This study examines the drivers of digitalisation and the impact of digitalisation on the organisational agility and business performance of small and medium-sized enterprises (SMEs) in three of Australia’s high-employment service sectors (viz. professional services, healthcare services, and construction services). This study offers insights into the factors driving SME digitalisation and its effects on organisational agility and business performance, and underscores the oft-overlooked role of various environmental forces in facilitating digitalisation in SMEs. By employing a modified Technology-Organisation-Environment framework and by conducting iterative tests on structural models, it is found that the ‘within-firm’ factor of digital capability and some ‘external/environmental’ factors (government support, competitive intensity, and stakeholders), strongly and positively influence digitalisation. Digital capability significantly affects digitalisation across all three sectors, while the impact of the other antecedents varies between these sectors. Moreover, the positive relationship between digitalisation and organisational agility, as well as business performance, is consistently supported across all three sectors.