Starting SMBs with AI

HR functions in small and medium-sized businesses (SMBs) are often outsourced when it comes to using artificial intelligence to improve operations. That’s because they typically don’t have the resources to build the internal infrastructure or hire the AI ​​experts needed to make the technology work.

But there’s a new option that allows SMBs to start implementing tools like chatbots with little upfront financial investment: artificial intelligence-as-a-service (AIaaS) platforms. These third-party vendor solutions offer out-of-the-box AI capabilities to organizations in ways similar to software-as-a-service (SaaS) products that are common in the HR technology industry.

The gap between AI Have’s and Have-Nots is growing

Recent studies show a growing gap in AI adoption between large and small companies. In the year According to a global study from IBM, large organizations are twice as likely to deploy AI in 2022, compared to 69 percent in 2021. Some of the main factors hindering successful AI adoption include limited internal AI expertise, a high price tag, and a lack of tools and platforms to develop AI models.

AIaaS platforms enable small businesses to start using AI by offering ready-made platforms, including chatbots that can answer frequently asked questions from job candidates and employees or improve integration between different HR systems. Using these pre-trained AI tools can help SMBs avoid investing in specialized hardware such as GPU-based processors and other infrastructure needed to create and use AI on-premises.

While AI programming experts are in short supply—who can typically command high salaries—AIaaS platforms allow SMBs to avoid those recruiting and compensation issues because most require little or no coding skills for successful use.

HR technology analysts say AIaaS platforms can be great for HR functions in small businesses that are still figuring out how to use AI in their operations.

“AIaaS can be a great option for small or medium-sized businesses that don’t have a large data science team or advanced infrastructure,” said Alexander Wurm, a specialist analyst for enterprise software at Boston-based Nucleus Research. “These pre-trained AI models have recently taken off, to create chatbots that can be used on websites, for voice recognition purposes or data classification. The platforms allow SMBs to see their value from experimenting with AI with low upfront investment.”

Research suggests that more SMBs may invest in these platforms in the future. A study from London-based technology research and consulting firm Analysys Mason found that SMBs plan to increase their technology spending by 6 percent this year over 2022 levels, with some of that focused on services-as-a-service technologies. Spending on platform-as-a-service (PaaS) solutions is expected to grow 18 percent this year from last year, according to the survey.

“SMBs want more flexibility without committing to expensive IT resources,” wrote the authors of the Analysys Mason study. “Early adopters are increasingly using advanced analytics tools such as business intelligence and AI-powered applications.”

AIaaS providers will grow.

While the big cloud infrastructure players, including Amazon, Google and Microsoft, offer cloud infrastructure-as-a-service platforms that typically include some AI capabilities, a growing number of smaller vendors have emerged to meet the AI ​​needs of SMBs. Examples of vendors include H20.ai, Levity, and Odus.

These platforms often have a price per use subscription.

For example, pricing listed on AIaaS provider Levity’s website shows a $49 monthly fee for small organizations looking to automate simple workflows using AI. The fee covers 500 “actions” per month, with actions defined each time AI is used to segment an image, PDF, or fragment (an email body, for example). Each workflow — like sending an e-mail or updating a record — is considered an action. The monthly fee includes 10 AI “trainings” per month that involve teaching the AI ​​tools new tasks.

“There are also some platforms that allow you to import your own data and fine-tune the AI ​​model,” Wurm said. “These options are more expensive because you’re actually training the AI ​​model instead of using it out of the box.”

Lee Sustar, principal analyst at research and consulting firm Forrester, said other options for HR teams at SMBs include looking for AI capabilities in existing technology platforms or exploring options from larger cloud providers. Products that can incorporate AI capabilities.

“Some of the bigger players have AI offerings focused on SMBs or have partners that offer those services,” Sustar said. “For some medium-sized companies, AI capabilities may be accessible through broader systems their companies already use, such as call center or lead generation technologies.”

Limitations of AIaaS solutions

AIAS platforms have limitations HR leaders should be aware of, HR technology analysts say. Many platforms are designed for general purposes but cannot be easily customized to use company-specific data eg.

“HR leaders need to recognize that these platforms are often not optimized for some of their use cases,” Wurm said. “Platforms are easy to deploy and cost less than other options, but you see gaps in performance and accuracy because you’re not building the platforms yourself. For example, if you ask ChatGPT to do something, it might not perform well because it doesn’t have that specific level of training.”

Brandon Medford, senior principal analyst in Gartner’s IT practice, said HR buyers need to understand the compliance, data privacy and security issues involved when working with AIAS vendors.

“For example, you want to know if there is any sensitive or proprietary information that the third-party service provider is accessing, storing or sharing that has compliance or regulatory issues,” Medford said. “There are also the same data privacy and security concerns you have when working with any vendor where system integrations are involved.”

AI buyers should ensure there is good visibility into how the AI ​​in these platforms is working to avoid the “black box” syndrome that can lead to artificial intelligence being used in biased or unethical ways when automating HR processes or making hiring decisions, he said. Professionals.

Dave Zielinski is the principal of Skewed Communications, a business writing and editing company in Minneapolis.