Artificial intelligence (AI) is transforming the way small businesses work, making everyday tasks faster and easier. Like any powerful tool, AI comes with some risks. From security breaches to compliance issues, small business owners need to be aware of the risks.
Common AI Platforms Used By Small Business
Small businesses use AI in different ways, depending on their needs. Here are the most common types:
- Generative AI – Tools like OpenAI’s ChatGPT and Microsoft 365 Copilot help with writing, answering customer queries, and creating content.
- Machine Learning AI – Used for fraud detection, sales forecasting, and customer analysis.
- Automation AI – Helps with repetitive tasks like invoicing, payroll, and appointment scheduling.
- Conversational AI – Chatbots and virtual assistants that handle customer enquiries and streamline service.
Each type has its advantage, but choosing the wrong tool or misusing AI can create serious challenges.
OpenAI and Microsoft 365 Copilot: What is the difference?
Two major AI tools used by businesses are OpenAI’s ChatGPT and Microsoft 365 Copilot. While both offer valuable automation features, they differ significantly in security, integration, and compliance.
|
Feature |
OpenAI |
Microsoft 365 Copilot |
|
Focus |
General-purpose AI for text generation and understanding (GPT models) |
AI-driven productivity tools integrated within Microsoft 365 (Word, Excel, Outlook) allowing for a more personalised analysis and insights based on existing Microsoft 365 data. |
|
Core Capabilities |
Conversation AI, text generation, problem-solving, content creation, and research |
Automating tasks like drafting documents, summarising emails, generating reports, and analysing data |
|
Integration |
Standalone or API-based |
Integrated with Microsoft 365 |
|
Data Security |
Processes data externally, policies vary |
Adheres to Microsoft’s enterprise-grade |
|
Risks |
Data ownership concerns, security gaps |
Requires Microsoft 365 subscription, may limit customisation |
|
Best For |
Content generation, research |
Business operations, document management, privacy, security, handling of sensitive information |
Understanding these differences helps small businesses choose the right tool based on their needs, whether its content creation or seamless integration with existing tools.
Security and Data Privacy Risks
AI tools need access to the data to function, which means businesses must be careful about security. Risks which include:
- Data leaks – If an AI system is not properly secured, sensitive customer or financial data could be exposed
- Unauthorised access – AI tools that connect to business systems can become targets for hackers.
- Data ownership challenges – Some AI providers claim ownership of the data processed through their platforms, which could create legal complications.
For small businesses, a data breach can lead to lost customers, financial penalties, and reputational damage.
Compliance Failures and Regulatory Issues
Small businesses operating in regulated industries, such as finance or healthcare, must comply with strict regulations. If AI tools don’t meet regulatory standards, businesses risk fines, lawsuits, or even losing their licenses. In Australia, businesses must ensure AI systems comply with the Privacy Act and data protection laws. If an AI system mishandles customer data or generates incorrect information, businesses could face harsh penalties.
Case Study: A Bookkeeper’s AI Mistake
A small bookkeeping business in Sydney, adopted an AI-powered invoicing system without expert guidance. The system misclassified transactions, leading to incorrect reporting and unexpected fines. Clients lost trust in the firm, the business had to manually review months of financial records.
What went wrong?
- The business relied on AI without checking the accuracy of the results
- The AI tool lacked industry-specific compliance checks
- There were no safeguards to catch errors before they caused problems
- The business did not engage trained AI experts to ensure a smooth, secure implementation
The Benefits of Using AI Tools
When used correctly, AI can help small businesses by:
- Reducing manual work and automating routine tasks
- Improving decision-making with data-driven insights
- Enhancing customer experience with AI-powered chatbots
- Assisting with financial tasks like bookkeeping and invoicing
However, using AI incorrectly can lead to the loss of control over sensitive data with some AI tools processing and storing data externally, raising security concerns. Keep in mind, that all AI systems that are implemented must follow Australian privacy and security laws.
How To Implement AI Securely
To avoid AI risks, small businesses should follow these best practices:
- Assess business needs – identify automation opportunities while ensuring security and compliance.
- Choose secure AI tools - Select platforms with strong data protection policies
- Partner with trusted AI providers - Work with providers that offer built-in cyber security safeguards.
- Develop implementation guidelines - Establish best practices to minimise AI-related risk.
- Monitor AI performance - regularly review AI outputs to ensure accuracy and compliance.
- Use AI as a support tool, not a replacement - AI can assist with tasks, but human oversight is critical.
Why Would A Small Business Choose Microsoft 365 Copilot
Microsoft 365 Copilot is a strong choice for small businesses due to its seamless integration with Microsoft 365, strong security standards, and compliance measures. Unlike some AI tools that store and process data externally, Microsoft ensures business data remains protected under Australian Data Laws.
- Seamless integration – works effortless within word, excel, outlook, and teams without disrupting workflows.
- Enhanced security and compliance – adheres to strict data privacy policies, making it a safer choice for industries with strict requirements.
- Time-saving automation – automates repetitive tasks like email drafting, report generation, and data analysis.
- Customisable AI implementation – Allows businesses to customise AI functions to their specific needs and industry regulations.
- Smarter Insights – Microsoft 365 Copilot uses your business data to provide valuable insights, enhance decision-making, and streamline operations. It can even write an email using brand’s voice and personal tone.
Implementing Microsoft 365 Copilot With A TSSP
A Technology Services Solutions Provider or TSSP can help small businesses set up and manage Microsoft 365 Copilot without requiring in-house IT expertise. Working with a TSSP provides:
- Expert Guidance
- Seamless and Stress-Free Setup
- Data Security and Compliance
- Ongoing Support and Monitoring
- Cost Effective Solutions
Why Choose Harvey Norman Technology for Business
Harvey Norman Technology for Business helps small businesses adopt AI is implemented safely and effectively. Many AI-related failures stem from poor security measures or misalignment with business needs. We can help mitigate these risks by:
- Assessing business needs – Identifying automation opportunities while ensuring security and compliance.
- Recommending secure AI tools – Choosing AI solutions with strong data protection policies
- Partnering with trusted AI providers – Implementing AI solutions with built-in cyber security safeguards
- Implementing AI with cyber security safeguards – ensuring businesses stay protected
- Providing ongoing support – monitoring ai performance and keeping businesses
- Trusted solutions provider – Helps small businesses adopt solutions safely and effectively, ensuring secure implementation, compliance, and ongoing support.
AI can be a huge asset for small businesses, streamlining operations and improving efficiency. However, without proper planning, it can also create security risks, compliance issues, and unexpected costs. By staying informed and using a Technology Services Solutions Provider, like Harvey Norman Technology for Business, small businesses can harness AI’s benefits without costly mistakes.
Before adopting AI ask: Does this tool align with my business needs, security standards, and legal obligations? If the answer isn’t clear, contact Harvey Norman Technology for Business and we will assist you in choosing the right solution for your business.
