The The Role of Business Process Capability and AI Adoption in SMEs
Abstract
Organizations are increasingly adopting artificial intelligence (AI) to improve efficiency and competitiveness; however, small and medium enterprises (SMEs) often face challenges in realizing its potential benefits. This study investigates the mediating role of business process management (BPM) capabilities in the relationship between AI adoption and process performance among SMEs in East Kalimantan, Indonesia. A quantitative research design was employed using survey and interview methods. The study population consisted of SMEs utilizing e-commerce platforms, with purposive sampling used to select respondents experienced in digital adoption. A total of 105 valid responses were analyzed using Structural Equation Modeling (SEM) with WarpPLS. AI adoption was measured through five dimensions: data acquisition, cognitive insight, cognitive engagement, decision support, and cognitive technology, while BPM capabilities encompassed four dimensions: data literacy, innovation literacy, customer literacy, and digital literacy. Process performance was assessed through the dimensions of effectiveness and efficiency. The results showed that AI adoption did not directly improve process performance but significantly improved BPM capabilities, which in turn positively influenced process performance. Furthermore, BPM capabilities fully mediated the relationship between AI adoption and process performance. These findings highlight that AI alone cannot create business value without robust BPM capabilities. This study contributes to theory and practice by applying the Resource-Based View (RBV) to demonstrate how SMEs can achieve sustainable process performance through strategic resource management.
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