Why Small and Medium-Sized Businesses Need an AI Policy
If there’s one certainty in the world of AI, it’s that it is here to stay.
Many businesses are taking advantage of AI in various ways – that’s one of the unique insights we have with our diverse client base, being able to see what is working where.
This certainty, along with future AI models becoming more embedded in everyday operations, raises a series of questions that businesses should answer in the form of a strategy and policy.
As every business is different, so is each strategy. However, there are similarities many businesses share that can be enforced with the right AI policies.
The first time a client asked us for an AI policy was due to concerns about sensitive company data being exposed to future large language models. An employee might mistakenly enter commercially sensitive or intellectual property that a future AI model might use for training.
Some of these concerns have been mitigated with the inception of Microsoft Copilot and the ability to enclose all data within the Microsoft 365 tenant.
However, a relevant AI policy should not be skipped, as there are other scenarios where it becomes essential.
1. Misuse of AI by Staff: Employees may use AI tools inappropriately, such as automating hiring decisions without oversight, leading to biased outcomes, or entering sensitive data into public AI platforms, risking data breaches.
2. Accuracy and Reliability of AI Outputs: AI systems can produce inaccurate or biased results. Relying on these outputs without verification can lead to poor decision-making and potential legal liabilities.
Examples of Inappropriate AI Use
Automated Decision-Making: Using AI to make hiring or credit approval decisions without human review can result in discrimination and regulatory violations.
Confidential Data Sharing: Employees might inadvertently input sensitive business data into AI tools not designed for secure handling of such information. A recent example involves shadow IT, where a client’s staff member signed up for an AI note-taker without the IT team’s approval. The note-taker started joining and taking notes in many internal meetings, storing data in a location that violated the client’s security policy.
Content Creation: Generating marketing content or customer communications without fact-checking can spread misinformation.
Customer Interactions: Allowing AI to handle complex customer service issues unsupervised can frustrate customers if the AI fails to address their needs properly.
Pros and Cons of an AI Policy
Guideline and Framework: An AI policy clarifies how AI should be used, helping employees use these tools effectively and ethically.
Management of Data: Setting up rules for data handling ensures that private data is kept safe and privacy laws are followed.
Checking for Quality: Establishing methods to verify AI results and continuously monitor performance helps maintain accuracy and reliability.
Developing an AI Policy
1. Define Purpose and Scope: An effective AI policy should define its purpose and scope, outline acceptable use cases, and detail roles and responsibilities.
2. Staff Sign-Off: Ensure staff read, understand, and sign the policy. This may need to be part of the IT induction for new staff and include training for existing staff members.
3. Regular Review: Schedule regular reviews of the policy. The world of AI is changing rapidly, and as more software tools are powered by AI, it’s crucial to review the tools your business uses and stay updated on new market offerings.
AI Policy Template
To assist you in developing your AI policy, we offer a comprehensive AI Policy Template. This template is designed to help you quickly establish guidelines and frameworks tailored to your business needs. You can customise it to ensure it aligns with your specific requirements and industry standards.