As SME businesses improve their efficiency by using machine learning, what will it take to have a competitive difference for growth?
Like many SME owners, you’re probably dazzled (or bamboozled) by the potential offered by Artificial Intelligence (AI) for business optimisation. From automating routine repetitive admin tasks, to improving forecasting accuracy, increasing productivity, and smoothing out many previously human-caused bumps - often at less cost than employing a human - it seems to be generating a brave new world.
A few years ago only large corporations could afford to access AI technology. With the development of machine learning for mass market use, SMEs can now avail themselves of these solutions not only for reasonable cost, but also without having to be a data scientist.
The newer, more user-friendly forms of AI can analyse large amounts of data and provide accurate and useable insights that can help you make better and more informed decisions.
The most famous (or notorious) AI tool, ChatGPT, has had more than its fair share of press, and has caused alarm in some industries. Stories – admittedly extreme - are emerging of business owners who have got rid of most or all of their staff and replaced them with AI tools.
The current dispute between the Hollywood studios and the actors’ and writers’ unions is the most high profile example. The writers are concerned that their roles will be usurped by AI-generated scripts, and the actors are alarmed that their contracts will include detailed AI digital scanning that allows studios to create deepfakes of them, that can be used in a variety of unpaid contexts.
Back in the just-as-glamorous world of SME business, AI can deliver cost savings and enhance operations in many areas. In the marketing space, it can accelerate speed to market, improve the customer experience at a superficial level, create more professional looking websites, and deliver highly targeted and personalised ads. In many respects it’s a marketer’s dream come true.
But like your Hollywood counterparts, you may find that once everyone can access these tools, there becomes less to distinguish one business from another. In a sea of AI-driven excellence, how will your business stand out?
Machine learning can do the math and the forecasts, but it takes a human to understand how that business works
One way to gain an edge is to remind ourselves of the key areas where AI can’t match humans – building relationships, thinking strategically and having imagination or original thought. The ability to create connections and communicate effectively on a personal level (emotional intelligence or EQ) could well become a niche advantage.
The vast majority of businesses are relationship-based. They’re formed by unique and distinctive personalities, who have built the experience for a range of customers who are similarly individual in their needs and wants.
Despite AI’s many advantages, it can’t understand the nature of your customers’ business, and what it takes to create customer loyalty. What it can do is relieve staff of routine tasks, so their attention can be better utilised on the customer experience. With fewer plates to spin, the business can become known for giving its customers time and focus.
There will always be conflict to sort out, and relationships to build. Employees can be freed up to engage in higher relationship-building tasks, or researching and brainstorming ways to develop the business. There’s also a greater sense of satisfaction to be had from doing tasks that demonstrably add value.
The same is true of lenders. When you’re looking for Working Capital funding, you may find that some lenders rely considerably on an AI model to evaluate your business’ data and bank statements, with varying results.
Other lenders believe there’s only so much that can be discerned from that. The expert bankers at lenders like Banjo spend their working life assessing and understanding businesses, looking beyond just their customers’ financials, to determine the goal of their business and how the money will be used.
For example, an SME owner wins a contract that will give them a guaranteed income for the next 2 years. To fulfil the contract they need working capital to purchase stock and hire more resources upfront. Machine learning can do the math and the forecasts, but it takes a human to understand how that business works, and grasp the nuances of when and how the funding will affect the outcome.
Humans are hard-wired to seek out connections with others. Having business relationships based on understanding and authenticity is of more value, and more meaningful from the customer’s perspective, than an algorithm. In any contest between Artificial Intelligence and Emotional Intelligence (EQ), even if AI eventually learns to fake empathy and consideration, EQ will remain the key to authentic human connection in business and beyond.