AI and Operating Models: What It Means for Small to Medium-Sized Organisations
Ken Brophy
Artificial Intelligence is no longer exclusive to large businesses with significant R&D budgets. Today, small to medium-sized organisations (SMEs) are embracing AI to transform how they work – from streamlining operations to improving decision-making and customer engagement. As AI tools become more accessible and user-friendly, they are directly influencing how SMEs design their operating models.
Given that most organisations in New Zealand are SMEs, here are three emerging trends that capture how AI is reshaping organisational design in this space.
1. Leaner Structures Powered by Automation
SMEs are often constrained by headcount, budget, and time – making operational efficiency a top priority. AI is enabling these organisations to automate routine tasks such as data entry, customer support, scheduling, and basic finance or HR processes.
As a result, we’re starting to see a move towards leaner organisational structures, supported by AI-powered systems. This shift is not about removing people, but rather refocusing limited human capital on value-creating activities.
For example, finance and administration functions are integrating AI into accounting or compliance reporting, reducing the need for extensive back-office teams. Chatbots and virtual assistants now handle first-line customer enquiries, freeing up staff for higher-value interactions.
From a design perspective, SMEs are reconsidering traditional roles and job descriptions – merging, evolving, or eliminating functions that can now be supported by AI. The result is flatter hierarchies, smaller teams, and more cross-functional work.
2. Embedded AI Roles Without Formal AI Teams
Unlike larger entities, SMEs rarely have dedicated AI departments or data science teams. Instead, AI is being embedded into everyday tools – i.e. CRMs, ERPs, marketing platforms, and productivity software – allowing non-specialists to leverage AI capabilities in their roles. This creates a design shift: rather than building new departments, SMEs are embedding AI responsibilities into existing roles.
For example, marketers are using generative AI tools to produce content, analyse campaign performance, and personalise customer outreach – without needing data scientists or developers. Similarly, sales teams use AI-enabled CRMs that prioritise leads, suggest next actions, or generate forecasts.
The implication for organisational design is that capability development becomes more distributed. Training and upskilling programmes are focusing on making employees “AI-aware” or “AI-augmented”, rather than creating centralised AI teams. Some SMEs are also appointing informal “AI champions” in different teams to drive adoption and experimentation at the grassroots level.
3. Cross-Functional, Project-Based Work Enabled by AI Insights
AI is enhancing visibility into workflows, customer behaviour, and operational bottlenecks – allowing SMEs to respond more quickly to changing conditions. This is encouraging a shift towards project-based work models, where teams form and dissolve dynamically around business priorities.
With AI providing real-time data and predictive insights, decision-making is becoming faster and more decentralised. Leaders no longer need multiple layers of approval to act on trends or opportunities. This agility is reshaping organisational design towards teams that are far more focused on working end-to-end, not solely within ‘their department’.
Operating models are evolving to prioritise collaboration, adaptability, and time-to-value.
The outcome for SME's?
For SMEs, the rise of AI offers a unique opportunity: to modernise without the complexity or legacy challenges of larger enterprises. By redesigning their operating models around automation, embedded capability, and agility, smaller organisations can punch above their weight – delivering faster, smarter, and even more personalised value to customers.
Importantly, success doesn’t depend on building an ‘AI lab’ or hiring data scientists. It requires rethinking how people, technology, and structure come together – and empowering every employee to work alongside intelligent tools. AI might be very flash ‘number 8 wire’, but it’s also just the next tool supporting New Zealand’s ability to innovate and do things differently.
