Business AI – are SMEs ready for it?

Business AI – are SMEs ready for it?

John PhillipsCompany Updates, Product Updates

Business AI (Artificial Intelligence) is a hot topic right now; however, only 10% of small business owners know how to use it for work-related tasks, and 67% admit to knowing little to nothing about AI in general.

That’s according to a study commissioned by Microsoft Corporation in May 2023, which also found 79% of small business owners are interested in learning more about how to apply AI to their business.

In fact, according to Google Trends, searches for ‘business AI’ have skyrocketed since December 2022.

Business AI search trend
What is AI?

Artificial Intelligence (AI) is basically the simulation of human intelligence, mainly by computers. AI is used for visual perception, speech recognition, decision-making, and language translation.

What are the different kinds of AI?

Rule-based AI

This type of AI follows a set of rules, like instructions in a recipe. It’s good at maths problems and making logical choices. It can also examine fast-moving information to find patterns and spot things that might not be right, such as unusual activities in a big group of data or even potential fraud!

Machine learning

Think of this as teaching a computer to know what things look or sound like. If you give it enough examples, it can learn to recognise pictures of cats or understand spoken words.

Deep learning

This is when a computer collects multiple layers of information, cross referencing to detect and predict patterns. This kind of AI is used in things like self-driving cars, where it helps the car understand what’s happening around it.

Natural Language Processing (NLP)

Some computers can understand and interpret how we talk. You’ll usually find this used in chatbots, virtual assistants, and language translation software. NLP is what you’re using when you interact with Microsoft Copilot (one of Microsoft’s main AI business tools) using plain English instructions.


This newer form of AI has seen some controversy because it can be used to create things like artwork, images and copy using things that are fed into it. Controversy has arisen when such AI software has used artists’ work without permission and mimicked their artistic style to create new images. In fact, it’s become so much of a problem that an app was created this year to offer artists a way to ‘cloak’ their work from AI text to image generators.
Microsoft Copilot creates new written, visual, and auditory content by way of existing data or input by humans. ChatGPT from OpenAI is a generative AI; in fact that’s what the “G” in its name stands for.

How is Microsoft using business AI?

In March this year, Microsoft announced the release of Dynamics 365 Copilot to provide AI-assisted tools built for sales, service, marketing, operations and supply chain roles.

Gavin Nixon, Director of Strategy 365, has been watching the development of business AI within the Microsoft ecosystem with interest. He said: “AI can use data to predict future results and flag issues before they happen. This feature is something that will be particularly useful for businesses; however, I would stress the importance of ensuring your business has the right data to begin with in terms of quality and volume.

“If your business is using something like Microsoft Dynamics 365 already, then you will be a step ahead when it comes to feeding all that data into an AI business tool like Microsoft Copilot. However, if your business is still heavily reliant upon multiple spreadsheets and disjointed processes, then it is now more important than ever to switch to a cloud-based business applications platform and ensure the quality is there.”

Is there much demand for business AI?

According to Microsoft’s study, almost half of small business owners believe AI could be a valuable asset. The enthusiasm was shared by 71% of Gen Z business owners.

In terms of how AI could be used to improve businesses, the survey found the following:

  • 56% of small business owners believe AI could be used to create more efficient business operations.
  • 49% believed AI-based solutions could help monitor customer data and trends.
  • 46% would want business AI tools to help automate repetitive tasks like order tracking and customer service.
  • Interestingly, around half of Gen Z owners are hoping AI will assist with effective ad campaigns.

What are some of the main barriers for SMEs?

In a survey of 1,000 small business owners with 0-24 employees, it was revealed that almost half said they felt so overwhelmed managing the day-to-day aspects of their business that they had little time or energy to spare on ensuring the business reached its full potential.

The finding of the survey showed that this was because many owners (66%) were focusing on communicating with customers, followed by managing budgets and accounting (50%), while 48% were dealing with administrative tasks like data entry and scheduling.

Over half of all business owners surveyed said they would spend more time innovating new ideas to boost their business, such as using business AI tools, if they could find that extra time.

Gavin said: “It’s the age-old problem many small business owners face – too much time spent working in the business than on it. By the time they have dealt with customers, managed projects, completed all their admin, there’s just no time left over to work on the big picture.”

Gavin’s thoughts were echoed by Brenna Robinson, general manager of Microsoft 365 small and medium business, who said: “Today, [small business owners] need simple solutions that can help them achieve their business goals without complex tools or additional technical resources.

“We recognise the mental and physical load entrepreneurs carry and are dedicated to empowering them to do more of the work they want to do for their business and communities.”

The biggest barriers to business AI education were financing, followed by a general lack of firm understanding of AI, making it harder to know where to start or the best ways to use it.

Learn more about Microsoft Copilot

Microsoft 365 Copilot is designed to save small businesses time by using AI to automate routine tasks, streamline workflows and provide valuable insights.
You can learn about Copilot and AI fundamentals at the Microsoft AI help and learning site, or alternatively give the Strategy 365 team a call on 01782 916920 and we can explain in plain English how you can use business AI tools to help with growth plans.

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