SMEs today face a daunting a challenge. Many are in di-lemma between continuing with the status quo or rising to the occasion to explore digital technologies such as big data, artificial intelligence (AI) and cloud computing.
What holding them back? MALAYSIA SME spoke to Fusionex managing director Datuk Seri Ivan Teh, who says lack of funding and know-how are often seen as key barriers. Fusionex is an established multi-award winning data technology provider.
“SMEs have this notion that embracing AI requires a huge amount of investment. However, for those who have funding, the right skill sets and know-how can be a stumbling block too,” said Teh.
AI is still nascent among SMEs, and this is not limited to just firms in Malaysia but applies to firms from all over the world.
“When it comes to AI, companies need to know how to store, process, analyse, and take action on data. This cannot be done with pen and paper or a mere Excel spreadsheet.
Companies need a proper data collecting system to store a huge amount of data. This database will be used to do pattern recognition, which then enables the firm to make informed business decisions.
“You can either have one computer working for a hundred days, or hundred computers working for a day to produce the same outcome. But SMEs have to ask themselves which methodology is more productive and cost efficient,” said Teh.
He added that with AI, business decision makers do not have to wait for 100 days to come up with a solution. They could do it within a day or in a matter of hours. They do not have to manually traverse through “ten million pages of data to deduce a conclusion or identify the next action plan.”
Nevertheless, despite the com-mon perception that AI is expensive, Teh said that it only costs SMEs “a single digit fraction of the total revenue earned as a result of applying the technology.”
Teh gave an example of an SME selling merchandise such as apparel and utensils, which was able to spike up its sales from almost zero to RM28 million a year by using analytics and AI. The firm did not have an online footprint when they first approached Fusionex.
All they had was a website which was not searchable on Google. When searched, the website would appear on the later pages, such as page nine and ten. “As you know, people do not go up to page nine. They go to the top of page one,” said Teh.
By using AI, Fusionex transformed the firm’s website into a data driven engine. A data driven approach does not wait for customers but customises a website, which in turn increases traction. To make this happen, the firm invested in time, effort, installation of analytics software, and upgraded its cloud computing technology and website speed to reach their target audiences in rural areas, where internet speed is generally slow.
Another SME that had benefited from AI is a palm-oil manufacturing company. By installing patented technology that applies AI, Fusionex was able to minimise downtime in the factory, increase the crude palm oil extraction, and increase the quality of extracted oil.
“The AI technology in place identifies circumstances that allow maximum yield of crude palm oil. This is subject to parameters such as temperature, humidity and water level. Due to better extraction and lack of wastage, the amount of oil extracted increased by 6% to 8%. Additionally, the quality of oil also improved, allowing the company to sell their oil at a higher price,” said Teh.
The application of AI is not limited to any industry, but can be incorporated across the board in all types of industries. In manufacturing, AI can be used to minimise the downtime of a ma-chine. Machines can crash if over-worked or in high temperature. Human beings will not be able to monitor the temperature of a ma-chine every ten minutes. But by using AI a sensor that measures temperature at every second can be installed. If anything anomalous is sensed, the sensor immediately sends an alert, reducing the risk of breakdowns or even worse, accidents.
In the fashion space, AI can be used to reach out to a more targeted set of customers when blasting out promotions or advertisements. This method has a higher conversion rate compared to setting up billboards or sending emails to every single customer in the database. “AI helps identify customers’ preferences and segment them into groups that make marketing more effective,” said Teh. When it comes to transportation and logistics, Al can be used to maximise trips, and not go on half-load. By identifying the locations and the number of parcels that has to be de-livered, the cost per trip can be reduced and revenue per trip increased.
On the other hand, in the travel and hospitality industry, the airlines, hotels, resorts and theme parks aim to achieve the maximum occupancy rate. Meanwhile, consumers want the best deal at the right time. Against this backdrop, AI can be used to categorise travellers into price, time and destination sensitive people. Once this is established, targeted marketing campaigns can be designed to yield maximum profit and satisfactory at the customer’s end.
“SMEs need to have an open mind. They should erase the belief that they have hit the maximum capacity and that they are going to be replaced. Instead, they should explore what’s out there and the opportunities that are available to help them become more competitive,” said Teh.
“This could involve a combination of recruiting the right people, working with the right partner, embracing the right technologies and investing strategically in the areas that will strengthen their businesses. AI can help identify prospective clients, the right markets, and the right products to a targeted cluster of customers.”
Fusionex is an established multi-award winning data technology provider specializing in Analytics, Big Data, Machine Learning and Artificial Intelligence (AI). Its offerings are focused on helping clients unlock the value and derive in-sights from data. Fusionex is the largest Big Data Analytics company and market leader in ASEAN, bringing state-of-the-art, innovative and break-through data-driven solutions to its stable of clientele (including Fortune 500, FTSE companies, large conglomerates as well as a wide array of small and medium enterprises (SMEs)) that spans across the United States, Europe as well as Asia Pacific.
Fusionex has recently entered into a strategic partnership with Alibaba Cloud to drive digital transformation across the region.