As small businesses increasingly weave artificial intelligence into their everyday operations, a recent study by the IBM Institute for Business Value reveals how many organizations struggle with AI dependency and control. The findings present critical insights, emphasizing the need for small business owners to navigate a complex landscape of technology and compliance.

The study, which surveyed 1,000 senior executives, highlights that a staggering 68% of respondents find it challenging to meet data residency and sovereignty requirements. This complexity is particularly relevant for small businesses that often operate across regional boundaries and need to adhere to stringent regulations. As AI continues to evolve and embed itself in various aspects of business, understanding and managing these dependencies is vital to maintaining operational integrity.

One pressing concern is that 91% of those surveyed do not fully grasp their organization’s dependencies across different AI vendors, models, and infrastructure. For small business owners, this lack of awareness can pose a risk, especially when navigating vendor outages or unexpected changes in the market, such as price hikes or service restrictions. To put it into perspective, 81% of executives reported a seven-day vendor outage would lead to severe disruption, effectively halting operations—a scenario that small businesses cannot afford to encounter.

Ana Paula Assis, Senior Vice President at IBM, notes, “AI has introduced new forms of dependency that evolve faster than traditional governance, procurement, or technology cycles were designed to handle. That is why AI sovereignty has become one of the most defining leadership issues of this moment.” For small businesses, this means being proactive in understanding their AI systems and the vendors they rely on, as any loss of control can lead to economic impact, compliance challenges, or operational disruption.

The potential for AI-driven disruptions is alarming. Executives reported an average of six AI-related disruptions over the past two years, mainly attributed to vendor issues. However, small business owners can mitigate risks by investing in AI systems that are resilient and adaptable. In fact, organizations with advanced AI control capabilities protect 55% more operating profit from these disruptions compared to their less adaptable peers. Regrettably, only 7% of the organizations surveyed operate at this advanced level, underscoring a notable gap in the market.

Most respondents (73%) reported that their AI environments are intentionally multi-vendor, but the reality often doesn’t align with this strategy. Internal decisions—such as those driven by different business units or geographic necessities—often dictate vendor diversity rather than a cohesive strategy. This can lead to scenarios where businesses are caught in control or knowledge gaps, making it harder to pivot in response to market changes.

For small business owners, the study indicates an opportunity. A noteworthy 72% of executives would accept a 20% cost increase to maintain AI vendors if it improved strategic flexibility. This willingness reflects an understanding that investing in the right AI capabilities is essential to future-proofing their operations.

While the insights from the IBM study underscore the challenges small business owners face in harnessing the power of AI, they also shed light on the roadmap toward overcoming these hurdles. Adopting flexible and resilient AI systems can fuel growth while shielding businesses from the unpredictable nature of vendor dependencies.

In a landscape where AI’s influence grows stronger, small businesses must prioritize understanding their technology stack and enhancing their adaptability. As the stakes continue to rise, those who act decisively to bolster their AI governance will be better positioned to benefit from the efficiency and innovation that this technology promises.

For a comprehensive view of the findings, visit the full study at IBM’s website. As small business owners explore strategies to leverage AI, these insights offer a crucial lens through which to assess risks and opportunities in this transformative era.

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This article, “Study Reveals 91% of Executives Lack Clarity on AI Dependencies” was first published on Small Business Trends