By Dr Faiz Masnan

In today's rapid digital world, small and medium-sized enterprises (SMEs) are constantly challenged to remain competitive.

Artificial intelligence (AI) is a powerful innovation that can help SMEs achieve competitiveness. AI, or the imitation of human intelligence in computers, has the potential to alter the way SMEs function, making them more efficient, inventive and customer-focused.

One of the most significant benefits for SMEs is increased efficiency and productivity. By automating repetitive and time-consuming operations such as data entry, inventory management and customer care, AI frees up entrepreneurs' time for more strategic activities.

For example, auto-reply systems can handle consumer interactions around the clock, seven days a week, providing rapid and consistent responses while freeing up human resources to solve more complex situations.

Improved decision-making is another area where AI can have a significant impact. AI-powered data analytics systems can sift through massive volumes of data to find patterns and insights that humans may overlook. This allows newer SMEs to make informed decisions using real-time data.

For instance, applications or websites focused on market trend research and consumer behaviour insights can help drive product development and marketing tactics, ensuring they align with current wants and preferences. This helps reduce the cost of setting up surveys to find potential customers.

Streamlining processes

Since cost reduction is a top priority for SMEs, AI can help by streamlining processes. AI systems can predict maintenance requirements, lowering downtime and repair costs, and optimise supply chains by anticipating demand and managing inventory levels effectively.

These applications not only save costs but also increase overall operational efficiency.

In several sectors, innovation and establishing a competitive advantage are critical for SMEs to succeed.

This technology creates new opportunities for product and service innovation. Whether through AI-driven product design or the development of smart services that react to customer requirements, SMEs can utilise AI to stay ahead of the competition and differentiate themselves in the market.

Consider the case of a small retail company that used an AI-powered recommendation system on its e-commerce platform. This system used client purchase history and browsing tendencies to recommend items, resulting in a significant boost in sales and consumer engagement. These real-world success stories demonstrate the actual benefits that AI can offer to SMEs.

To summarise, AI provides numerous opportunities for SMEs to increase productivity, make better decisions, cut costs, customise consumer experiences and innovate.

As AI technology advances, its accessibility and affordability are expected to improve, making it an essential tool for SMEs seeking growth in a competitive setting. SMEs that adopt AI now will be well-positioned to reap its benefits and ensure a profitable future.

-- BERNAMA

Dr Faiz Masnan is a Senior Lecturer at Universiti Malaysia Perlis (UniMAP).