SMEs can utilize AI to automate processes, increase customer engagement and gain valuable insights. AI-powered tools can help SMEs stay competitive in today’s fast-changing business landscape. Drive Business Growth and Stay Competitive.
This paper investigates the payoffs of SMEs using AI in marketing systems, virtual communication, pricing and cash flow predictions, and HR. Statistical analysis based on dynamic capabilities theory.
AI-Powered Applications
SMEs use AI applications for a variety of purposes, such as advertising online, cash flow forecasting, customer support, and HR services. In addition, they are deploying chatbots to automate simple customer questions. These AI-powered tools improve labor productivity and enable SMEs to stay competitive.
Using AI to analyze data, businesses can better tailor marketing campaigns and provide personalised recommendations to customers, resulting in higher conversion rates. AI also enables companies to automate repetitive tasks and reduce maintenance costs, allowing businesses to focus on core activities.
The study’s panel design enables it to capture fluctuations in business risks and test for unobserved heterogeneity. Furthermore, the inclusion of information on innovativeness makes it possible to control for potential reverse causality between financial performance and AI adoption. The application of dynamic capabilities theory enables the study to investigate whether AI adoption has a direct effect on SMEs’ sensing, seizing and transforming capabilities. The models also take into account observable characteristics, such as years of operations and turnover.
Chatbots
SMEs are seeking ways to leverage advanced digital technologies to achieve operational excellence and improve customer engagement. AI chatbots are one such technology.
They can be programmed to respond to enquiries about products or services, handle simple support requests and identify potential business leads by listening for specific keywords. This allows SMEs to reduce customer wait times and offer instant answers.
Furthermore, AI can help SMEs to manage their cashflow more effectively by streamlining supplier payments. In a time when many SMEs struggle to maintain healthy cashflow due to old-fashioned payment systems and reliance on single funding sources, this can be a significant benefit. A study found that SMEs using AI-powered applications to process invoices are more likely to have an accurate and reliable cashflow forecast, which can lead to increased financial stability. This can help SMEs better manage their suppliers and improve their ability to take on new customers.
Blockchain
Traditionally, we associate ‘future’ technologies like AI and blockchain with large, globe-straddling corporations. But thanks to a growing number of vendors and entrants into these swiftly developing fields, SMEs can now access them, too.
Blockchain, for example, is a distributed ledger technology that allows businesses to share and synchronise data with multiple parties without the need for third-party intermediaries. This provides a host of benefits, including transparency, traceability, and speed.
For SMEs, blockchain offers the potential to boost business growth by improving operational efficiency, building trust with customers, and reducing the need for costly manual processes. As a result, 39 percent of UK SMEs are using or planning to use this advanced technology in the future.
Machine Learning
Artificial intelligence is a powerful tool for UK SMEs. By incorporating this technology into their business, SMEs can improve their marketing, customer service, and operational efficiency. These benefits can help them stay competitive and thrive in the business landscape.
For example, using AI to automate tasks allows employees to focus on more important work, which can lead to labor productivity improvements. This increased efficiency can help SMEs reduce operating costs and increase profit margins.
Moreover, AI-powered chatbots can provide fast and accurate responses to customers’ inquiries, thereby improving customer satisfaction and freeing up time for service representatives to handle more complex issues. This can help SMEs attract and retain more customers, which can enhance market growth.
Additionally, leveraging AI to analyze large amounts of data can help SMEs overcome supply chain challenges and optimize their operations. This can ultimately enhance their operational risk management capability and support a more informed business strategy (Hercheui & Ranjith, 2020). However, this study’s limited sample size limits the ability to evaluate associations between AI adoption and SMEs’ performance across industries needs read more hear.
