The Impact of AI and Automation on Business Operations

As the world stands at the threshold of mainstream artificial intelligence (AI) technology adoption, many businesses are grappling with the basics of integrating these advanced tools into their operations. 

The promise of AI and automation is clear: streamlined processes, reduced human error, and enhanced productivity. This can enhance everything from customer service using generative AI solutions to inventory management through automated monitoring tools. However, the path to achieving these outcomes is less understood.

This blog will cover the significance of AI and automation technology solutions for SMB business operations, how they can be integrated into your own processes, and why managed services may be your best option to ensure a seamless integration of both technologies.

What is AI and automation?

In the context of business operations, artificial intelligence refers to the capability of a machine solution to imitate intelligent human behavior and processes. Think of AI as tools that perform tasks that typically require human intelligence, such as understanding natural language, recognizing patterns, and learning from experience. For SMBs, AI can manifest in various forms, such as chatbots that handle customer inquiries, algorithms that predict sales trends, or specialized software that assists your staff in making data-driven decisions.

Automation, on the other hand, involves using technology solutions to automate repetitive and routine tasks that were previously performed by humans. This includes everything from scheduling appointments and processing invoices to more complex operations like watching over data for trends, assembling products or managing supply chains. The goal of automation is to increase efficiency, reduce costs, and free up employees to focus on more strategic work.

In practice, AI and automation often intersect and enhance each other’s capabilities within a business setting. For example, AI can be integrated into automation systems to improve their decision-making processes. An automated inventory management system, enhanced with an data & AI-powered analytics suite, can not only track stock levels, but also predict future inventory needs and automatically place orders, minimizing the risk of overstocking or stockouts. This synergy allows your SMB to operate more efficiently and respond more dynamically to market changes, thereby maximizing operational effectiveness and scalability.

What is the difference between AI and generative AI?

Generative AI is a subset of artificial intelligence specifically focused on creating new content, from textual articles to images and other mediums. For SMBs, this is one of the most accessible forms of AI solutions, opening opportunities to innovate and personalize customer interactions.

When integrated with automation systems, generative AI can, for example, automate the creation of personalized marketing materials that adapt to the needs and responses of individual customers, enhancing engagement and customer loyalty. Additionally, generative AI can automate responses to queries in real-time, providing a seamless customer experience. 

This fusion can not only bolster efficiency and responsiveness of automation, but also adds a layer of intelligence and adaptability, making your operations more attuned to market demands. 

According to Gartner Research, generative AI-led business strategies are expected to be used by up to 30% of enterprises by 2025, up from 5% in 2021. To keep competitive, it’s up to your SMB to get ahead, and start getting educated on generative AI’s purpose and use cases.

AI offers many benefits for Small to Medium Businesses

What are the benefits of AI and automation for SMBs?

Artificial intelligence and automation solutions bring a lot to the table for small businesses. Here are some of the biggest benefits.

1. Customer service enhancement:

AI-driven chatbots and virtual assistants have transformed customer service for SMBs by providing 24/7 support, enhancing both productivity and satisfaction, and helping save businesses up to 3 billion working hours for customer support agents a year by automatically attending to routine queries, according to a study by Tidio. A real-world use case example of using AI in customer support can be found with grooming product brand BOVEM (via ReadSpeaker), who used generative AI (ChatGPT) prompts to complement its existing customer service response template to deliver better quality assistance; the business cited a 20% increase in satisfaction rates, and a 30% reduction in response times.

2. Operational efficiency:

Automation of repetitive tasks like data entry, scheduling, and inventory management can significantly boost operational efficiency in your modern workplace. A good example of AI enhancing operational efficiency for SMBs is seen in the manufacturing sector, where AI-driven systems are used to optimize factory automation and minimize manual oversight for more streamlined processes and productivity.

3. Marketing and sales automation:

Through AI tools, you can enable personalized targeting and predict customer behavior for more effective marketing campaigns. For example, advanced algorithms within generative AI tools help your business understand the preferences and behaviors of their target audience, allowing for the precise tailoring (and automated templating) of marketing messages. This not only increases customer satisfaction, but also fosters customer loyalty in the long run, driving higher conversion rates and improved return on investment (ROI)​.

