Advanced digital tech key to improving performance of Irish SMEs. However, firms are struggling with the costs of an increasing spate of cyberattacks.
More than a third (35%) of Irish SMEs have already adopted artificial intelligence in their organisations, with a further 48% planning to roll it out over the year ahead.
That’s according to a new Eir Evo study supported by Microsoft that claims success and optimism are linked with SMEs that implement advanced technologies.
“Our research demonstrates a clear link between the adoption of advanced technologies, such as cloud-based services and AI, and improved business performance among Irish SMEs”
The study also found that cybersecurity remains an area of critical concern with 17% of Irish SMEs experiencing cyberattacks in the past 12 months.
Of those that were attacked, 16% lost between €5,000 and €20,000 with 2% losing more than €20,000.
Benefits of AI for businesses
Key areas where AI is expected to make an impact include Customer Service (32%), IT (27%), and Sales (14%).
AI is also seen as a major time-saving tool for SMEs. According to the research, 32% of respondents believe that AI could reduce administrative tasks by 3-4 hours per week, with an average saving of 3.8 hours per week anticipated across the board.
A further 23% estimate AI could cut over 6 hours of administrative work each week, enabling businesses to focus on higher-value activities. This time-saving benefit could redirect up to €5.1 billion per year into alternative business areas.
“Our research demonstrates a clear link between the adoption of advanced technologies, such as cloud-based services and AI, and improved business performance among Irish SMEs,” said Martin Wells, managing director of Eir Evo.
“It’s encouraging to see that many businesses are embracing supportive technologies, but there are still barriers to overcome, particularly around investment and knowledge. The study sheds light on the vital role AI and technology integration play in the success of SMEs, offering valuable insights for businesses looking to strengthen their digital strategies, and business performance, in the years to come.”
While the benefits of AI are clear, the research also highlights barriers to adoption. A lack of understanding (26%) and investment (23%) were cited as the top obstacles to AI implementation, alongside concerns over security (20%).
Similarly, when it comes to investing in new technology, the upfront cost of investment was a barrier for over half (52%) of respondents, with ongoing costs and uncertainty around the business benefits also cited as key challenges.
“Digital transformation is reshaping industries, making AI and cloud services essential for SMEs to stay competitive,” said Jonathan Eustace, Small Midmarket and Corporate lead at Microsoft.
“Eir Evo’s research highlights how technology can drive efficiencies and enhance business operations and security. However, almost half of organisations feel unprepared for potential cyber attacks. With the rising cyber threat landscape, prioritising cybersecurity is crucial. At Microsoft, we are committed to helping organisations strengthen their security and navigate their AI journey.”
The research also highlights regional differences in technology adoption and digital readiness. Urban businesses, particularly in Dublin and larger counties, are leading in AI implementation, with 52% having already adopted AI compared to just 35% in rural areas. The research also highlights digital skills as a significant concern for many Irish SMEs, with 24% reporting that their employees lack the necessary digital capabilities for future business growth.
This figure rises sharply to 64% in rural areas, where SMEs also face greater challenges around investment costs and understanding new technologies. These findings underscore the need for targeted support to bridge the digital divide and help rural businesses adapt.
The director of the Small Firms Association in Ireland David Broderick emphasised the need for SMEs to focus on upskilling their workforces.
“While many SMEs are progressing in adopting new technologies, there’s still a critical need to develop digital skills within the workforce,” he said.
“To unlock the full potential of these innovations and drive sustained growth, employees must have the right capabilities. Irish SMEs have shown remarkable adaptability, and with continued investment in skilling, they are well-positioned to thrive in an increasingly digital economy. This research highlights the ongoing need for digital training to ensure SMEs remain competitive and resilient in today’s fast-changing landscape.”
Main image at top: Jonathan Eustace, Small Midmarket and Corporate Lead at Microsoft Ireland and Martin Wells, Managing Director at Eir Evo
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