While studies show that most New Zealanders are increasing their investment in AI (or planning to), many will, unfortunately, end up putting it on the back burner because they have not done enough background work to harness its potential properly.
AI demands a certain level of organisation, and too many local businesses are still operating without a formal plan, often making decisions on the fly.
In my experience, a significant number of SMEs do not have a documented business plan or established and documented processes and procedures. This lack of organisation is evident in most sectors, including retail.
And there is research to back it. “The Essential Guide to Understanding AI for SMB and Mid-Market Leaders in Australia and New Zealand” indicates that AI investment is on the rise among SMBs. However, it also points out that many businesses are not ready to harness AI to its full potential.
From Convergence’s perspective, this sporadic approach to technology adoption can result in squandered resources and missed opportunities. Operating without a clear plan can prevent businesses from fully benefiting from AI and expose them to risks in today’s complex business landscape.
To successfully adopt AI, businesses must first understand their processes to identify use cases where AI can be most beneficial. Less than 20% of SMEs currently use clearly defined business process maps to inform their decision-making, which suggests a need for a more data-driven approach.
Here are my suggestions for SMEs looking to integrate AI effectively:
1. Document Processes: It’s essential to identify and document key business processes and relevant use cases for pinpointing areas where AI can add value.
2. Research Other Industries: Observing how other industries have successfully integrated AI can provide valuable insights. For example, retail businesses utilise AI for real-time customer engagement and stock management, while legal practices employ AI for case law research.
3. Become Data and Process Driven: Prioritising data collection and analysis is fundamental for informed decision-making and effective AI leverage.
The era of the traditional Kiwi entrepreneur succeeding solely through hard work is changing. Today’s consumers have different expectations; they seek interactions that are tech-savvy and data-driven.
SMEs can adapt by adopting best practices such as data-driven planning, process documentation, and strategic research.
The risk of not evolving is significant. Traditional businesses that fail to integrate AI effectively may find themselves outpaced by more agile competitors. It’s akin to the horse and cart being overtaken by an automobile on the road.
I urge New Zealand SMEs to adopt structured business practices and strategically integrate AI to navigate the challenges of the digital age successfully.