ADVANCEMENT in technology has made innovation more affordable and reachable to small businesses. Increasingly, various platforms and tech providers are enabling SMEs to leverage technologies such as artificial intelligence (AI), big data and cloud to improve their efficiency amidst a more competitive business landscape.
In the face of Industry Revolution 4.0 (IR4), industry observers have noted that SMEs should aim to adopt the latest technologies, of which one of the key elements is AI.
In a study by Microsoft and IDC Asia Pacific last year, it is estimated that AI will allow the rate of innovation to almost double and increase employee productivity improvements by 60% in Malaysia by 2021.
“AI is the defining technology of our time that significantly accelerates business transformation, enables innovation, boosts employee productivity and ensures further growth, ” Microsoft Malaysia managing director K. Raman had said.
However, SMEs have been rather slow in looking into this area.
“While the words IR (industrial revolution), robotics and AI are not new within the manufacturing sector, a digitalised, integrated and automated end-to-end business process is more of a rarity within the SME landscape.
“Frankly, AI is probably a topic which is further down the road for the SMEs. This is primarily due to the reason that before AI could be deployed, there are fundamental building blocks which must be put in place, ” says AGOS Asia chief executive officer Joon Teoh.
She explains that an organisation’s business transformation generally starts with them becoming digital-first companies. This means doing away with manual record-keeping and capturing information digitally.
From there, they move on to the integration and automation of various business processes.
This is followed by the implementation of robotics software or robotics process automation (RPA) to fill in the gaps where full integration and automation cannot be achieved. Such software can be utilised to replace manual and repetitive tasks like data entry for invoices and daily matching of bank receipts.
Teoh notes that the software can also be taught to recognise patterns and “make informed decisions” – known as intelligent RPA, or AI-enabled RPA.
“Within the SME landscape, from what we have seen, most organisations are still grappling with steps one and two – in digital adoption – and they currently have a rather fragmented system for business processes. Hence, these fundamental gaps should be given priority and urgency at this juncture, ” says Teoh.
Far too many SMEs, she opines, adopt the wait-and-see attitude. However, waiting has a cost too.
“Every minute of inefficient processes will cost the organisation money. The risk is that it may not be visible until it is too late. Often, SME owners look towards technology adoption and improvement of business processes only when they run into a problem like fraud cases, penalties or loss of business. These are really not the best of times to implement transformative changes in an organisation and they reduce the chances of success.
“We need to plan ahead and anticipate what may come. A mindset shift needs to happen if we want to propel our businesses and organisations to the world stage, ” she adds.
The concept of AI may come across as fanciful for most SMEs. But there are very practical applications that could benefit small firms looking to carry out operations more efficiently.
One area, says Teoh, is in intelligent data capture. For example, data entry can be automated from invoices and analysed for any cost savings opportunity. The other area is in forecasting future sales and margins based on past trends, which will in turn provide the basis for pricing and resource allocation.
“AI has also been deployed within credit control areas where credit risks of a customer can be analysed within seconds, tapping into various sources and previous collection patterns. This reduces the cost of uncollected debts for the organisation, ” Teoh shares.
SMEs can also leverage AI in carrying out market research efforts which have traditionally been costly.
“Market research has been too expensive, over RM100,000 to kickstart, and time-consuming of an activity for SMEs to undertake. This is primarily due to the labour-intensive process of collecting, processing and analysing data.
“With AI, we are able to reduce the amount of labour involvement, and still maintain the quality of the research with minimal human researchers. This allows us to bring down the cost and time needed to complete a research, making it feasible for SMEs to participate. Historically, research has been limited to large enterprises, ” notes Zhen Ng, chief operations officer of Vase.ai.
Vase.ai is an AI-powered market research platform that delivers insights about consumer behaviour within 24 hours, which gives companies the edge they need to make the right business decision.
“Just this month, we helped two small businesses start their journey of using consumer data to make better decisions, ” shares chief executive officer Julie Ng.
One of them is a new company looking to launch a new product targeting human resource professionals.
“We helped them to successfully validate what is the market acceptance of their product and test out a few different concepts to find what would work better. By using our solution, we helped them eliminate concepts that were less effective, which will lead to a better conversion rate when they launch.
“Our ultimate goal is to understand what problems our clients are facing and help them collect consumer data that can lead to action and not just any nice-to-know information, ” Julie shares.
Vase.ai is also currently working on a new software-as-a-service product which it believes will drive wider adoption of consumer research in the South-East Asian market. The path forward for the industry, says Julie, is automation and augmented intelligence. Pushing for acceptance
The acceptance level for automation and deep technology amongst SMEs is still low. Notably, sectors where margins are more compressed or disruptions are more evident and frequent have seen a higher adoption rate. They include industries such as F&B, retail and e-commerce.
Zhen notes that high-frequency purchase industries are rapidly adopting its solutions. As millions of consumers decide whether to purchase from one brand or the other, brands will need an edge to win market share.
He adds that organisations and business leaders are beginning to see the importance of understanding their consumers’ behaviour and preferences. This can largely be attributed to the increasing rate of change in consumer behaviours. Additionally, these organisations are largely digitally-savvy.
“SMEs, when faced with a decision to invest in marketing, will tend to put their capital into advertising instead of consumer research and data because it is harder to tell what is the ROI.
“However, consumer research and data is exactly what large enterprises are focusing on as they see it as leverage. SMEs need to understand that not only must they get eyeballs on their product, they also have to improve the content that they are pushing out to the world, and through which channels.
“The main concerns our SME clients have are usually with regards to research expertise. Not many SMEs have in-house researchers that understand how the entire process works. This is why we provide an expert with every project we undertake to help our clients get the most out of their research.
“We think after we’re able to bring the cost down to an affordable price range, and speed fast enough to accommodate SME decision-making timelines, the next big barrier will be the change in mindset. Purely understanding the importance of consumer behaviour is not enough, they have to act on it, ” he says.
Vase.ai has seen growing demand for its services since its inception five years ago. It expects growth to maintain for the foreseeable future as the government continues to push the IR4.0 agenda.
Teoh points out that businesses need to first identify their capabilities and where they stand on the technology tangent to ensure that they are able to seek out technological solutions that fit into and enable their business processes.
“The key lies in successful implementation and eventual generation of benefits to the business.
“There are three areas of support needed for a successful and effective implementation of solutions for companies. One of them is having the assistance from talents who have done this before and can apply it to your organisation. The other is having a clear implementation roadmap and clear communication, as well as engagement and upskilling of your team.
“Look out to see how others are doing, in particular large organisations and MNCs and explore how this can be adapted within your SME organisation, ” she says.
Did you find this article insightful?
100% readers found this article insightful