4. Human resource management:

Many companies are using AI-powered tools to automate the resume screening process, which speeds up hiring and improves the quality of candidate selection. These tools employ natural language processing (NLP) to parse and understand resumes, and efficiently match candidates with job requirements. This automation not only saves time but also helps in maintaining a high standard of recruitment by minimizing human errors and bias​. A Deloitte study (via Testlify) cites a 40% reduction in time-to-fill positions when organizations leverage AI in recruitment, highlighting some efficiency gains AI brings to HR.

5. Cost management:

AI is revolutionizing cost management for SMBs by automating and enhancing financial processes such as cost management. For example, manufacturing companies who have implemented AI-driven predictive maintenance have reduced downtime by 20% to 40%, and experienced a decrease in total cost of ownership by around 10%​, according to a case study by BCG Global​. Additionally, a study by Jones Lang LaSalle (via Sage IT) found using AI-powered tools for failure prediction instead of traditional methods could extend the life of equipment by up to 30%, meaning lower capital expenditure in the long-term.

In each of these areas, it’s clear AI and automation are not just tools for large corporations but are equally accessible and beneficial for SMBs, allowing your small business to compete more effectively and adapt to rapidly changing market conditions with the same cutting-edge tools.

How do I get started on adopting AI and automation solutions?

SMBs have several strategic paths toward adopting AI and automation solutions for business operations, with each option able to be tailored to your specific needs, resources, and goals.

1. Incremental implementation:

Your SMB can start with a gradual approach to adoption, starting with automating smaller, less complex processes. This might involve implementing basic automation tools for tasks such as email marketing, customer relationship management (CRM), or payroll processing, using mainstream generative AI tools such as ChatGPT. Over time, as you may or may not realize the benefits and gains in efficiency, you can gradually adjust or introduce more sophisticated AI-driven solutions into more critical aspects of their business, such as predictive analytics for sales forecasting or AI-driven logistics management.

2. Partner with a managed service provider (MSP):

If your SMB does not have the internal resources, expertise or IT department to spearhead your search for AI and automation solutions, or don’t find value in your independent implementation, consider an accredited IT partner who specializes in AI and automation technology adoption. These partnerships provide access to advanced platforms without the need for substantial upfront investment in research and development. For instance, a MSP who is a Microsoft partner can help you gain access to pre-built cloud-based AI services from the Microsoft Azure ecosystem, which also offers pay-as-you-go models that allow you to scale your AI tools adoption in line with your growth. Having proactive support from experts also generally makes it easier to implement such complex solutions into your operations, which is very important for a smaller business.

3. Education and training:

Investing in education and training is crucial to harness the full potential of AI and automation. This could involve training your existing staff on how to manage and integrate new technologies into their workflows, or hiring new talent altogether with specific expertise in AI and automation. Additionally, MSPs such as SparkNav offer cyber awareness training as part of their solution and support packages, using workshops and webinars to help your internal team up-skill and better understand how to utilize AI and automation effectively.

The impact of AI and automation on business: Next steps

It’s clear that the impact of AI and automation for your SMB can be profound, but only if it is implemented carefully and correctly.

If your SMB currently lacks the internal expertise or a dedicated IT department to help drive your AI and automation solution searching, we recommend getting in touch with SparkNav. 

We are a MSP specializing in the implementation and support of data, general AI and generative AI solutions, and can help your team up-skill and understand the best way to integrate these tools based on your current business requirements.

Robert Griffin
Robert Griffin
As COO, Robert Griffin plays an instrumental role in aligning operational excellence with strategic goals by leveraging his decades of experience in enterprise leadership. With deep knowledge and expertise in security, governance, risk, and compliance (GRC), and AI, his insights are often shared through thought leadership channels, including LinkedIn and blogs. → Follow Robert on LinkedIn.