How Family Businesses Are Using AI to Stay Competitive

More family businesses are embracing artificial intelligence as they strive to compete and grow, according to a new report by Deloitte.

In a survey of more than 1,500 family businesses in 35 countries, 86% reported actively or selectively using AI across their organizations. Many now view digital transformation as essential for “adaptability and resilience,” according to the report.

“Family businesses are in a period of transition—one where they are making real progress but still navigating the shift from incremental adoption to enterprise-wide digital maturity,” Dr. Rebecca Gooch, Deloitte Private Global Head of Insights, Deloitte Global, said in a statement.

Many family business leaders say they’re finding value in AI and other technology, but still face some challenges.

How family businesses are using and finding value in AI

AI has become a core technology for family businesses. More than 40% use AI in many areas of their business, 42% use it for “select business functions,” and just 2% say they don’t use AI at all.

Family businesses use AI for multiple functions, including improving process efficiency (40%), risk management (39%), customer relationship management (39%), and customer experience and engagement (38%).

More than half of the companies surveyed said they’re well invested in the technology needed to support their businesses, now and in the future. But 48% said their investment levels “fall short,” and 37% said they’re at a “moderate stage of overall digital investment.”

Overall, family businesses reported satisfaction with their technology investments, with more than 60% saying they’re delivering benefits, including increased productivity, efficiency, competitiveness, risk management, and decision-making.

Still, many family businesses worry about keeping up with evolving technology—51% cite “inadequate adoption of technology” as a moderate or high risk to their growth over the next year or two.

Digital transformation can be overwhelming for small and family businesses. Working with outside experts can help, especially when your business lacks the expertise.

How to drive value from technology investments

“The choices leaders make today around AI and digital transformation can influence not just immediate performance, but the kind of business they ultimately hand over to the next generation,” Gooch says.

These tips can help family businesses embrace digital transformation and bring value to their organizations, according to the report:

Align technology investments with business objectives. Start with a goal in mind, such as increasing automation or improving customer service, rather than adding technology just for the sake of it. Let goals drive digital transformation strategies to provide the most value.
Focus on “enterprise integration.” AI and other technologies can streamline processes, such as customer service, but family businesses must go all-in by deploying them across specific business practices to derive the most value.
Emphasize governance and risk management. Family business leaders view technology as a way to mitigate risk. But it’s crucial to integrate governance strategies into digital transformation, including intellectual property, security risk, customer trust, and other ethical concerns, according to the U.S. Small Business Administration.
Train your team. Invest in digital talent and upskill employees on AI and other technology. Equipping employees to use and excel at these technologies will give family businesses an edge, according to the World Economic Forum.
Bring in experts. Digital transformation can be overwhelming for small and family businesses. Working with outside experts can help, especially when your business lacks the expertise. These experts have the knowledge to help companies embrace AI to meet their goals and drive growth.

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