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AI revolution in SMB-Challenges and Way Forward

3AI November 29, 2023

Featured Article:

Author: Raj Sadasivam, Jana Analysis

As most of us would agree, we are on the cusp of the third major revolution in the history of mankind. The invention of letter press in the 15th century by Gutenberg was the first and the internet revolution in the 1990s being the second. Now the world is being taken over by the AI revolution. The letters press made creation of books/papers possible which resulted in massive dissemination of knowledge, growth of literacy and rapid economic development. The internet or the digital revolution completely disrupted the communication world making communication almost instantaneous which resulted in transformation of how businesses are conducted and great improvement of processes. Internet revolution in a way had set up the AI revolution.

So where are we in the AI revolution?

Current state of AI adoption

AI has entered all industries at enterprise level and we as consumers are touched by it. But the key question is, has it expanded to all levels of business in terms of size and nature? Some AI technologies such as Natural Language Processing and Machine Learning are more widespread than others like quantum computing and artificial general intelligence. Similarly, AI that requires specialized and niche hardware and software, is less democratized than those that are widely used and cost effective. AI technologies that are regulated by governments, prohibited by costs and the ones that are proprietary of large corporations are highly restricted.

Until AI is democratized and widely used by SMBs (as in the case of the other previous revolutions), we may not unlock the massive value of it. What would be the benefits and ROI of this adoption by SMB? What are the challenges? And ultimately how will this benefit humankind as a whole? Let’s explore….


Owners/ leaders of small medium businesses such as the local pizza shop, a doctor’s clinic or a medium sized manufacturing company would be aware of AI but what stops them from adopting AI could be due to one or more of the following reasons:

1.      Lack of knowledge: Even though SMB owners would have heard/read about AI, they may not have knowledge levels of AI’s capabilities, limitations in general and use cases for their businesses.

2.      ROI: They are not sure of what will be their ROI in terms of investments, revenue growth and cost savings etc. because of implementing AI.

3.      Technical challenges: May have an impression that AI would require high investments in infrastructure and software coding.

4.      Data availability: It may be partly true that most SMBs may not have robust data capturing systems that are essential for any AI to function.

5.      Privacy of information: Will implementing AI give away my secret of success or dilute my USP?

6.      Finally, as a general inertia, – why fix something which is going well.

Given these challenges, let’s see how AI can help SMBs…

·      Customer insights: With collection of customer data, AI can help businesses to understand their customer behaviors deeply from generating simple charts to more complex analysis. This can help personalization of products and services to clients, enhancing satisfaction.

·      Optimization of processes: Different processes within a small or medium business can be optimized using AI that will help reduce costs and improve efficiency.

·      Elimination of repeatable tasks: Boring repetitive tasks can be eliminated using AI tools like Intelligent Process Automation. They have distinctive advantages such as cost reduction, elimination of human errors, availability of resources for more valuable and creative tasks.

·      24×7 availability of customer service: Simple chatbots to AI enabled chatbots can interact with customers/potential customers even during off office hours so that customers are not missed. Modern chatbots engage with customers in multiple languages, understand sentiments, accept payments/execute transactions, operate in multiple communication channels such as what’s app, Facebook, websites etc.

·      Product/service improvements: Analyzing social media posts will provide insights into how customers use or feel about the product or service. This can help improve the product/service even before customers voice their concerns.

AI for SMBs is not impossible, maybe difficult.

Initiatives can be taken to overcome these challenges to implement AI and realize the benefits.

Ø Educate about AI: Stakeholders in AI such as AI business leaders, academicians, researchers can educate the use of AI to SMB owners in different real and virtual forums. Common use case denominators can be formulated for each industry and sensitized to the audience.

Ø Encourage to start small and scale: Rather than going big bang in taking risks like in enterprises, start small, realize the value and ROI before expanding.

Ø Allow network effects to take over: Shortlist a few key players in each industry and seed the AI. Projecting the value in these SMB’s, allow network effect to take over. One strategy could be to accelerate this effect by demonstrating greater value in each industry through data sharing among companies within the legal privacy framework.

Ø Build and incorporate simple data capturing systems: Use creative means to build data capturing systems in daily processes which requires low incremental costs and effort.

Ø Design data security systems with cost effectiveness: Build small scale data security systems that will eliminate huge costs and data breaches which will appeal to SMBs.

Ø Encourage development of no code AI tools: These tools would involve no or very less coding at the SMB end so that skepticism of coding requirement is eliminated.

Ø AI lite-does not learn new tasks: Use AI lite that may not be a great learner of new tasks but they can become very smart indeed about sorting and distributing information rapidly.

Ø Other than these points above, availability multitude of open-source AI tools and their usage should help expansion of AI systems among SMBs.

Realize these potential benefits of widespread AI…

Ø Innovation and progress: Disseminating AI to SMBs will make way for the development and adoption of new technologies and ideas which will help to stimulate innovation and drive progress.

Ø Education and skills development: Democratizing AI can help to improve access to educational resources, particularly for marginalized groups. This will result in lifelong learning and the development of new skills and knowledge.

Ø Inclusivity: Increasing the usage of AI tools can increase widespread participation in decision-making processes and give more people a voice in shaping the direction and use of AI. This can help develop AI technologies and use cases in alignment with the needs of society.

In summary expansion of usage of AI can benefit the global economy with more efficient businesses, better customer satisfaction, effective dissemination of knowledge, increasing knowledge and skills and overall growth.


Given these benefits of AI, there are few essential points that need to be taken care of such as ethical usage of AI through robust policies, green AI by building energy efficient systems, elimination of digital divide by ensuring the AI is fair and available to all, minimization of the effect of job displacement and by designing security systems and framework that would ensure privacy and security of data.

How do we take care of these non-core but essential factors? Well, that’s a topic for another discussion.

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