By Ankur Vij, Senior Vice President, Business Growth at Techjockey.com
Small and medium-sized businesses (SMEs) are the backbone of the Indian economy, contributing almost 30% to the national GDP and employing more than 110 million individuals. With the necessity for digital agility increasing, SMEs are turning towards leveraging business software for productivity, compliance, and expansion. Yet one recurring issue complicates this endeavor, the sheer complexity in sourcing the proper software from among numerous choices.
AI is now starting to do just that. As a virtual consultant or software “matchmaker,” artificial intelligence is enabling SMEs to find and implement fit-for-purpose solutions with unprecedented speed and accuracy. And in the process, it is helping to alleviate one of the least glamorous but most critical issues in digital transformation, decision fatigue.
The Traditional Search Model is Broken
Traditionally, SMEs used to depend upon word of mouth: recommendations from peers, reviews on marketplaces, or an open Google search. However, since there are now thousands of SaaS products available in the market, this process is likely to result in sub-optimal decisions.
As per a 2023 industry survey, 72% of SMEs are still overwhelmed by the process of choosing software, while 47% have bought software that was too complicated or too limited for their requirements. The consequence? Time wasted, negative ROI, and diminished belief in adopting technology.
AI Brings Context and Clarity
AI shifts the paradigm by comparing real-time business metrics, like industry, size, workflows, compliance requirements, and digital maturity, to suggest software that fits. These suggestions are not made in relation to surface keywords but to business intent.
If an SME wants to “minimise manual inventory errors,” an AI-driven engine can suggest a mobile-first POS solution with predictive restocking, GST integration, and multilingual dashboards, much more sophisticated than a generic inventory application.
From Search to Smart Guidance
Natural Language Processing (NLP) is also making such systems more conversational. SMEs no longer need to explain their requirements in IT terminology. AI-driven assistants can understand natural-language requests such as, “I need improved visibility into cash flow,” and offer focused tools including dashboard-based cash flow tracking, payment reminders, and vendor reconciliation.
This “smart advice” dramatically cuts the amount of time SMEs expend searching, experimenting, and comparing alternatives, a valuable benefit for organisations without an in-house IT department.
Establishing Trust Through Data-Driven Insight
Perhaps the most overlooked benefit of AI in this area is how it introduces transparency and trust into software assessment. By merging user reviews, churn rates, support response times, and usage data, AI products can establish a more realistic image of how a product performs in actual usage.
This data-first strategy allows SMEs to look beyond and concentrate on value that lasts. It makes the playing field level, enabling small businesses to make decisions like an enterprise CIO, just at a quicker pace.
Scaling Discovery Through Automation
Top e-commerce platforms and digital marketplaces are already infusing AI-driven advisors that mimic a product expert’s ability to find the right fit. They interact with users through chatbot interfaces, pose questions to clarify, and provide handpicked shortlists, much like how a leading online retailer uses AI to personalise product recommendations and simplify choices for millions of users daily, but tailored for software. Such automation is essential in a nation like India, where 90% of MSMEs lack full-time tech teams and require scalable digital advice specific to local business situations.
Challenges: Data Gaps and Privacy Issues
Of course, AI accuracy will be only as good as the data it is trained on. For niche or local use cases, such as an agro-SME in Bihar or a textile exporter in Tirupur, there might not yet be sufficient feedback loops to enable flawless recommendations. There are also genuine concerns about business data usage and storage by AI platforms while performing the matchmaking service.
These are essential safeguards to incorporate into India’s evolving digital governance framework, particularly as technology becomes increasingly integrated into business decision-making.
The Road Ahead
While the restrictions are in place, the direction is clear. AI is not merely optimising backend processes; it is rewriting how SMEs select the digital tools that drive their enterprise. By doing so, it is democratising enterprise-grade decision-making for firms that have traditionally been denied access to bespoke tech guidance.
For India’s 60+ million SMEs riding rapid digitisation, AI-driven software discovery is more than a convenience; its promise is confidence, precision, and velocity. In today’s increasingly competitive marketplace, that may make all the difference.