Maximising Analytical AI For Your Small Business

Your business is creating data every day, but most of it never gets a chance to help you. We talk with Michael Redman from Redders IT about analytical AI and why it’s one of the most practical ways for small business owners to improve decisions without turning into a full-time “data person”.

We dig into what analytical AI actually does: spotting patterns in the operational data you already have, from point-of-sale transactions and customer purchase history to inventory movement and staff scheduling. Michael shares the fastest place to start for many SMEs: customer segmentation. When you know who buys most often, who spends the most, and who has drifted away, you can run tighter marketing, smarter offers, and more targeted social media and advertising campaigns.

We also widen the lens to external data sources that can sharpen your forecasts and planning: economic indicators, local demographics, weather, nearby events, competitor signals, and industry benchmarks. From there, we map a realistic path forward, including how a small proof of concept can deliver useful insights in roughly six to ten weeks, and why the gains often come as small improvements across many parts of the business that add up to meaningful ROI.

Finally, we get honest about the risks: data privacy, data security, and the challenge of knowing when AI is returning facts versus confident-sounding interpretations. Michael explains why professional advice can save time and reduce risk, and what to ask any provider about data storage and data management policies. Subscribe for more practical small business tech conversations, share this with a business owner who is AI-curious, and leave a review. What question would you ask your own business data if it could answer honestly?

Transcript

SPEAKER_01 0:11

Hello and welcome to the Canberra Business Podcast. I'm Greg Harford from the Canberra Business Chamber, and today I'm joined by Michael Redman from Reddit's IT, and we're talking artificial intelligence. Michael, welcome to the podcast.

Building A Micro IT Consultancy

SPEAKER_00 0:23

Thank you very much. It's great to be here.

SPEAKER_01 0:25

Now let's start with a little bit about you and Reddit's IT. So, how big is your business and what is it that you do?

SPEAKER_00 0:33

So I'm a I'm a micro business. So at the moment it's just me that um does the day-to-day work. Um so I've you know it's an IT-based business. I've been in IT for 35 years or something rather. I've worked for a lot of large global companies as well as working for small businesses as well. Um I started Reddit's IT in 2019, and the idea was that I can sort of try to come up with ways of you know using my knowledge to try to improve the way businesses work. So, particularly now trying to focus on take what I know from working in large, uh large-scale enterprise businesses and applying that to small business and small to medium enterprises. So giving them the same opportunities that the big players have in the in the business world. And how's that going?

SPEAKER_01 1:26

So you have the business has been running for seven years or thereabouts as we were recording this, so so all going well?

SPEAKER_00 1:32

Yeah, it's it's um it's slow, it's hard, it's like everybody else that's running a business, it's um yeah, it's it's difficult to get a run at things at times. So um so yeah, I'm making slow progress, and um, but it progress is in the right direction, so you know, so I'm taking that as a positive.

SPEAKER_01 1:49

Yeah. And in 35 years in the IT industry, I mean things have changed obviously a lot in that time. Um what what's the what's your biggest sort of learning over that 35 years?

SPEAKER_00 2:02

I think that the probably the biggest learning over that time is that you can never really call yourself an expert while you're in um in the sort of you know IT um worlds because things do change at an incredibly rapid pace, and you know um AI and all that sort of stuff is you know just the latest in a in a whole raft of trends that are changing the way that we work. So um I think that um what the one thing I've learned over that time is the ability to adapt and to um you know look at things with with a different lens and look at things in in new new ways and not get stuck in doing the doing the same thing the same way that it should always have been done.

Analytical AI Explained For Owners

SPEAKER_01 2:41

Yeah. Now if you're in the IT industry, or if you're not in the IT industry, I should say, um, you know, there's a there's a whole lot of noise coming at you around um technology developments, about artificial intelligence. Um, almost every business owner's heard of AI at this point, um, if not everyone on the planet, and and most will have heard about generative AI, but there's also analytical AI out there, which I understand you're doing a bit of work on. Um, what is analytical AI and why should business owners care about it?

SPEAKER_00 3:10

So analytical AI is really around taking the data that is uh created uh as part of your business and learning and looking at the patterns and looking at the detail about how your business works. So, generative AI, which is the one that most people are most familiar with, where you know creating um content for social media and those sorts of things, um, that has one, you know, that that has you know one particular output, whereas analytical AI has a whole range of different outputs, and you can learn so much from the patterns about the uh about what's happening in your business itself.

