Reengineering Business Processes in SMEs Using AI-Based Workflow Automation Tools

Abstract

Small and Medium Enterprises (SMEs) face constant pressure to enhance efficiency, agility, and competitiveness in an increasingly digital economy. This research investigates how AI-based workflow automation tools can support business process reengineering (BPR) in SMEs, enabling them to optimize operations, reduce manual errors, and improve decision-making. The study adopts a mixed-method approach, combining qualitative case studies from selected Indonesian SMEs with quantitative surveys distributed to SME owners and managers across multiple sectors. The findings indicate that AI-driven automation, such as robotic process automation (RPA), intelligent document processing, and predictive analytics, significantly streamline key processes in finance, customer service, and supply chain management. Moreover, SMEs that implemented AI tools within a structured BPR framework experienced measurable improvements in operational efficiency, employee productivity, and customer responsiveness. However, challenges were noted in the areas of digital readiness, workforce reskilling, and technology investment costs. This study contributes to the body of knowledge on digital transformation in SMEs by proposing a practical model for AI-integrated BPR, emphasizing phased adoption, stakeholder engagement, and continuous monitoring. The research concludes that while AI-based automation offers transformative potential, its success depends on strategic alignment, change management, and a clear understanding of business process objectives