The Role Of AI-Powered Decision Support Systems In Enhancing Strategic Agility: A Study On SME Competitiveness In Dynamic Markets

Abstract

Objective: This study aimed to explore the impact of AI-powered Decision Support Systems (DSS) on the strategic agility, operational efficiency, and competitiveness of Small and Medium Enterprises (SMEs).

Method: We use a mixed-methods design. A cross-sectional survey of 200 SME managers from manufacturing, retail, finance, and technology is paired with five in-depth case studies of firms that have already integrated AI-DSS. The survey tests our relationships quantitatively, while the cases show how the effects play out on the ground.

Results: Firms that adopt AI-DSS tend to be more agile, better at sensing opportunities and risks, seizing them at the right time, and reconfiguring processes when needed. Crucially, these gains flow through two channels: higher decision quality and greater operational efficiency. The benefits are stronger in fast-changing markets and in firms with higher digital maturity. Results from the survey and the cases converge on this story.

Conclusion: The study provides a better understanding of digital transformation in SMEs, and the strategic adoption of AI is essential for the long-term sustainability of digital transformation. The study provides practical recommendations on how to implement the application of AI in a phased manner, how to organize company training related to AI, and what kind of supportive policies can enable access to AI for SMEs.

Originality/value: Rather than treating “digital transformation” as a black box, we explain how AI-DSS turns data into action in resource-constrained settings, identifying the mechanisms and the boundary conditions that make a real difference.

Practical implications: We outline a phased path to adoption: build solid data governance, form hybrid domain analytics teams, run pilot and scale experiments, and link dashboards to operational decision engines. For policymakers, targeted incentives and shared digital infrastructure can narrow maturity gaps and raise data quality.