Middle market is confident about AI, despite early-stage adoption challenges

Upcoming RSM survey report provides insight into middle market AI trends

Chatbots. Large language models. Predictive analytics. These and other fast-evolving artificial intelligence (AI) tools are rapidly transforming the way businesses operate. A large majority of middle market organizations are embracing AI, lauding its positive impact and boosting resources around it, research conducted on behalf of RSM shows. At the same time, many of these same firms are only in the early stages of AI adoption, wrestling with implementation and aware they need outside help to position the technology for the greatest strategic benefit to their businesses while also mitigating risk.

Inside the data

Of some 500 executives polled at midsize firms in the United States and Canada, more than three-quarters (78%) said AI is being used across their operations, either formally or informally. Seventy-seven percent said their organizations have adopted generative AI solutions such as ChatGPT and Microsoft Copilot. Primary use cases for AI are broad, ranging from information technology (IT) to data analytics and customer service.

A plurality (41%) of respondents in the survey, conducted from Feb. 26 to March 4, 2024, by Big Village Insights, said their businesses have only partially implemented AI technology. Just one-fifth had achieved full integration.

“Middle market companies are rapidly understanding AI’s potential,” says George Casey, RSM principal. “But many are also finding out that implementation is not always simple. With the technology’s fast pace and complexity, many companies do not have experienced internal resources, and external support and advice are necessary, especially as AI-driven processes become more commonplace and critical for growth.”

Despite nascent stages of AI adoption for most, use of the technology has been surprisingly positive; in fact, 85% of overall respondents indicated the impact of generative AI has exceeded expectations, with benefits including increased efficiency, better customer service and lower costs. Even so, 67% acknowledged that outside help is needed to maximize the benefit of their chosen generative AI solutions.

More than half (54%) of respondents said the technologies have also been more difficult to roll out than expected, citing concerns around employee buy-in and fear over potential job losses, implementation of new processes, additional training and data privacy. Interestingly, among those respondents whose businesses planned to abstain from generative AI use for now, 46% cited barriers around data security, and 44% noted perceived difficulty with operational integration.

Overall, nine in 10 respondents in the survey, which targeted respondents at businesses with annual revenues of $10 million to $1 billion, said their organizations planned to boost their budgets around AI technology and implementation—nearly three-quarters of them (74%) were focusing their dollars squarely on generative AI. The top goals for generative AI use include improved quality control, enhanced customer service, automation of repetitive tasks and increased productivity and creativity.