More family businesses are adopting artificial intelligence to compete and grow, according to a new report from Deloitte.
In a survey of more than 1,500 family businesses across 35 countries, 86% reported actively or selectively using AI across their organization. According to the report, many people now believe that digital transformation is essential for “adaptability and resilience.”
“Family businesses are in transition. They are making real progress, but are still navigating the transition from incremental adoption to enterprise-wide digital maturity,” Dr. Rebecca Gooch, head of Deloitte Private Global Insights at Deloitte Global, said in a statement.
Many family business leaders say that while they see value in AI and other technologies, they still face some challenges.
How family businesses are using and finding value in AI
AI has become a core technology for family businesses. More than 40% are using AI in many areas of their business, 42% are using AI for “some business functions,” and just 2% say they are not using AI at all.
Family businesses are using AI for multiple functions, including improving process efficiency (40%), risk management (39%), customer relationship management (39%), and customer experience and engagement (38%).
More than half of the companies surveyed said they are making sufficient investments in the technology they need to support their business now and in the future. However, 48% said investment levels were “inadequate” and 37% said they were at a “moderate stage of overall digital investment.”
Overall, family businesses report being satisfied with their technology investments, with more than 60% saying they are delivering benefits such as improved productivity, efficiency, competitiveness, risk management and decision-making.
Still, many family businesses are concerned about keeping up with evolving technology, with 51% citing “inappropriate technology implementation” as a moderate or high risk to growth over the next 1-2 years.
Digital transformation can be challenging for small and family-run businesses. Working with outside experts can be helpful, especially when your business lacks expertise.
How to get more value from your technology investments
“The choices leaders make today regarding AI and digital transformation can impact not only their immediate performance but also the type of business they ultimately hand over to the next generation,” Gooch says.
According to the report, these tips can help family businesses embrace digital transformation and bring value to their organizations.
- Align technology investments with business goals. Rather than adding technology just for the sake of it, start with goals in mind, such as increasing automation or improving customer service. Drive your digital transformation strategy based on your goals and deliver maximum value.
- Focus on “Enterprise Integration”. AI and other technologies can streamline processes such as customer service, but to unlock maximum value, family businesses must go all out by implementing AI and other technologies across their specific business practices.
- Focus on governance and risk management. Family business leaders see technology as a way to reduce risk. However, according to the U.S. Small Business Administration, it is important to integrate governance strategies into digital transformation, including intellectual property, security risks, customer trust, and other ethical concerns.
- Train your team. Invest in digital talent and upskill your workforce in AI and other technologies. Enabling employees to use and excel in these technologies gives family businesses an advantage, according to the World Economic Forum.
- Bring in the experts. Digital transformation can be challenging for small and family-run businesses. Working with outside experts can be helpful, especially when your business lacks expertise. These experts have the knowledge to help companies implement AI to achieve their goals and drive growth.
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