terms of digital capability, data management, artificial intelligence adoption, cybersecurity, and the integration of digital platforms into business processes. This study aims to develop an informatics-based framework for implementing contemporary digital technologies among MSMEs in Bandung City. The study employs a qualitative conceptual approach through a literature review and contextual analysis of digital transformation in MSMEs. The analysis integrates artificial intelligence, machine learning, big data analytics, cloud computing, digital payment, e-commerce, business intelligence, and cybersecurity into an integrated digital transformation framework. The findings indicate that MSME digital transformation should develop progressively from basic digital infrastructure and digital transactions toward data integration, intelligent analytics, and strategic decision support. Bandung City provides an important context for this transformation because of its dynamic economic structure and strong development of trade, manufacturing, creative industries, and information and communication activities. The study argues that artificial intelligence should not be adopted independently from organizational capabilities. Effective implementation requires adequate digital literacy, data quality, technological infrastructure, managerial readiness, and cybersecurity. The proposed framework contributes to the information technology literature by connecting contemporary informatics technologies with practical MSME transformation in an urban Indonesian context. The framework also provides a conceptual foundation for future empirical research examining the relationship between digital capability, artificial intelligence adoption, business intelligence, and MSME performance.
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