Automating business processes helps to remove the existing owner from the business while enhancing the value proposition for potential buyers

How you can boost the value of your corporate business with artificial intelligence (AI).

Uptake of AI amongst UK businesses remains limited, according to the latest data from the ONS. As of mid-December 2023, 85% of businesses reported that they were not currently using AI, while 83% said they had no plans to adopt the technology within the next three months. This blog explores how the inclusion of AI in day-to-day practices can drive up the value of corporate businesses. 

According to a survey by Sage, the accounting software supplier, just 16% of UK small businesses plan to adopt AI in the next three years.

The verdict is clear: AI adoption rates amongst UK SMEs remains stifled by unclear use, skills deficits, and hesitancy over ROI. 

Yet, AI was an instrumental factor in driving the S&P 500 by 24% in 2023 and is predicted to add £31bn per year to the UK economy, according to a KPMG analysis. Away from SMEs, it’s a different story. Many large businesses are investing heavily in AI, with 71% of leading UK CEOs stating the technology is a top priority. Indeed, it seems that even the mere mention of AI in earnings calls is able to move stock prices amongst larger corporations. 

What will it take to ensure SMEs consider the implementation of AI?

In October 2023, Science and Technology Secretary Michelle Donelan announced £5m for feasibility studies for 100 AI projects involving small businesses across the UK. This is a step in the right direction to encourage positive engagement, but it won’t be enough on its own.

While you shouldn’t let FOMO drive your investment in AI, it is important to think about how it could disrupt your business model, and importantly, how it could boost the value of your corporate business.

“Automating business processes helps to remove the existing owner from the business, enhancing the value proposition for potential buyers,” says Hilton Smythe CEO.

Buyers in M&A transactions are more likely to pay a premium if your firm has everything it needs to operate without you. However, with owner-managed businesses, owners quite often act as a jack-of-all-trades, overseeing supplier relationships, customer service, sales forecasting, administration, marketing, and more. 

AI, by accelerating the analysis of large data sets, can automate a lot of these processes. Microsoft’s Azure Bot Service, for example, can handle customer queries 24/7 without human intervention, potentially improving customer satisfaction while freeing up your time to focus on more complex or strategically valuable cases.

Administration can also be automated via intelligent document processing (IDP), which can extract data from physical or digital documents, such as invoices or forms, reducing the potential for human error. This could be game-changing for those in the business services sectors, such as insurance, finance and mortgage brokers.  

In November 2023, news broke that AI is now outperforming our best weather forecasting technology – with cross-over applications for SMEs. According to McKinsey, AI-powered demand forecasting can reduce errors by 30-50% in supply chain networks, leading to a 65% reduction in lost sales due to inventory out-of-stock situations and reducing warehousing costs by 10-40%. Available AI-powered financial modelling services include Azure Machine Learning and Peak AI, amongst others.

“SMEs can source external AI solutions to compensate for a lack of internal capacity”.

As well as helping to automate processes, external AI solutions can help compensate for a lack of internal capacity, reducing staffing costs and boosting profitability. 

“When discussing their businesses’ current weaknesses with us, owners often mention limited capacity in sales and marketing” said Hilton Smythe CEO Gareth Smyth. AI can go some way to rectifying this: Brand24 leverages the technology to conduct sentiment analysis, engagement tracking, trending hashtags, reach tracking, and finding influencers, while Flick leverages it to write social media captions, schedule posts, and brainstorm ideas. 

If you’re a B2C business, platforms like Brandwatch can provide consumer intelligence, allowing you to remain abreast of the latest trends, while platforms like Trellis offer e-commerce business tools such as advertising automation for bids, ROI prediction for promotional campaigns and an AI-powered pricing module. 

Business owners who are concerned about their search engine visibility can use tools such as Surfer SEO to audit existing content, compare it with the competition and optimise it. 

And if you don’t have an in-house software engineer/programmer and don’t have the funds for an outsourced facility, popular AI chatbots like OpenAI’s ChatGPT can even programme or fix code on your website to improve user experience.

“AI can quite simply create added value within your business”.

AI can quite simply create added value within your business, and with proper governance and human oversight, can place you ahead of the competition by making cost-saving efficiencies. 

And paradoxically, it should actually be easier to adopt AI in smaller organisations than large corporations due to the required corporate “rewiring”. Alex Sukharevsky, head of McKinsey’s AI QuantumBlack advisory division, told The Times: “There is no correlation between creativity and scale. Some of these things are actually more easily done in a smaller set-up than in a bigger corporation.”

Yes, larger corporations have access to great swathes of proprietary data (the fuel of AI models), but smaller companies are nimbler with less complicated management structures. 

It is perhaps only fitting, then, to end with a quote from the King of Chatbots, ChatGPT: “AI can elevate a small company’s value by streamlining operations, fostering innovation, and creating additional revenue sources, making it more appealing to investors.”