SPEAKER_01 3:47

So we know that the smaller your business is um the less likely you are to have embraced AI tools generally. Um what do you think is the driver of that?

SPEAKER_00 4:00

Um I think that from um this from a small business point of view, um funding is obviously one thing. So the ability to uh be able to adopt these um technologies and to become well trained and well-versed in how the technologies should be used is sometimes a little bit more costly than a lot of businesses can um can sustain. So there's there's an aspect about it there. There's evidence to prove, too, that um people that have been in business for a long time are less likely to adopt these new ways of working. So um smaller, younger startups um are more likely to take on the technology tools to help them to move forward, whereas a business that's been around for a long time is very much has its way of working and um and is less likely to adopt these new ways of um of running a business.

Finding Value In Business Data

SPEAKER_01 4:52

Now analytical AI is all about sort of using the data sitting in a small business that that um perhaps is not could drive business improvement, but perhaps there's an opportunity there. What kind of data do you think is sitting in most small businesses that they could use to leverage in that way?

SPEAKER_00 5:10

So small businesses will have a whole range of data that um that that is already sort of ready to be used. So um you know most will have some sort of point of sale or transactional data that they can use to um um to start to uh interrogate. They'll have some um hi uh history around customers and how the customers have been spending money uh in their business. Um they'll help they'll have inventory data so that they can you know understand more about um what they've what they've been buying and what they've been selling. Um and then also have other things related to staff, like you know, the the staff schedules and those sorts of things. So there's a whole range of data that is actually ready to be used that may not necessarily um you know be being gaining the most benefit from at the moment. And I think the other thing is that's part of that is that all these pieces of data, although they they exist, using them um uh on their own is one thing, but combining them together is where the real value comes from that data. So the ability to have different pieces of data put together to create new um ways of looking at your business.

SPEAKER_01 6:20

And and and is that true of external data as well? We've talked about the internal data that the small businesses hold, but um, what external data is available for small businesses to combine with their own information to get better insights?

SPEAKER_00 6:32

Yeah, so there's a whole range of different types of external data that you can use. I mean, the obvious ones are things around you know the economic indicators, so you know, consumer confidence indexes, um, you know, inflation rates, those sorts of things. But demographic data about the area in which a business is is located, um, you know, what are the income levels in that area, what types of um what types of you know families or uh singles or whatever are in that are in that area. Um for some businesses weather data is actually crucial. So the ability to get that from an external um uh source is is going to be helpful to help to predict what their future short-term business can be looking like. Um competitor data is obviously another one, industry benchmarks comparing yourself to how you go against other businesses that are that are some similar to yours. Um and then some of the trending stuff that comes from things like social media and sort of and um advertising campaigns and those sorts of things that is another way that you can actually start to understand more about your business more holistically. Um and you know things like events, like you know, if you've got an event nearby, that also helps to um help you plan what you can do more with in with your business.

SPEAKER_01 7:48

So, how do you get started on that though, if you're if you're a small business? Um you know there's there's a lot of data out there. How do you how do you work out what you want to be looking at?

SPEAKER_00 8:01

So there's a I think that there's a couple of things that um that you can do to um start to understand what's the best fit for you. Is and I think the first thing is to really sort of understand where you want to try to take your your journey with data. So you know, do you want to find out more about the you know, about how the how the external factors are affecting your business, or do you want to look inwardly uh more first? Um, and then once you sort of start to identify where you can look to improve, then you can start to identify well what what information will help me to understand that better? Uh, and then you can start to look to look to you know bringing that in information into a way that you can you can then start to leverage it and and get meaningful output from it.

SPEAKER_01 8:47

So, what do you think is one quick win that almost any business could implement to start seeing some results?

SPEAKER_00 8:52

So I think probably the easiest one and the one that is um that is you know most often talked about from a business point of view is to focus on your customer. Um, you know, look at look at your customer in terms of you know your customer base as a whole. Can you segment those customers into different groups or different categories? Um, can you work out which customers are most frequent visitors, which ones were here most recently, which ones spend more money than the others? Uh some of that information is already available through your point of sale systems, um, but you might not necessarily be looking at it in that particular way. Um and then started looking at you know how you can use that information about your customer to find new ways to um to get them to come back, you know, more targeted advertising campaigns or more targeted social media posting, those sorts of things.

