Automating Small and Medium-scale Enterprises: What are the Emerging Trends?

According to the World Bank, a Small and Medium-scale Enterprise (SME) is any firm with up to 300 employees and annual sales not exceeding $15 million. In Ghana, the Ghana Statistical Service defines a small enterprise as a business employing fewer than 10 employees, while medium and large enterprises employ 10 or more workers.

Small and Medium-scale Enterprise (SMEs) constitute over 90% of businesses worldwide and account for approximately 60% of global employment. Despite their significant contribution to economic growth and job creation, SMEs are particularly vulnerable to disruptions because of their limited financial, technological and human resources. In today’s highly competitive business environment, operational efficiency has become critical to SMEs’ sustainability.

In that regard, the potential of Artificial Intelligence (AI) and automation to help businesses improve resilience and navigate economic uncertainties have been recognised. That said, automation refers to the use of technology to perform tasks with minimal human intervention, ranging from simple software applications to advanced AI-driven systems. Indeed, the primary business applications of Artificial Intelligence (AI) include automation, image and facial recognition, natural language processing, data analytics and predictive modelling. The global market for business process automation was valued at $ 18.7 billion in 2024 and is projected to reach $ 35.5 billion by 2030, growing at a CAGR of 11.3%.  While large businesses have long leveraged automation to scale operations and enhance efficiency, SMEs are only beginning to realise its transformative potential.

 

Modern AI systems can automate not only routine tasks but also complex and non-routine activities. Consequently, AI-enabled automation can free employees from repetitive and low-value tasks. In effect, it can allow them to focus on more strategic and value-adding activities. Moreover, automation can significantly improve SME productivity by reducing operational costs and increasing responsiveness to customer and market demands.

SME Technology Adoption

Artificial Intelligence possesses the characteristics of a General-Purpose Technology (GPT), meaning that it is broadly applicable across industries, stimulates innovation and generates substantial positive spillover effects. As a result, AI has the potential to transform the SME business environment by enhancing the efficiency of public administration, judicial systems and tax authorities while reducing regulatory burdens. Furthermore, AI can strengthen digital infrastructure, improve access to finance, facilitate workforce management and lower the costs associated with experimentation and innovation.

Emerging digital technologies also help SMEs to improve productivity across their value chains without a significant increase in physical resources. At the same time, these technologies support product differentiation, market segmentation and customer acquisition, thus, enabling SMEs to expand through digital networks. Several AI technologies are increasingly being adopted by SMEs, these include:

Machine Learning and Deep Learning: Machine Learning (ML) and Deep Learning (DL) are among the most widely used AI technologies due to their predictive capabilities. ML and DL enable SMEs to automate decision-making, optimise operations and enhance competitiveness by analysing large volumes of data. These technologies support applications such as credit risk assessment, demand forecasting, fraud detection and quality prediction.

AI Agents: The emergence of AI-agent automation represents a significant shift in how SMEs approach operations and strategy. Artificial Intelligence (AI) agents are autonomous software systems capable of sensing, reasoning and acting independently to achieve specific goals. These agents can be integrated with machine learning, natural language processing and predictive analytics to automate decision-making and task execution. For SMEs, AI agents can streamline customer relationship management (CRM), personalise customer interactions, forecast customer behaviour and strengthen customer loyalty. Because they are increasingly available through cloud platforms and Software-as-a-Service (SaaS) solutions, AI agents are becoming more accessible and affordable for smaller businesses. Indeed, Customer Relationship Management (CRM) and Supply Chain Management (SCM) software facilitate the integration of front office and supply-chain operations. These systems enable businesses to manage interactions with customers, suppliers, employees, and other stakeholders more effectively, thereby improving operational efficiency and customer satisfaction.

Robotic Process Automation and Computer Vision: Robotic Process Automation (RPA) automates repetitive administrative processes such as data entry, invoice processing and workflow management. Similarly, Computer Vision enables machines to interpret visual information, support applications such as quality control, inventory management and security monitoring.

Cloud Computing: Cloud Computing provides access to computing resources such as servers, storage, databases and software applications through the internet. As awareness of cloud computing grows and adoption barriers decline, SMEs are increasingly leveraging on cloud services to improve flexibility and enhance business continuity. Cloud services offer scalable and cost-effective solutions that eliminate the need for substantial investments in IT infrastructure.

