Is There A Place for AI in Small to Medium Businesses?

Many small to medium business owners view artificial intelligence as something only huge corporations need.

In reality, it can help position them to compete with those corporations on a whole new level.

It seems like everyone in the business world is launching artificial intelligence programs.

That’s partly because nearly everyone is. 61% of businesses have already begun using some form of artificial intelligence, many of those focusing on predictive analytics and machine learning.

71% report they plan to expand their use of predictive analytics and other AI applications over the next year.

For most companies the decision to adopt AI is an easy one.

For small to medium businesses (SMBs), though, there are tough questions to answer.

Even successful SMBs don’t have the same depth of financial resources as a multinational corporation.

They need to invest cautiously, and artificial intelligence can sound like a science fiction daydream.

That’s unfortunate, because artificial intelligence is fast becoming the kind of tool that can help small to medium businesses keep up with their larger competitors.

Read on to explore the things keeping SMBs from investing in artificial intelligence. then find out how to get past them and what technologies are best suited for small to medium businesses.

Practical Artificial Intelligence

“Artificial Intelligence” brings to mind futuristic robots and complex movie plots, but the reality is much simpler.

The term refers to teaching machines to “think” and interpret information like humans do. Humans have very flexible minds.

They can handle a variety of rapidly-changing topics and navigate difficult conditions that confuse computers (although computers have a greater ability to process repetitive data quickly and accurately).

Modern artificial intelligence has come a long way.

It can’t quite mimic human thought yet, but there have been some exciting advances using AI techniques like machine learning and deep learning that show potential for nuanced processing.

The technology is proving its value as an enterprise tool, too.

There are a few common applications that some people don’t realize are based on artificial intelligence:

  • Predictive analytics, especially embedded features in enterprise software
  • Chatbots on websites or social media pages
  • Intelligent assistants in office and productivity software
  • Recommendation engines used for suggesting Netflix titles and upselling in ecommerce

What Holds SMBs Back

Even as larger companies move to wider integrations of artificial technologies, small to medium businesses are slow to adopt.

Their hesitation is understandable – after all, a failed technology project could threaten the future of their company – but it also holds them back.

The truth is, many of their concerns aren’t as serious as they think.

The issues have practical workarounds or can otherwise be mitigated through proper planning.

Here’s why the leading reasons SMBs aren’t adopting artificial intelligence don’t have to be unmovable roadblocks to progress and how they can be overcome.

AI is too expensive

Industry news reports tend to cover high-end artificial intelligence ventures done by major international corporations, with price tags in the millions (or occasionally billions).

That kind of investment is an intimidating prospect for an SMB who just needs a better way to utilize their data.

The thing is, those programs usually involve the most difficult and expensive forms of AI.

Experimental programming, complex interactions, sensitive health information, government-regulated data, huge amounts of simultaneous users, and other complicating factors raise the costs above the average for enterprise AI projects.

SMBs don’t need the same amount of scale or infrastructure. Their modest needs can be met at a much more reasonable price point.

There is no “usual” price for AI. The costs associated with artificial intelligence are based on many factors, including safety and regulatory protocols and the complexity of necessary interactions.

To build an estimate, developers will ask questions such as:

  • Does the program need access to sensitive information?
  • Is it designed to address a specific set of circumstances or is it more a broad-spectrum tool?
  • What level of interaction with humans is desired?
  • What’s the scale involved?
  • Will the AI need to perform complex actions?

Even when a full artificial intelligence program is out of reach, there are ways to integrate AI on a limited budget.

For one thing, AI is included in many enterprise software packages. Most companies already have access to some AI tools, even if they don’t realize it.

Targeting tools in email marketing software and personal assistants on smartphones are both driven by artificial intelligence.

More in-depth AI toolsets are often available with a reasonably-priced software upgrade to enterprise level from free or lower-tier accounts.

It’s work checking with vendors to see what’s within reach.

The rise of reusable code and powerful development frameworks has put small-scale custom solutions within reach, as well.

Developers have platform options for creating analytics dashboards and chatbots that makes the costs approachable for SMBs.

AI isn’t ready for enterprise because the projects fail too often

Project failure is a daunting prospect for SMBs, who usually have a longer list of desired business improvements than they have capital to spend.

They need to prioritize projects because they can’t do everything they’d like.

Investing in AI means putting another project on hold, something they aren’t willing to do when it seems like all they hear about is failed artificial intelligence projects.

It’s easy to become discouraged by high-profile AI failures or assume tools are overhyped, because some projects do fail and some tools are overhyped.

Artificial intelligence is at a point in the Hype Cycle where its applications are being rigorously tested, and some won’t make it through to becoming everyday technologies.

