Artificial Intelligence: What's In It For Small And Midsize Businesses?

Frank Niemann

Few topics are being discussed as intensely as artificial intelligence (AI). Whether they know it or not, companies are increasingly using the technology. It’s in our smartphones and governs our Internet services.

But what exactly is AI? And more importantly, how can small and midsize businesses (SMBs) benefit from it? To answer these questions and more, check out this quick FAQ.

1. What is artificial intelligence?

In our definition, AI is a combination of algorithms, data, neural networks, and machine learning. Its purpose is to mimic human capabilities or augment them.

2. What is AI used for today?

It is used for practically anything that relates to digitized information, be it data from IT systems, videos and images, voice or text.

To give you a few examples: AI is used for pattern matching and facial recognition, visualization of information or translation of spoken language or pieces of text into another language. Chatbots or virtual assistants are also part of AI.

Another important area of application is advanced analytics. For example, AI can be used to predict when a machine will need maintenance or how much supply will be needed.

3. Is AI useful for SMBs too?

You may have heard that large corporations are doing a lot of things with AI, which is certainly true. Which does not mean, however, that this technology is only suitable for them; in fact, we believe that a number of use cases are just as relevant for SMBs.

Of course, for SMB companies it might not make sense to just copy what the corporations are doing, but AI might come in handy when it comes to the automation of various tasks—e.g., in finance, sales or e-commerce.

The foundation of AI is data, of which SMBs have a lot. Besides, more and more software products such as business applications are now being equipped with AI features. So when you are selecting a new software, look for a solution that either has AI embedded or at least will allow the interaction with such a technology.

4. What AI uses cases can SMBs benefit from?

In fact, AI can help engineer a lot of new services, but in our view, the automation of processes represents the low-hanging fruits. SMBs manage a large number of processes that still require manual work, such as:

  • Matching invoices with payments in finance management
  • Answering service requests online: a chatbot can help with the simple questions. Only for more complex problems, a human service agent gets involved
  • Companies with e-commerce sites can benefit from automated recommendations for online buyers

5. Are such functions already available or are they future topics?

AI is increasingly embedded into new technology products, be they machines, devices or software, so AI is already in use. In terms of software, a large number of vendors of cloud-based solutions have started to incorporate AI.

6. Is AI just plug and play?

You need to have at least a basic understanding of algorithms. And you may need expert advice to identify how exactly the AI features of a software can be beneficial to your business. If we look at machine learning, we must not forget that for a machine to be able to learn, it needs to be fed with data. And this data must be relevant and in good quality. To ensure this, you will need external support and also some level of in-house knowledge, not just the AI technology per se.

7. What should SMBs consider before implementing AI?

Companies should identify the relevance of AI for their business and evaluate if and how AI makes sense for them. For instance, companies that do not have a large number of invoices to handle should not waste efforts on trying to automate this process. Or if they want to apply AI to automate their sales processes, they need to be sure that their customers will play along. If AI is used to support decision-making processes, the company should make sure it knows exactly how this is done and decide if it is willing to trust the technology. 

8. Is AI a job killer?

AI has already changed certain ways of how we interact—e.g., with our smartphones—and it will certainly change how we work. I personally tend to see the positive side of it. AI will augment human capabilities, so, in a way, AI and humans will be working side by side. Which means that job profiles will change and new qualifications will be needed.

The last word on AI for the growing business

We expect that SMBs will be able to benefit from AI as is embedded into applications. In addition, companies can use AI platforms that are becoming available to augment existing solutions. Both will help firms leverage their data and drive efficiency through automation as they grow their business.

For more on the role of emerging technology in SMBs, see “Why Midsize Businesses Are Ready For Big Changes In Analytics.”

Listen as SAP Insights Matter host Ramon Ray and I talk about the relevancy of Artificial Intelligence (AI) for Small- and Medium-sized companies.


Frank Niemann

About Frank Niemann

In his role of Vice President – Enterprise Applications & Related Services, Frank Niemann leads the global Enterprise Applications & Related Services Team and he acts as lead analyst for SAP-related research. With his more than 25 years of profound market experience, Frank Niemann is a renowned expert and a frequent speaker at events.