There’s a productivity problem in the UK, and small businesses are unfortunately not immune. While it’s a long-standing issue, poor productivity has been exacerbated by below-trend economic growth and one-off events like Brexit – it’s definitely tough out there! Xero’s Small business productivity: Trends, implications and strategies report reflects these macroeconomic changes, showing that small business productivity in the UK fell by 7% between August 2022 and December 2023, and is now well below pre-pandemic levels.
Without improving labor productivity, we risk a domino effect where small businesses struggle to reinvest capital to fuel growth. Business owners cannot simply sit back and wait for economic conditions to improve and are therefore understandably looking for ways to increase the productivity of their operations.
For many, this means turning their attention to technologies like artificial intelligence (AI) to see if they can help solve the productivity problem. AI is increasingly being cited for its ability to automate processes and free up business owners from process-intensive and time-consuming tasks that hinder productivity. Time is often the most precious commodity for small businesses, and AI is starting to show how it can give owners some of that time back so they can focus on more important tasks.
Of course, AI technology won’t solve the productivity problem entirely, nor is it a one-size-fits-all solution for every small business – especially when AI itself is a variety of different technologies and capabilities. But there are some key considerations for small business owners looking to leverage and utilize this technology effectively – namely, understanding where it can benefit them, what its limitations are, and finding ways to safely experiment with emerging but relevant tools.
EGM Technology Research and Advocacy at Xero.
Optimize tasks, processes and workflows with AI
A good place to start is to look at key business processes and identify the critical activities that are causing productivity roadblocks due to the requirement for manual, repetitive intervention. From there, small businesses can set up experiments that explore how AI can help automate or augment these tasks, reducing the effort required to complete them at scale.
Some businesses benefit from streamlining tasks like composing emails and producing documents for stakeholders that might otherwise take time. Different types of AI can help start and, in some cases, complete this work more quickly and accurately, freeing up staff to focus on roles that are more pressing or require more creativity.
Additionally, small business owners can also gain critical insights that can drive smarter decisions. For example, our research tells us that most small businesses struggle to maintain healthy cash flow. AI capabilities available today can help address this pain point by helping answer deeper questions about an organization’s finances, forecasting, and providing analysis on where to dig deeper when seeking professional advice. This can help busy business owners feel more in control of their cash flow and know where to focus their efforts, helping them prepare for potentially lean months.
In addition to optimizing tasks and processes, small business owners can also look to optimize their workflows by leveraging the new conversational capabilities that generative AI offers. One example of this is using AI-powered tools that meet you where you’re already doing work, saving you time and eliminating the need to switch between applications.
Risk awareness when using AI
We are also gaining a better understanding of the limitations of AI technology, as well as some of the risks inherent in its use, such as misinformation, discrimination and bias. For functions such as finance and accounting, the problem of hallucination – where data points are ‘made up’ by the model – can be exacerbated if the datasets used are not the right ones for the job, or are not kept up to date.
And when using live but sensitive or proprietary data, whether the AI tool is managed directly by a small business or built into products and services they use, it is critical to take steps to prevent LLMs from exposing this data to other, unauthorized parties. This is especially important when using “free” or public AI tools: taking the time to investigate how they use and protect the data provided to them is essential to managing the risk associated with their use.
It’s a marathon, not a sprint
As with any advanced technology, speculation about the “right” amount and style of AI implementation in small businesses is to be expected and should be welcomed. Small business owners have an increasing stake in how technology can best be used to improve productivity in their world and should have opportunities to evaluate where it can be most useful to them.
Questions like: Where will AI deliver the most value to my business? When will it start delivering better returns for the time I have to invest in exploring and using it? And more importantly, how do I best leverage the technology given my business goals and objectives? – are important to ask, as they can be extremely helpful in focusing efforts as they navigate a landscape of opportunities. Speaking with trusted advisors can also help business owners feel more confident about their transformation journey and a future with AI on their side.
When it comes to harnessing AI and unlocking its potential to accelerate and improve productivity, small business owners need to be well-informed. Understanding the capabilities, limitations, risks, and rewards of AI will enable them to make better decisions about experimenting with and implementing these technologies in their businesses. In this way, productivity can be gradually unlocked, one improved, AI-powered process at a time.
We provide an overview of the best iOS productivity apps.
This article was produced as part of Ny BreakingPro’s Expert Insights channel, where we showcase the best and brightest minds in the technology sector today. The views expressed here are those of the author and do not necessarily represent those of Ny BreakingPro or Future plc. If you’re interested in contributing, you can read more here: https://www.techradar.com/news/submit-your-story-to-techradar-pro