However, project failure is more often an organizational issue instead of a technological one.

Projects fail for a variety of reasons, most commonly:

  • A weak discovery process results in a weak final product.
  • Internal adoption rates are too low to realize the project’s potential.
  • Misaligned business goals lead to the company creating a product that no longer fits within their workflows.
  • The company experiences an outsourcing failure or developer issues.

Avoiding these issues is somewhere small to medium businesses may have an edge over larger corporations. Why?

  • Pushing internal adoption on a small team is more effective because the company leadership can personally talk to everyone (or at least every team leader) to convince them of a project’s value.
  • There is less opportunity for confusion over business needs and goals.
  • The development process has fewer moving parts, so it’s easier to make needs clear during discovery.

What SMBs need to watch out for is the tendency to default to the lowest bidder, especially when outsourcing overseas.

If they focus on quality as much as price, they’re more likely to get a quality return on their investment.

Choosing Agile development methods is another way to ensure a positive outcome.

Developers who use Agile and conduct a thorough discovery are actually seeing a rise in project success rates, and have been for a couple of years.

AI isn’t practical for a small to medium business; it only works for massive corporations.

Many SMB owners see AI as something that can’t help their business.

They assume they don’t have enough data to process or that the impact of AI won’t be noticeable at a smaller scale.

A lot of those same owners would be surprised to realize how much data they already have – data which is going untapped.

Putting that data to work might result in smaller gains, but proportionately those gains matter more.

One interesting thing about AI is that is has opposite benefits for SMBs and larger companies.

It helps giant companies operate with the personalization of an SMB while allowing SMBs to function with the efficiency of a massive corporation.

That is, it gives small to medium businesses the edge they need to “punch outside their weight class” when it comes to competing for market share.

While there are some AI applications that won’t help smaller-scale businesses, there are many more that will.

A small bookshop with five employees wouldn’t get value from predictive scheduling software, but they could see an impressive return on predictive ordering and email marketing programs.

AI doesn’t apply to this industry

There’s a perception that artificial intelligence is only for high-tech fields like software development or banking.

That couldn’t be farther from the truth. AI can be applied anywhere where data is generated – that is, everywhere – to improve efficiency, guide decision making, and maximize the impact of marketing and sales campaigns.

Some examples:

  • A cleaning company uses AI to intelligently manage their leads and upsell current clients.
  • A stroller rental company builds an AI-powered solution to manage their inventory and give customers more options for customizing deliveries.
  • A vacation rental agency uses price optimization to get the best possible pricing on rentals for owners.
  • A landscaping company decides where to expand based on data gathered from predictive analytics tools.

These are all small but important decisions, and they’re made easier using insights gathered by artificial intelligence.

AI is too hard to learn

SMBs tend to have long-time employees in leadership positions with lower turnover in mid-level roles.

They often hesitate to push something that seems high-tech or confusing due to established relationships with employees.

These fears are large unfounded. Building enterprise AI tools is complicated.

Using them is less so, especially with custom tools created specifically for non-technicians.

Most enterprise AI software is designed to be user-friendly at an operator level, so the on-boarding process would likely be much less complicated than SMBs might expect.

Where there are problems, there are well-established training solutions.

The most popular AI tools have online classes at a variety of price points, from free YouTube tutorials to subscription-based professional development platforms.

Developers generally offer training and support packages for their software at reasonable rates.

With so many options even the most technophobic staffer can find a way to get on board with new tools, especially once they realize how much easier AI makes their job.

Staying In The Game With AI

Larger companies are already investing in artificial intelligence.

As they do, they’re gaining a lot of advantages traditionally enjoyed by SMBs, like personalized service and shorter response times to changing local market conditions.

Small to medium businesses have a choice. They can make the AI investment that will help them stay competitive or risk losing their customer base to larger, better-informed companies.

At the end of the day, that isn’t much of a choice at all.

Artificial intelligence doesn’t have to be a headache. Concepta can help you build an intelligent business intelligence solution that fits your needs- and your budget. Schedule your complimentary appointment today!

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How Digital Transformation Is Impacting Small and Medium Businesses

digital transformation impacting SMBs
The digital revolution is disrupting the traditional business model for small and medium businesses (SMBs). On one hand it makes it possible for them to compete with much larger companies, but on the other the investment required can be daunting. Before setting out to create a digital strategy, it helps to work through what digital transformation actually means and how that affects SMBs.

