How to Build an AI Strategy for Your SME

Every business needs an AI strategy. Not a 100-page document that sits on a shelf, but a clear plan that guides decisions and drives action.

This guide walks you through building an AI strategy that fits your SME - practical, focused, and achievable without a consulting firm.

What is an AI Strategy (And What It Is Not)

An AI strategy answers three questions:

Where will AI create value for our business?
What do we need to make it happen?
How do we get there step by step?

Strategy is Not Technology

Many AI strategies fail because they start with technology ("We need to use GPT-4!") rather than business outcomes ("We need to reduce customer response time by 50%"). Always start with the problem you are solving.

What a Good AI Strategy Includes

Clear business objectives tied to AI
Prioritised list of AI opportunities
Assessment of current capabilities
Roadmap with milestones
Resource requirements
Risk considerations
Success metrics

What It Does Not Need

Exhaustive technical specifications
Guaranteed ROI calculations
Every possible use case
Perfect information
External consultants

The Strategy Development Process

Phase 1: Business Alignment (Week 1)

Step 1: Start with Business Strategy

Your AI strategy must serve your business strategy. Before thinking about AI, clarify:

What are our top 3 business priorities this year?
Where are we losing money or time?
What do customers complain about most?
Where are competitors pulling ahead?
What would make the biggest difference to growth?

Exercise: List your top 5 business challenges. These will guide your AI priorities.

Business Challenge	Impact if Solved	Current Approach
1.
2.
3.
4.
5.

Step 2: Define Your AI Ambition

Not every company needs to be an AI leader. Choose your position:

Conservative: Use proven AI tools to improve efficiency

Lower risk, faster implementation
Following what others have tested
Focus on off-the-shelf solutions

Moderate: Strategically adopt AI where it creates clear advantage

Balanced risk and reward
Mix of proven and emerging solutions
Some customisation for your context

Aggressive: Use AI as a competitive differentiator

Higher risk, higher potential reward
Early adoption of new capabilities
Custom solutions and innovation

For most SMEs, moderate is the right starting point.

Phase 2: Opportunity Identification (Week 2)

Step 3: Map Your Processes

Walk through your major business processes and identify:

Repetitive manual tasks
Information bottlenecks
Quality inconsistencies
Customer pain points
Staff frustration points

Process Mapping Template:

Process	Time/Week	Pain Points	AI Opportunity?
Customer support
Sales outreach
Content creation
Data entry
Reporting

Step 4: Generate Use Case Ideas

For each opportunity area, brainstorm potential AI applications:

Questions to Generate Ideas:

Could AI handle the routine parts of this process?
Could AI help people do this faster or better?
Could AI make better predictions here?
Could AI personalise this at scale?
Could AI extract insights from this data?

Aim for 15-20 initial ideas. Quality filtering comes next.

Step 5: Score and Prioritise

Rate each use case on two dimensions:

Value Score (1-5):

Revenue impact
Cost savings
Customer experience improvement
Competitive advantage
Strategic alignment

Feasibility Score (1-5):

Data availability
Technical complexity
Integration difficulty
Change management needs
Available budget/resources

Priority Matrix:

	Low Feasibility	High Feasibility
High Value	Plan Carefully	Do First
Low Value	Avoid	Quick Wins

Phase 3: Capability Assessment (Week 3)

Step 6: Assess Your Foundation

Before implementing AI, understand your current state across six dimensions:

Data: Is your data accessible, clean, and organised?
Technology: Do you have the infrastructure to support AI?
Skills: Do your people know how to use AI effectively?
Processes: Are your workflows ready for AI integration?
Governance: Do you have policies for responsible AI use?
Culture: Is your organisation open to AI adoption?

