The notion of digitalization and digital transformation is occupying more and more attention in the business world and within the academic community. Digitalization affects much of a company’s organizational strategy, including the development of market opportunities. It brings with it numerous advantages that stand out especially in the age of the COVID-19 virus pandemic. Yet most companies, especially small and medium-sized ones, are struggling to participate in a coherent global process of digital transformation. Digitalization is a tool that encourages the internationalization of small and medium enterprises. However, the integration of digital technology also brings with it a number of challenges such as mandatory investments and changes in the internal practice of companies, which include the mobilization of new resources and the application of specific skills to manage them. Digitalization largely depends on the human factor, so it is important that current and future entrepreneurs are well acquainted with this issue. This paper examines students' perception of the importance of digitalization among students of the Faculty of Economics in Zagreb on the cause of 74 respondents. It was noticed that they identify the human factor, ie the lack of necessary skills and knowledge, as the biggest challenge of digitalization in small and medium enterprises, but they are aware of the importance and advantages of digitalization and digital transformation. A relatively high proportion of respondents believe that they are not well enough acquainted with the concept of digital transformation, and there is room for progress in the transfer of knowledge about this issue in the future.