MNP’s Wendy Gnenz and Colin Wenngatz recently discussed this subject on the AI for SMBs Series podcast by CanadianSME. This article provides a comparative review of digital transformation across sectors, grounded in findings from the 2025 MNP Municipal Report.

Artificial intelligence (AI) is transforming how businesses in every sector make decisions and deliver value. However, Canadian small- to medium-sized businesses (SMBs) are facing specific challenges to achieving their AI goals. According to the 2025 MNP Municipal Report, local governments face similar challenges — and understanding what steps they are taking to address these issues can help SMBs leverage AI successfully.

MNP’s Wendy Gnenz and Colin Wenngatz recently discussed this subject on the AI for SMBs Series podcast by CanadianSME. This article distills their insights into actionable strategies for small business owners, entrepreneurs, and municipal leaders.

A strong data foundation is crucial to gain results from AI that improve decision-making, drive operational efficiencies, and increase productivity. Local governments and SMBs face strikingly similar challenges and opportunities when it comes to data, including:

Challenges

• Limited resources: SMBs and local governments often lack the staff, budget, and infrastructure to manage and analyze data efficiently.
• Siloed data systems: This makes it difficult to obtain a unified view of operations or customers/citizens.
• Stakeholder pressure: SMBs and local governments both need to follow strict privacy legislation and meet customer/citizen expectations for data use. 

Opportunities

• Understand your data: SMBs and local governments can use data to improve decision-making, optimize operations, and personalize services.
• Automation: Leveraging AI can help automate routine tasks and free up existing time to focus on more value-added activities.
• Collaboration: SMBs and local governments can collaborate with external partners such as technology vendors, consultants, or academic institutions to accelerate innovation.

Local governments are exploring how to overcome the challenges related to implementing AI in several different ways, according to the 2025 MNP Municipal Report. Canadian SMBs can also benefit from adopting this approach, which involves:

Treating data as a strategic asset

Data is no longer a byproduct of doing business, it is a tool for strategic growth. Your SMB must shift its mindset from simply storing data to exploring how to leverage that data to make informed decisions in a competitive business landscape.

This approach involves data democratization — or getting the right data to the right people. This helps SMBs and local governments make evidence-based decisions, gain a deeper understanding of customer/citizen needs, and increase operational efficiencies.

Ensuring quality data

AI models learn from data — and poor data drives poor outcomes. Providing incomplete, inaccurate, or biased data causes the AI to miss relationships, identify false patterns, and deliver unreliable or unethical results. 

Local governments are taking the following steps to ensure high data quality by:

• Establishing strong data governance and ownership
• Assigning accountability for data stewardship
• Developing clear metrics for accuracy, completeness, and timeliness
• Investing in data profiling and cleansing tools
• Standardizing data collection and validation
• Fostering collaboration and feedback loops among domain experts, data engineers, and business users

Identifying practical use cases for AI

Local governments often lack the budget to support a full AI transformation. However, leveraging generative AI such as Microsoft Copilot and ChatGPT for specific use cases are helping local governments save costs and increase productivity.

SMBs can also benefit from identifying practical use cases for generative AI, including:

• Task automation: Generative AI can automate routine tasks such as emails, job postings, sales documents, proposals, and blog/social media posts.
• Meeting summaries: Create informative summaries for documents and meetings.
• Product development: Generative AI can help you brainstorm new product ideas.
• Customer service: Develop chatbots with advanced capabilities to enhance customer interactions.
• Analysis and documentation: Generative AI can provide retrieval-augmented generation (RAG) for contract lease analysis and safety documentation.
• Design support: Quick ideation for design, including mock-ups, logos, and social graphics.

Data and AI are no longer just for large enterprises — and act as equalizers for SMBs. These tools are readily accessible and empower your SMB to improve its financial metrics and increase operational efficiency. It can also boost employee recruitment and retention through AI-driven automation and value-added work.

However, Canadian SMBs need to take the right steps to gain the benefits from leveraging AI. Local governments have achieved considerable success by:

• Building a strong data foundation, composed of organization, structure, and governance.
• Using data platforms for insights and decision-making.
• Identifying high-value use cases, or proofs of value, for AI.
• Developing a long-term roadmap to guide AI growth and implementation.

AI action plan for SMBs

The insights from the 2025 MNP Municipal Report enabled our advisors to identify several key factors that supported local governments to achieve a successful AI implementation. SMBs can follow a similar approach to leverage AI effectively by:

• Assigning a data leader: Select someone to be accountable for your organization’s data quality and strategy.
• Choosing a use case: Identify a business area where data or AI can deliver clear and measurable value.
• Launching a pilot: Launch a small-scale project, measure your results, and gather feedback.
• Building on success: Use insights from your pilot to support broader data and AI initiatives.
• Fostering collaboration: Encourage cross-functional teams to contribute ideas and expertise.
• Investing in training: Provide the resources and training your employees need to become comfortable with new tools and processes.