For each, rate yourself: Ready / Needs Work / Major Gap

Step 7: Identify Critical Gaps

Based on your assessment, identify what must be fixed before AI can succeed:

Showstopper Gaps (Must fix first):

Data is inaccessible or poor quality
No budget allocated
Leadership is not supportive
Regulatory blockers

Important Gaps (Address in parallel):

Limited technical skills
Change resistance
Missing policies
Integration challenges

Nice to Have (Fix as you go):

Perfect data quality
Advanced analytics
Full automation
Comprehensive training

Phase 4: Roadmap Creation (Week 4)

Step 8: Select Pilot Projects

Choose 2-3 use cases for initial pilots. Good pilots:

Have clear, measurable outcomes
Can show results in 30-60 days
Have a business champion
Use available data
Have limited dependencies
Represent minimal risk if they fail

Pilot Selection Worksheet:

Use Case	Champion	Success Metric	Timeline	Risk Level

Step 9: Build the Roadmap

Structure your AI journey in phases:

Phase 1: Foundation (Months 1-3)

Establish governance basics
Deploy pilot projects
Build initial skills
Quick wins to build momentum

Phase 2: Scale (Months 4-6)

Expand successful pilots
Add next wave of use cases
Develop deeper capabilities
Create operational processes

Phase 3: Optimise (Months 7-12)

Refine and improve solutions
Tackle more complex use cases
Build advanced capabilities
Measure and demonstrate ROI

Step 10: Define Success Metrics

For each phase and use case, define:

Leading indicators: Early signs of progress (adoption rates, user feedback)
Lagging indicators: Ultimate outcomes (time saved, revenue impact, cost reduction)

Metric Framework:

Metric	Baseline	Target	How Measured

The One-Page AI Strategy

Summarise your strategy on a single page:

# [Company Name] AI Strategy

## Our AI Ambition
[One sentence describing your approach]

## Business Objectives
1. [Objective 1]
2. [Objective 2]
3. [Objective 3]

## Priority Use Cases
1. [Use Case 1] - [Expected Impact]
2. [Use Case 2] - [Expected Impact]
3. [Use Case 3] - [Expected Impact]

## Foundation Work
- [Gap to address 1]
- [Gap to address 2]

## 12-Month Roadmap
- Q1: [Key milestones]
- Q2: [Key milestones]
- Q3: [Key milestones]
- Q4: [Key milestones]

## Success Metrics
- [Metric 1]: [Target]
- [Metric 2]: [Target]

## Investment Required
- [Budget/resource summary]

## Next Steps
1. [Immediate action]
2. [Immediate action]
3. [Immediate action]

Strategy Governance

Monthly Strategy Review

Each month, review:

Progress against milestones
Metric performance
Resource utilisation
Emerging challenges
New opportunities
Course corrections needed

Quarterly Strategy Refresh

Each quarter:

Assess market/technology changes
Review competitive landscape
Adjust priorities if needed
Update roadmap
Refresh success metrics

Annual Strategy Overhaul

Annually:

Full strategy review
Re-assess business alignment
Update capability assessment
Refresh opportunity pipeline
Set next year's roadmap

Common Strategy Mistakes

Mistake 1: Boiling the Ocean Trying to do everything at once. Start with 2-3 focused pilots.

Mistake 2: Technology First Picking AI tools before understanding business needs. Start with problems.

Mistake 3: Ignoring Change Management Focusing on technology and forgetting people. AI adoption is a people challenge.

Mistake 4: No Executive Sponsor AI projects without senior support rarely succeed. Get leadership buy-in first.

Mistake 5: Unrealistic Expectations Expecting transformational results in weeks. AI takes time to deliver value.

Mistake 6: Set and Forget Treating strategy as a one-time exercise. It needs continuous refinement.

SME-Specific Considerations

Advantages SMEs Have

Faster decision-making
Less bureaucracy
Easier cross-functional coordination
Closer customer relationships
More agile implementation

Challenges SMEs Face

Limited budget
Fewer specialised skills
Less data volume
Competing priorities
Higher relative risk

SME Strategy Tips

Focus on proven, off-the-shelf solutions first
Partner with vendors who serve SMEs
Join communities to learn from peers
Start smaller than you think necessary
Build momentum with quick wins
Invest in skills development

Next Steps

Block time for strategy development (4-8 hours over 2-3 weeks)
Gather your team (leadership + key department heads)
Complete the exercises in this guide
Draft your one-page strategy
Get leadership sign-off
Select and launch pilots

Ready to assess your strategic readiness? AI Strategy is one of six pillars in our AI Readiness Assessment. Take the free assessment to see where you stand and get personalised recommendations.