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04. October 2024

Why SMEs often fail in the face of AI

At the Unternehmerforum Oberlausitz (UFO), HSZG highlights the benefits of artificial intelligence for small and medium-sized enterprises and explains why its introduction is often challenging.

Tino Schmidt, Prof. Matthias Schmidt and David Sauer at the Oberlausitz Entrepreneurs' Forum. They are standing in front of roll-ups between two bar tables.
Photo: HSZG David Sauer, Prof. Matthias Schmidt and Tino Schmidt (from left to right) at the Oberlausitz Entrepreneurs' Forum

AI applications are of great importance for small and medium-sized enterprises (SMEs) because the use of artificial intelligence comes with numerous promises. For this reason, the "Digitalstress" working group and the team from the PAL project (Perspektive Arbeit Lausitz) were active in several program items at the Unternehmerforum Oberlausitz (UFO) on 5 September at UFO 2024 in Bautzen. AI should offer advantages that help SMEs in particular to remain competitive and increase their efficiency.

What are the advantages of AI for SMEs?
  • AI can automate repetitive, time-consuming tasks, enabling SMEs to use their resources more efficiently. This reduces costs and gives employees time for more value-adding activities.
  • AI-supported data analysis helps companies to make informed decisions. By analyzing large amounts of data, SMEs can better understand market trends, customer behavior and operational challenges.
  • AI-based systems such as chatbots or recommendation systems improve customer communication and satisfaction by offering customized solutions and responding quickly to requests.
  • By implementing AI, SMEs can work more efficiently and reduce operational costs by streamlining work processes and minimizing errors.
  • AI enables SMEs to grow faster and scale their operations as many AI solutions are flexible and customizable.
  • As large companies (Amazon & Co.) often already rely on AI, SMEs can use AI to improve their competitiveness and tap into new business areas in order to keep up with larger players.
  • Overall, AI tools promise SMEs an opportunity to drive innovation, increase efficiency and focus on core competencies, which is crucial for SMEs to be successful in the long term.
Tino Schmidt and David Sauer at the UFO workshop. Both are standing in front of stands. David Sauer holds a microphone in his hand.
Photo: Matthias Schmidt Tino Schmidt and David Sauer (from left to right) at the UFO workshop

Why does it so often go wrong?

The Digital Stress working group at Zittau/Görlitz University of Applied Sciences looks at the interaction between people, technology and organization (MTO) from an ergonomic perspective and helps companies prepare for and support change processes. The introduction of AI tools usually goes wrong if the organization and people are not involved and processes in the value chain are not taken into account. When AI implementations fail, the following aspects are usually forgotten: Preparing employees, the organization and work processes is crucial before introducing Artificial Intelligence (AI) to ensure a successful integration. Here are some important reasons:

How do you gain employee acceptance?
  • Many employees fear that AI could threaten their jobs. Good preparation helps to allay these fears by clearly communicating that AI are tools that are intended to make work easier and not replace it. Fears of loss of status or role conflicts need to be addressed.
  • The introduction of AI requires a cultural change, particularly in the handling of data. Employees and managers must be open to change and recognize the benefits of the new technologies. Roles are changing. This can be achieved through training, clear communication and involving the workforce in the introduction process.
  • Skills development: Employees need to develop skills in dealing with AI systems in order to fully exploit their potential. This includes technical skills, but also the ability to interpret data and work with new technologies.
  • Without sufficient time for employee development, skills gaps can arise that affect productivity and (slow) down the introduction of AI.
  • Adaptation of work processes: AI can significantly change existing work processes. To ensure that these changes bring the desired benefits, processes often need to be adapted or redesigned in advance so that they are compatible with AI-supported systems.
  • The introduction of AI works best when it is integrated into existing processes. These processes may need to be streamlined or optimized in order to interact smoothly with the new systems. This is where the BASA IV provides a useful tool to quickly and reliably identify resources and problems in the work organization.
  • Organizational development: Organizations must be flexible in order to adapt to new circumstances. For example, AI can speed up decisions in production or customer communication, which requires the entire organization to be able to react more quickly.
  • The various departments of an organization must be prepared to use AI technologies sensibly and work together to achieve maximum benefit. This may mean a complete reorganization, as the logic of the previous organizational structure no longer fits. We see this particularly often in failed digitalization projects in public administration.
  • Ethical and legal issues: Employees need to be trained in how to use AI responsibly and ethically. Data protection (GDPR), data security and transparency issues are important in order to avoid legal and ethical conflicts and problems.
  • For AI solutions to be used with confidence, employees need to understand how the systems work and how decisions are made. This increases trust in the technology and its results. This means that the demands on employees will increase rather than decrease.

The benefits of AI can only be realized more quickly if employees and processes are well prepared. A lack of preparation often leads to a delay in productivity and to the technology's potential not being fully exploited. Overall, thorough preparation ensures that the introduction of AI is not perceived as a disruptive factor, but as a helpful innovation. This promotes acceptance, increases efficiency and contributes to successful integration into the company. In large corporations, there are entire departments dedicated to the preparation and implementation of AI in the organization that manage the far-reaching change process. SMEs usually do not have their own experts, so it is good that the Zittau/Görlitz University of Applied Sciences has a project group that offers concrete support specifically for regional companies.

Photo: Prof. Dr. rer. nat. Matthias Schmidt
Ihre Ansprechperson
Prof. Dr. rer. nat.
Matthias Schmidt
Matthias.Schmidt(at)hszg.de
Faculty of Social Sciences
02826 Görlitz
Brückenstraße 1
Building II, Room 156
First floor
+49 3581 374-4315