SPEAKER_01 9:45

Yeah. Now you mentioned point of sale information. Um if you were a retail business or any business, I guess, with with point of sale equipment, how do you go about accessing that data that's there?

SPEAKER_00 9:57

So point of sale system providers will give you um like a level of reporting. Um the issue with that is it really sort of relies on you to understand the system and to understand what types of things you want to get out of that system. Um but there is already a level of reporting most most often available through those systems. Um to take that one step further, that's when you want to start to sort of customize how you access that data, and then you can you know take that information and as we sort of talked about earlier, combine that with other data sources to start to get more more information about your business as a whole.

SPEAKER_01 10:35

Now, many sort of more experienced small business owners will have relied on on gut feel for a lot of their a lot of their careers and a lot of their their business history. Um, how do you balance data-driven decisions with business intuition?

SPEAKER_00 10:50

So, yeah, m many people have been doing this for a long time and and you know they have they have the experience. Um so in in in that world, data should be treated as a way to, I guess, supplement or to um confirm those those decisions or um confirm that you've got um you've got a way of um looking to move looking to move forward. Um it's particularly useful to have data when you want to try something new. So even though you've been working in a particular way or uh in the same way, but you might want to try um new products or new way of selling or you know, new social media campaigns, then the data can really help to either you know justify or quantify how successful those sorts of thoughts from an experienced business person have been.

SPEAKER_01 11:40

Now, most small businesses, of course, or even medium-sized businesses don't have data scientists in their teams, um, possibly don't have even the sort of the resources to go out and and and contract someone in. How realistic is it for a business to start implementing this?

SPEAKER_00 11:57

So it is it's a lot more um attainable than businesses um will think. Um it's something that um you know you can you can work with with um trusted partners to help to start to extract some of this uh some of this insight from the data that exists within your business. And it doesn't have to be that you invent some entirely magical solution. It can start with simple conversation to sort of discover where you want to go. You might look at doing like a proof of concept um with a with a customer, uh with a partner that's using your customer data and start to understand you know how how easily it is or how easy it is to actually start to get those additional insights. Um but it but yes, it doesn't necessarily have to be a huge undertaking to start to see some benefits realized from your own data.

SPEAKER_01 12:53

And in terms of those benefits, I mean let's talk about sort of return on investment. What kind of revenue increases do you think are realistic for a small business implementing analytical AI to leverage data-driven decision making?

SPEAKER_00 13:06

So there's a lot of research around that's sort of shown that businesses of all size um can achieve um benefits of you know 10 to 20 percent um increase in revenue by using data to supplement the decision-making process for um for a business. And that might be And that's quite significant, right? Especially in retail, for example, when you're operating on a 3% net margin or something. Yeah, that's exactly right. That's exactly right. And um, you know, it's it's not all just um you know, it's not all just a you know a straight um you know uplift, but by looking at all different parts of your business, then you can get small increments here and small increments uh in in each individual aspect. So, you know, optimizing how you're using your inventory, uh, reducing your waste from a hospitality side of things, um, improving your marketing through how you're act accessing your customers, understanding more about customer change, there's a whole range of different ways that you can make small incremental changes and then use the data to sort of help to drive what those changes might look like.

SPEAKER_01 14:09

So if a business owner wanted to start sort of exploring analytical AI, what does the journey typically look like from the first conversation they they have with someone to sort of getting insights they can act on?

SPEAKER_00 14:21

Yeah, so as you sort of mentioned before, I think that you know, starting with a um you know a trusted partner like Reddit's IT, um, that I think that um you know having a conversation around really where would you like to go and what what's realistically achievable. Um, you know, that we want to look at making this work for the business, not so much about an exercise that's going to be uh something that just is not sustainable for that business going forward. Um looking at what data is already available in your systems, like you know, how much information is available and how we could possibly use that in different ways. Uh and then and then, as we sort of mentioned before, looking at it like a proof of concept or you know, using something that's small and relatively quick, like you know, within that sort of you know, six to ten weeks of uh of effort to produce something that might show what your data can potentially give to you.

SPEAKER_01 15:15

So if you were looking ahead two or three years, like what what advantage do you think business owners who take the plunge now with analytical AI will have over those businesses that might wait?

