scorecardresearch
Here's how Indian SMEs can integrate AI tech better into their businesses

Here's how Indian SMEs can integrate AI tech better into their businesses

AI can help SMEs compete against bigger corporates and international SMEs by improving products, services and customer engagement. Here's a lowdown on how to facilitate such an integration.

Artificial Intelligence (AI) holds tremendous potential as a catalyst for Indian small and medium enterprises (SMEs). Artificial Intelligence (AI) holds tremendous potential as a catalyst for Indian small and medium enterprises (SMEs).

Technology is a great enabler and driver of competitive advantage for businesses. Of the many new technologies that have emerged in the last few decades, Artificial Intelligence (AI) holds tremendous potential as a catalyst for Indian small and medium enterprises (SMEs) to elevate their competitiveness and contribute to the great Indian growth story. AI can help SMEs compete against bigger corporates and international SMEs by improving products, services and customer engagement.  In particular, AI combined with data can be transformational to a SME’s sophistication. Many organisations in India have already embarked on their AI journey. According to the PwC report AI: An Opportunity Amidst a Crisis, 45 per cent of companies in India have increased use of AI due to the Covid pandemic. Let’s examine the main drivers and barriers to AI adoption by SMEs, and also discuss some “quick win” applications of AI. 

There are primarily three factors that contribute to an SME’s adoption of AI. Relative Advantage is the most important determinant: do AI-enabled tools help an SME gain a competitive edge over its competitors? Mimetic Pressure in the next driver: most companies adopt AI to copy their competitors. Perceived Usefulness of AI technology is another contributor: does AI improve productivity, profitability and/or customer service?

There are also three main factors that limit the adoption of AI by SMEs: Management Support, Complexity and Compatibility. Management support is critical in providing financial and non-financial resources for AI adoption. Complexity involved in adopting AI technology and the lack of skilled resources is another major inhibitor. Finally, lack of compatibility of the SME’s customers’ IT systems often prohibits SMEs from offering AI-enabled products and services, especially in the B2B sector. 

Low hanging fruit adoptions that SMEs should consider

Customer servicing, customer relationship management (CRM) and sales & marketing are some areas where SMEs can take their first steps towards AI-enabled tools. As a start, off-the-shelf chatbots are easy to adopt to provide customer service and respond to many types of sales queries. Next, AI tools that analyze customer interactions and behavior patterns, can help SMEs conduct more personalized sales and marketing activities. These data analytics tools can be used for sales data and competitive analysis to enhance product offerings and pricing strategies. AI can also enable SMEs to conduct predictive analysis of likely future scenarios, which can be a competitive advantage. AI offerings from many well-known technology firms such as Amazon Web Services, Google (AI Unified Platform), IBM (Watson ML) and Microsoft (Azure AI Platform) can help SMEs across most industries to quickly adopt AI technologies. 

There are many complex applications of AI. Combining data, AI and Internet of Things (IOT) enables SMEs to solve diverse problems related to supply chain, logistics and risk management. Larger SMEs can use AI-powered tools for use cases such as automation of back office document processing, know your customer requirements, reducing fraudulent transactions and human resource management. SMEs who begin or accelerate their AI-adoption journey will gain competitive advantage and generate commercial benefits. Those that are slower may lag behind. 

 

Views are personal. Shrestha is Director of Innovation and Tech Partnerships at Rise India by Barclays; Dr. Jadhav is Security Solutions Manager, Barclays Global Services Centre.