Changing the Pace of Business

Digital transformation is just that- a total restructuring of operations to function more efficiently in the digital era. Its effects reach into every area of business. Here are a few of the core components involved in a successful transformation: Mobile presence: SMBs used to be fine with a regular website, but now consumers expect a fast, fluid mobile experience. This is doubly urgent for small businesses. 40% of all mobile searches are for local businesses, and 88% of people who search for a local business will visit either it or a competitor within 24 hours. 60% won’t visit or recommend a business after having trouble with a poorly designed mobile site. Optimizing for mobile is obviously important- yet 47% of SMBs still don’t have a mobile-friendly website or app. Enterprise apps: Enterprise apps rework everyday functions- ordering, reporting, marketing, planning- into streamlined processes that can be managed via user-friendly apps. They cut down on internal confusion since everyone has the most up-to-date information in the palms of their hands. Implementing enterprise apps at the operational level eliminate redundant operations, increase efficiency, and improves employee morale. A study by Adobe found that investing in enterprise apps netted companies a 35% ROI on average. Chatbots: Chatbots are the answer to a major customer dilemma: how can a company provide twenty-four hour customer service at scale without the expense of hiring and training humans agents? Natural language processing technology has advanced enough that chatbots can handle the majority of routine customer queries. Technology experts predict that customers will conduct 85% of their brand interactions without speaking to a human at all! Automation: Digital revolution creates a lot of work, but fortunately much of it can be automated. Automation involves creating a list of processes that trigger other actions or processes without needing to check with a human first. One example would be generating order confirmation emails after a customer completes a purchase online. Automation can also walk a customer through basic troubleshooting after an error is reported. It’s often confused with artificial intelligence, though automation uses set rules to complete its tasks instead of analytical reasoning. AI-powered customer management: There’s a marketing adage that 80% of business comes from 20% of customers. With artificial intelligence, that’s changing forever. Intelligent profiles formed by automatic customer classification and segmentation help companies identify their best customers. These profiles also help provide the kind of personalized experience that keeps customers happy and loyal. Data science and analytics: In many ways, data science is the cornerstone of digital revolution. Data has been called the new oil, and for good reason. Increasing data utilization is one of the fastest ways to grow a company, resulting in lower operating expenses and higher revenue. For more about data science and its impact on the business world, read our white paper: “How Businesses Can Use Data Science and AI to Gain a Competitive Edge.”

The Looming Threat to SMBs

When unchallenged, large companies who refine their digital strategy can satisfy needs once available only through a SMB. The traditional advantages of small businesses over corporations are personalized service and an inventory of niche products tailored to their local market. Techniques like intelligent customer profiling give companies that would ordinarily be too large to customize their offerings the insight to do so. If SMBs aren’t pushing digital transformation themselves, these large companies could steal their client base and push them out of a local market. The problem is the investment in time and resources required for traditional digital solutions. Getting maximum efficiency from daily operations like reporting, inventory, or accounting is easy to do with modern software. However, the type of programs used by corporations aren’t practical for SMBs. They’re complicated to operate, needing trained staff to maintain their databases, and the typical SMB will only use a fraction of their capabilities. To complicate the issue, large-scale software is expensive enough that recouping an investment would take too long to merit the expense. SMB managers often make do by stretching the capabilities of programs like Excel, but that can cause more problems than it solves. Analytics software inspires a similar dilemma since the rewards of data science and analytics for SMBs are hard to see. Unsure how to translate their data into actionable results, owners hesitate to invest the time and money to join the digital revolution. They worry that the potential damages from project failure are much higher for smaller businesses that can’t absorb losses like huge companies.

The Path to Digital Adoption

Fortunately, software developers are beginning to cater to the digital transformation needs of SMBs. Solutions aimed at SMBs are more widely available. Owners no longer have to buy management software meant for global corporations in order to digitize their operational needs. Instead they can choose software with only the features they will use. For example, a landscaping company can have a unified dispatch and reporting app built that lets managers assign jobs and receive completion reports. The app costs less than a solution meant for larger companies and meets the company’s requirements more closely. Analytics is easier now, too. Rather than hiring an in-house data science team, SMBs can take advantage of off the shelf enterprise analytics software. This is a popular option among SMB owners. Last year SMBs used an average of 4.8 apps to manage their operations, up from 3.8 in 2015. 46% are tracking their social media metrics through analytics programs, and 47% use some level of business intelligence software. SMBs do run into trouble with premade software that doesn’t quite meet their needs. Some solve the problem by stringing together a collection of apps that each solve a different problem. The resulting technological complexity can give the impression that data science is too complicated for SMBs, but there are good alternatives to the “patchwork app” system. Custom programming on an SMB level is surprisingly affordable. Instead of using a handful of apps to manage outcall scheduling and reporting, for example, a customized business app could combine those functions in one easy to navigate place. Cloud technologies are making many of the same analytics favored by large companies available to SMBs, too. By tracking and predicting customer needs, SMBs can implement smart inventory systems that make the most of limited shelf space. Targeted marketing is another convenient tool for reducing operating costs. It lowers the price of customer acquisition while raising the value of individual clients through repeat business. Speaking of lowering costs, data science can reduce overhead in general. Artificial intelligence and automation takes tedious or repetitive tasks out of human hands, leaving employees free for more skilled projects. The boost in efficiency makes up for SMB’s comparatively smaller staffs.

