Right-sizing AI governance: Starting the conversation for SMEs

Artificial intelligence is no longer the exclusive domain of large enterprises. From retail and real estate to logistics and law firms, small- and medium-sized businesses are beginning to experiment with AI.

With three out of five small- and medium-sized businesses using or planning to use AI in some form or another in the next two years, competitive edge is a significant catalyst for AI adoption. More specifically, the appeal of AI to cut costs, increase efficiency, drive creativity and enhance decision-making is further amplified by McKinsey's 2024 "The state of AI" report, which found 78% of respondents from large competitors have already adopted AI.

Yet with the promise AI holds, few SMBs are prepared for the accompanying risks. Quickly adopting AI without a plan, adequate training or even rudimentary understandings of the everchanging AI regulation and compliance landscapes poses a significant AI management challenge for SMBs.

To further confound the matter for SMBs, the entire AI governance discourse is not tailored to them. In fact, the discourse originally emerged in the context of AI super adopters — enterprises that can afford to integrate AI across multiple departments, have the ability to train and hire specialized talent, and have the resources to strategically align AI's opportunities to organizational goals while outsourcing tailored frameworks for detecting and mitigating risk.