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SMB and Midmarket adoption of Artificial Intelligence – key market facts

AI will arrive as a capability integrated within other solutions

When artificial intelligence (AI) comes up in a discussion that focuses on SMBs, the first question is likely to be “how many organizations are using it – and how?”. Results from Techaisle survey on US SMB and Midmarket Analytics and Artificial Intelligence adoption research indicate that AI penetration within the midmarket, driven primarily by firms with more than 250 employees, is reasonably robust. Both small and midmarket businesses are forecasting a substantial rise in use in 2021. In both cases, “use of AI” actually means “use of systems/tools/other products that embed AI.” This is an important distinction. As an earlier-stage technology that is typically embedded when it reaches the SMB market, AI is within the top 15 IT priority list for SMBs. AI is far more likely to arrive in SMBs as capabilities within other products than as a stand-alone offering.

The survey research data indicates that SMB adoption of AI capabilities is still at an early point. Small businesses have little to lose by treating 2021 as an evaluation year, understanding how AI is being used to create real advantage within peer organizations. The situation is different for midmarket organizations, where early adopters are already gaining experience (and potentially, benefits) from AI-based systems. Midmarket firms will not alter their 2021 plans, and AI capabilities will be on IT’s radar and maybe, on evaluation lists for new tools/solutions.

SMBs are not ready to adopt AI as a core platform capability. If one reads “planning to use” as meaning “we consider AI to be a selling feature or factor in the evaluation of new solutions,” however, the SMB market for AI starts to become interesting.

Techaisle asked a follow-on question about AI deployment to respondents who reported that their organizations were currently using or planning to use: is AI currently deployed/in production within their organizations, are they presently implementing AI solutions, are they in a trial/pilot phases, or have they not yet started implementation?

With the caution that the stats below represent only the organizations committed to an AI path, AI – especially in midmarket organizations (and particularly within those with 500-999 employees) – is becoming reasonably well established. Within small businesses, 11% of the organizations using or planning to use AI report that they have AI in production. Midmarket figures are more robust: 24% of firms using/planning to use AI report having at least one AI-inclusive solution in production.

SMB and IT supplier call-to-action

Real production use of AI is still rare, especially for small businesses. SMBs should stay on the lookout for potential breakthrough AI-based solutions but shouldn’t feel pressured to adopt systems that don’t offer compelling value propositions and ROIs. Given the early stage of AI, these findings are indicators of interest, rather than definitive statements on market readiness. Every firm is a prospect for systems with embedded AI; the current state data mostly shows how advanced they are in their consideration of these capabilities.

Areas where AI is/will be integral to business success

To understand where AI is most likely to impact SMB businesses, Techaisle inserted two questions into the survey instrument: one asking respondents to identify areas where AI will be integral to business success. A second asks which internal functions were most likely to benefit from AI-based systems.

Research data shows that small business and midmarket organizations have very different visions of business processes most likely to benefit from AI adoption. By a healthy margin, small business respondents are most focused on AI to impact the customer experience positively. Business intelligence and analytics, HR/recruiting are cited as potentially benefitting from AI. Several other functions – process automation, finance and operations, web/social media analytics, and marketing/advertising – are also viewed as opportunity areas.

Midmarket firms are keen to apply data to risk reduction: these respondents view fraud analytics as the most likely area to benefit from AI. Midmarket decision-makers believe that web/social media analytics, customer experience, and process automation are good targets for AI. They also see “automation of repetitive tasks” and IT automation and management as high-potential areas for AI-based solutions.

There are no doubt other variants of “AI” that will emerge as the technology and its use cases mature. AI-deployment is a potentially-fertile opportunity for SMB users and suppliers alike, but flexibility will be a critical success component.

Geo research:

Techaisle survey on Europe SMB and Midmarket Analytics and Artificial Intelligence adoption research
Techaisle survey on Asia/Pacific SMB and Midmarket Analytics and Artificial Intelligence adoption research
Techaisle survey on Latin America SMB and Midmarket Analytics and Artificial Intelligence adoption research

If you missed our 2021 Top 10 SMB and Midmarket Predictions, here is the link

Top 10 SMB and Midmarket Predictions for 2021

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Top 10 SMB and Midmarket Predictions for 2021
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