Advanced Robotics: Robotics has evolved beyond performing simple repetitive tasks. Modern robots increasingly incorporate AI capabilities, which enable them to operate effectively in dynamic and unpredictable environments. AI-powered robots can analyse sensor data, identify objects, make decisions and execute complex tasks with minimal human intervention. Consequently, advanced robotics can improve productivity, safety and operational efficiency across manufacturing, logistics and service industries. However, challenges remain in areas such as object manipulation, orientation and system integration.

Radio Frequency Identification (RFID): RFID technology enables near-field communication and supports applications such as product identification, access control, inventory tracking, supply chain monitoring and payment systems. RFID systems improve operational efficiency and reduce losses by providing real-time visibility of assets and inventory,

Enterprise Resource Planning Systems: Enterprise Resource Planning (ERP) systems integrate and manage business functions such as finance, accounting, human resources, procurement, sales and inventory management. Enterprise Resource Planning (ERP) systems enhance operational efficiency and support strategic decision-making through the automation and optimisation of information flows.

Electronic Invoicing: Electronic invoicing (e-invoicing) promotes compliance-by-design by integrating accounting systems with tax regulations. It strengthens information security, reduces administrative burdens and improves interactions between businesses and tax authorities. Furthermore, e-invoicing facilitates automated tax reporting and support the pre-filling of corporate income tax and value-added tax returns, thereby improving efficiency and compliance.

Financial Technology (Fintech) Innovations: Automation and AI are also transforming SME access to finance. Technologies such as digital identity verification, distributed ledger technologies (DLT), big data analytics, marketplace lending, mobile banking and alternative credit scoring methods are reducing information asymmetries and transaction costs. As a result, financial institutions can better assess SME creditworthiness while SMEs gain improved access to funding necessary for innovation and growth.

Critical Barriers to Automation in SMEs

Despite the transformative potential of automation and AI, many SMEs face substantial challenges in adopting these technologies. One major challenge is the prevalence of legacy systems that are often incompatible with modern automation tools. Integrating new technologies into existing workflows can be complex, time-consuming and disruptive in the short term. Another significant barrier is cost. Advanced automation solutions, including AI-powered applications and ERP systems, frequently require considerable upfront investment. For SMEs operating with limited financial resources, the costs associated with acquisition, implementation, training and maintenance may appear prohibitive. Furthermore, the return on investment (ROI) may not be immediately visible, making it difficult for business owners to justify the expenditure. In addition, many SMEs face shortages of digital skills and technical expertise, which can limit their ability to successfully implement and manage automation technologies.

The Way Forward

To overcome these challenges, SMEs can leverage external sources of AI expertise and technology solutions. Cloud-based Software-as-a-Service (SaaS) and Machine Learning-as-a-Service (MLaaS) platforms offer scalable and cost-effective access to advanced technologies without requiring extensive technical knowledge. These solutions also incorporate built-in security features and flexible pricing models that are particularly suitable for SMEs. Government likewise has an important role to play in supporting SME digital transformation. Public policies should focus on promoting digital literacy, strengthening digital infrastructure, encouraging data-driven cultures and improving digital risk management practices. Government and other stakeholders need collaboration to provide reskilling and upskilling programmes that prepare workers for an increasingly automated workplace.

Conclusion

The future presents significant opportunities for SMEs willing to embrace automation and digital transformation. Emerging technologies offer the potential to improve operational efficiency, and support innovation. At the same time, SMEs possess valuable industry-specific knowledge and agility that can provide a competitive advantage in rapidly evolving markets. SMEs can strengthen their resilience, improve productivity and position themselves for sustainable growth in the digital economy by strategically adopting automation technologies and investing in workforce development.

Further Reading:

1. Hokmabadi, H.; Rezvani, S.M.H.S.; Hokmabadi, H.; de Almeida, N.M. Business Resilience Through AI-Agent Automation for SMEs and Startups: A Review on Agile Marketing and CRM. Information 2025, 16, 1000. https://doi.org/10.3390/ info16111000

2. OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/bdb9256a-en

BERNARD BEMPONG 

Bernard is a Chartered Accountant with over 18 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.

Our Office is located at Lagos Avenue, East Legon, Accra

Contact: 233 302 528 977

                 233 244 566 092

 Website: www.jsmorlu.com.gh

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