SPEAKER_00 15:27

So it is so adoption is still relatively slow, particularly in Australia. So you know, globally the adoption of AI in small business is is um increasing in in pace, but from an Australian perspective, that is a little bit slower. Um I think over the next two to three years, if there is uh businesses that are looking to work in the AI space now, then they're gonna be ahead of a lot of their competitors because they're um you know they're gonna get the get the jump uh in terms of the way that they that they work going forward. And once they start to realize those gains from the data, then they're gonna be able to accelerate their business. Um so there's some there's some advantages there. And then I think also your business um becomes more attractive to uh you know getting new hires on board because they can see the way that you work is is is keeping up with the with the technology and as well as um you know you can they can see from the outside that your business is starting to move forward. So there's advantages there in terms of the ability for you to hire new staff and and retain those staff when they can see the benefits of working in in a business like that.

SPEAKER_01 16:32

Yeah, and that that's a really interesting piece of insight because of course a lot of the the narrative um about AI is oh it's going to come and steal all our jobs and no one will be no one will be left working. But um you obviously don't think that's true.

SPEAKER_00 16:45

No, I don't. I think that um I think that the the the the best use of AI, particularly around small to medium business, is is to use it to to augment the way that a business runs, not to replace um roles within a business or to replace um you know uh the a big chunk of the business itself, but it's more about using it as a as an asset to uh to improve the way that that that businesses are already running.

SPEAKER_01 17:12

And and at least at an enterprise level, um, you know, a lot of businesses will already have business analysts, data analysts in their business looking at a lot of this sort of stuff. Um but AI, of course, gives them tools to do that more efficiently and easily.

SPEAKER_00 17:26

Yeah, so AI, I think, now particularly for small to medium businesses, gives them the ability to, um, you know, through you know uh chat-based interfaces and those sorts of things, to ask questions about the business and about the data in the business without necessarily understanding the data itself or without understanding how that data is is managed or you know how it's um been stored or anything like that. So it it allows people to have more access to the data more simply.

SPEAKER_01 17:57

Now there's lots of AI tools out there. Um uh you know, not a day goes by when you don't sort of read about something new and shiny on the block. Um, do you recommend that small business owners do this themselves, or do they need to sort of really get some professional advice about how to how to wrangle it?

SPEAKER_00 18:16

I do think that it is well worth getting some professional advice, and I think the main reason for that is, and you know, I think it's been talked about yeah so much in the media, and that's around data privacy and data security. Um, and I think that that is probably the the key thing from a small business uh point of view is that they want to make sure that they're using the tools um in an appropriate way so that their data always remains protected. I think that's the most important part of it. Um, the other thing, too, is the ability to understand when AI is returning fact versus when AI is returning interpretations or hallucinations or anything like that. I think that um that's not always obvious in the first instance. So it's definitely worth um speaking with people that that you know do this for a living.

SPEAKER_01 19:07

Um and if you were looking for a development partner to build AI analytics capability, what sort of things should you be looking for? What questions should we be asking potential providers?

SPEAKER_00 19:16

So I think the you know the security thing again comes up. Number one, I think is really making sure that um the people that you're talking to really understand how the AI tools um work in terms of where that data goes and how that data is being stored and how that data is being maintained by the external systems. Um I think that I think that um organizations that you want to work with should have data management policies that they're prepared to share with you, that they that they can, you know, they can hand on heart say this is how we protect your data. And I think that that's the most important part of that. I think the other thing too is understanding more about the landscape. So when you're talking to um a partner that you that you want to engage with, um, you know, ask them to explain, you know, what is this what does the the solution that they're proposing um actually mean? Like, you know, what what are the tools that they're using and how are they using those tools to get the outcome?

SPEAKER_01 20:17

Excellent, some good advice there. Um Michael Redman from Redis IT, thank you so much for joining me here on the Canberra Business Podcast.

SPEAKER_00 20:25

Thank you very much, Greg. Uh it was great.

Resources And Final Takeaways

SPEAKER_01 20:27

Yeah, great, great having a chat. And of course, there's lots of other tools and information and resources about AI on our website. So um, if you're listening to this and you want more information, um check them out or check out the Reddit's IT website uh as you go. Um thanks very much for listening. I'm Greg Harford from the Canberra Business Chamber, and this has been the Canberra Business Podcast. Uh, don't forget to follow us on your favourite podcast platform for future episodes, and I'll catch you next time.