How Can SMBs Avoid the Lure of AI’s Hype?

Imagine you are a small business owner who wants to improve your customer service. You hear about a new AI chatbot that can answer questions and handle requests. You buy and install it on your website, hoping to impress your customers and increase your sales.

But soon, you realize that the chatbot is less intelligent than you thought. It often misunderstands your customers, gives wrong or irrelevant answers, or repeats the same phrases repeatedly.

Your customers are frustrated and angry and leave your website. You wasted your money and time on an AI solution that did more harm than good.

AI hype can mislead and disappoint small to medium-sized businesses (SMBs) with an exaggerated or unrealistic expectation about the capabilities and benefits of AI.

It is often fueled by media reports, marketing campaigns, or sensationalized claims that overstate the potential of AI or ignore its limitations and challenges.

Key Takeaways

  • AI can enhance customer experience, operational efficiency, and innovation for SMBs, driving growth and competitiveness.
  • But poor implementation can be a costly way to damage your credibility, lower customer satisfaction, and hurt your operations.
  • SMBs should approach AI adoption strategically, setting clear objectives and evaluating data quality and internal capabilities.
  • Challenges include wrong product fit, data scarcity, security risks, and bias, and each requires proactive mitigation strategies, including external expertise and robust security measures.
  • SMBs must set realistic goals, decide on the most important KPIs, and ensure ethical and legal compliance to harness AI’s full potential.

It’s a dangerous trap to fall into, leading to poor decisions, wasted resources, and lost opportunities. A business may adopt an AI solution without clearly understanding business needs, goals, and challenges or considering AI’s costs, risks, and ethical implications.


Furthermore, SMBs may miss out on the real benefits of AI by focusing on the wrong problems, solutions, or metrics or by neglecting the human factors essential for any AI project’s success, such as user experience, trust, and collaboration.

How Can SMBs Avoid AI Hype and Set Realistic Goals?

SMBs must follow a systematic and strategic approach that considers their business problem, objective, data, capabilities, solutions, and impact.

First, they should clearly define the problem they want to solve and the purpose they want to achieve and identify the key performance indicators (KPIs) that will help them measure their progress and success.

Second, SMBs should assess the quality, quantity, and availability of their data, as well as the skills, tools, and infrastructure of their team, and evaluate the viability and desirability of their AI solution, taking into account the technical, business, and user aspects.

Third, SMBs should research and compare different AI solutions that match their problem and objective, considering their strengths, weaknesses, and trade-offs, and look for evidence of their effectiveness, reliability, and scalability, such as case studies, testimonials, or reviews.

Fourth, they should test and validate their AI solution with real data and users, monitor and evaluate its performance, impact, and feedback, and make necessary adjustments.

And finally, SMBs should ensure that their AI solution is ethical, fair, and transparent and complies with the relevant laws and regulations.

How Can SMBs Utilize AI for Growth and Efficiency?

AI can offer many benefits for SMBs, such as enhancing customer experience, improving operational efficiency, and driving innovation and differentiation, and can help SMBs understand and anticipate customer needs, preferences, and behavior and provide personalized, relevant, and timely services and recommendations.

In addition, AI can improve customer satisfaction, loyalty, and retention by enabling faster, easier, and more convenient interactions and transactions.

For example, an SMB may use an AI chatbot that can answer common questions, provide product information, or process orders, and that can also learn from customer feedback and preferences and adapt accordingly.

AI can also help SMBs automate and optimize various business processes, such as inventory management, order fulfillment, accounting, or marketing. For example, an SMB may use an AI system that can monitor and predict inventory levels, optimize supply chain and logistics, or generate invoices and reports, alerting and assisting human workers when needed.

Furthermore, AI can help SMBs discover new insights, opportunities, and solutions by analyzing large, complex data sets and generating novel and creative ideas.

For example, an SMB may use an AI tool that can analyze customer feedback, market trends, or competitor strategies and suggest new features, products, or campaigns, and that can also test and validate them with accurate data and users.

The Challenges and Risks of AI for SMBs

One challenge is the lack of data and skills that SMBs may face in accessing, collecting, or processing enough data to design, develop, train and run their AI solutions, or interpret and act on their results. To overcome this challenge, SMBs should seek external help from experts, consultants, or vendors or invest in training and education for their teams.

Another challenge is the security and privacy issues that SMBs may face from hackers, cyber attacks, or data breaches that could compromise the security and privacy of their data and AI solutions or from legal or ethical issues, such as data ownership, consent, or compliance, that could affect their reputation and trust.

To mitigate this risk, SMBs should implement security and privacy measures, such as encryption, authentication, or backup, use trusted and reputable AI providers, or follow the best practices and standards for data and AI governance.

A third challenge is the bias and discrimination that SMBs may encounter in their data, which could lead to unfair or inaccurate outcomes or decisions.

Bias and discrimination can arise from various sources, such as data quality, algorithm design, or human intervention, and could affect multiple groups, such as customers, employees, or partners.

To prevent this problem, SMBs should audit and monitor their AI and ensure they are diverse, inclusive, and representative, or use fairness and accountability tools or frameworks for data and AI.

The Bottom Line

AI is not a magic bullet that can solve all business problems, but it is a powerful tool that can help businesses achieve their goals when using it wisely and responsibly.

To avoid AI hype and set realistic goals for intelligent solutions, SMBs should follow a systematic and strategic approach that considers business problems, objectives, data, capabilities, solutions, and impact.

Only then can SMBs leverage AI for growth and efficiency and gain a competitive edge in the market.


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Assad Abbas
Tenured Associate Professor

Dr Assad Abbas received his PhD from North Dakota State University (NDSU), USA. He is a tenured Associate Professor in the Department of Computer Science at COMSATS University Islamabad (CUI), Islamabad campus, Pakistan. Dr. Abbas has been associated with COMSATS since 2004. His research interests are mainly but not limited to smart health, big data analytics, recommender systems, patent analytics and social network analysis. His research has been published in several prestigious journals, including IEEE Transactions on Cybernetics, IEEE Transactions on Cloud Computing, IEEE Transactions on Dependable and Secure Computing, IEEE Systems Journal, IEEE Journal of Biomedical and Health Informatics,…