Abstract: The integration and penetration of digital technologies into all the industries has driven more and more enterprises to embark on their digital transformation journey. Compared to large enterprises, small and medium enterprises (SMEs) are frequently lacking of resources, such as digital technology, knowledge, etc., hence, the assistance from professional service organizations is often needed to promote their digital transformation. From the perspective of collaborative capability, this paper conducts an exploratory multiple case study on the digital transformation projects in SMEs in Zhejiang Province. The findings show that the larger knowledge gap between SMEs and the professional service organizations would produce a negative impact on the performance of digital transformation, while the effective collaboration between them can relieve the negative impact of knowledge distance on the performance of digital transformation. The conclusions of this study can provide beneficial references for SMEs to improve their performance in the practice of digital transformation through promoting their collaborative capability and reducing the knowledge distance between them and the professional service organizations..

Key words: digital transformation, collaboration capability, small and medium enterprises, knowledge distance