One of our Partners, Simon Manetti who is who is currently very active in the IT space, has provided insightful, balanced perspectives that cut through the current hype of AI, especially for small businesses.

McKinsey expects gen-AI programs to cost $3 in change management for every $1 in development and reports that only 15% of companies surveyed attribute meaningful earnings from gen-AI activities.¹ Large corporates have certainly developed compelling use cases. Out-of-stock monitoring (Woolworths), prediction of high-risk centres during extreme weather events (Suncorp) and streamlining of mortgage applications (Westpac) are but a few of many examples. 

However, given the difference between SMEs and corporates in terms of scale and resources, the road to ROI in AI for SMEs is far from clear. One might also question whether the road to ROI has been mapped for corporates given Stephen King’s² recent statement that Australia was probably at the top of the AI hype cycle and still plagued by unrealistic timelines and forecasts.³  

AI’s potential for disruptive value creation is indisputable. However, non-tech SMEs are likely to adopt an approach that balances optimism with caution. That is, they will cheer on investment by big tech and corporates while only gradually integrating proven commercial tools and products into their operations. 

The first wave of such use cases has already emerged: 

• Concision, e.g. summary of meeting minutes 
• Creative content, e.g. copywriting, key visual ideation, etc.
• Customer Service, e.g. off-the-shelf chatbots for websites
• Code Generation and Debugging

Let’s see how this space evolves!

Good luck and stay safe.                                                            

References:

       [1]  How CIOs can scale gen AI | McKinsey; Survey of 100 companies with revenues exceeding $50M; meaningful earnings defined as 5%+ of EBIT

[2] Australian Financial Review AI Summit, May 2024

       [3] Commisioner at the Productivity Commision, not the ‘King of Horror’