Leveling the Playing Field

In a very real sense, SMBs are better positioned to benefit from digital transformation than large companies. 41% of SMBs feel their size is an advantage when overcoming institutional resistance to adopting new technology. They have less bureaucracy surrounding the decision to change, and they have more to gain by going digital. When they do commit to digitization, their efforts have a high success rate. Three quarters of SMBs feel that gains from investing in data science technology met or exceeded their original expectations. Despite the challenges, digital strategy should be a priority for SMBs. It’s a game-changer. Half of industry leaders believe that technology levels the playing field between small businesses and large corporations. Digital transformation is the most reliable path to maximizing an SMB’s resources to gain an edge against their bigger competitors.

How has the digital revolution affected your business? For advice on fine-tuning your digital strategy or to explore how to begin, get your free consultation with a Concepta expert today. Request a Consultation

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How Small and Medium-Sized Businesses Can Stay Competitive in the Digital Era

small and medium-sized businesses
Digital transformation has to be a priority for small and medium-sized businesses. Economies of scale make it easy for large companies to outpace their smaller competitors, and the performance gap grows every year. Custom mobile application and tailored software supported by an insightful data science strategy can provide the edge needed to compete in the global marketplace.

Get Connected

Mobile e-commerce is growing fast. Over 71% of online time in the US happens on mobile, and 62% of smartphone owners have used it to make an online purchase in the last six months. Businesses who have an effective mobile presence grow 40% faster than others. That’s why 98% of marketing experts recommend investing in a mobile-friendly website or app– yet only half of small businesses have one. These businesses are effectively leaving money on the table. Accessibility widens your potential customer base; even local businesses get more traffic when people can find them on the go. Establishing a mobile presence should be an early step in digital transformation.

Make smart technology investments

Megacorps usually have dedicated data science departments with proprietary software to process their data. That level of commitment isn’t necessary to turn data into insights, though. Many of the same services can be provided by a good development firm. Those that specialize in custom programming and business intelligence can create an analytics solution tailored to your company’s needs. For example, most modern enterprise software comes equipped with embedded analytics to translate their results. Instead of “reinventing the wheel” with from-scratch analytical programs, the developer can pull information from enterprise programs you already use and display it on a configurable dashboard. Dashboards are easily read by non-IT professionals, which cuts out the middleman between analysis and use. This is a good time to consult with your developer about your company’s current software subscriptions. Some may be redundant, or there may be more efficient solutions that can be used across the organization instead of within a single department.

Let data guide your marketing

Big companies can absorb more loss when it comes to advertising; a weak campaign has more severe consequences for small business. That’s why it’s important to make every dollar count. Marketing is an area where data science makes a huge impact. Predictive analytics help determine the most effective markets for adspend, suggesting areas where the product is being well-received and those where the cost of customer acquisition is unreasonably high. If you want to know how you can turn your company into a data-science-driven enterprise, download our new white paper: How Businesses Can Use Data Science and AI to Gain a Competitive Advantage.Download FREE AI White Paper

Refine Customer Profiles

CMOs who employ AI-powered marketing report significant gains in customer retention, engagement, and lifetime loyalty. The benefit comes from a more personalized customer journey made possible by analyzing internal data (loyalty programs, site activity, CRM data) to build a portrait of the customers that is supportive of the mobile app or custom software system being used. This analysis is referred to as intelligent customer profiling, one of the latest applications of predictive analytics. It has widespread benefits. Knowing the customer leads to knowing what motivated them to choose a company and what might alienate them. Those with the highest ROI can also be targeted for special incentives and support.

Position Your Company For the Future

If you own a small or medium-sized business, now is the time to embrace data science. Digital transformation isn’t just helpful, it’s necessary. 47% of enterprise leaders believe the non-digital business model will be obsolete by 2020 and that companies who don’t embrace technology are going to be out-competed. Even large corporations who haven’t moved towards digitization have started dropping off the Fortune 500 list. Don’t get left in the digital dust. Put your data to work and you’ll put your company on track for a long, successful future.

Getting started with digital transformation? Let Concepta guide you through the first steps. Contact us for an in-depth assessment of your needs.

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