38 While some mid-sized firms may have more streamlined ERP systems, some may not, which leaves these players with the same technical complexities as larger enterprises, but with fewer resources to address them. In this case, effective planning and value assessments for Gen-AI tools are therefore even more critical in the middle-market, because firms will need to balance potentially finite resources with varying degrees of complexity in their ERP systems and other technologies on which Gen-AI tools depend. Looking at the smaller or early-stage businesses, it seems both face similar advantages and challenges to integrating Gen-AI. Many venture-backed and early-stage companies have the advantage of developing their organizations from the ground-up at the same time that Gen-AI tools emerge. Further, small businesses often have less complex ERP and technology systems compared to larger peers, making integration with Gen-AI tools relatively more straight forward. However, startups face the unique challenge of balancing pressure from investors to stay ahead of Gen-AI’s adoption curve, while small businesses must ensure they remain competitive with their peers who could be adopting Gen-AI tools to boost productivity. says John Conafay, CEO of Integrate—a project management platform that helps organizations in the defense industrial base leverage Generative AI with their planning platform to expedite project management. For John, patience in how and where to integrate Generative AI has paid off; Integrate recently won a $25 million SBIR Phase III. Both small businesses and startups need to ensure that their finite time, money, and energy are allocated toward activities that directly serve the business’ immediate needs. For these firms, all three of these resources are constantly constrained; even assessing the potential to adopt Gen-AI tools will require a manager to allocate time away from executing against critical business functions. Prioritizing technological flexibility in the build-process, resolving technical debt present in ERP systems, and weighing the trade-offs unique to each firm’s size and maturity are critical considerations across all firms. Figure 12 below overlays examples of these strategic trade-offs that managers should consider. Every investor we spoke to asked for an AI strategy. “ We could have turned on the switch and said we have AI capabilities, and give a demo, but we didn’t want to because it wouldn’t be truly impactful. Now, we’re deploying our first LLM microservice for applications because—and only because—it makes sense. The tools help users draft a 100-300 row outline of a program in the application in 2-3 minutes, which used to take hours. We now see a world in which potentially 90% of work done in Integrate is done via AI agents. “ Generative AI Adoption in the US Military From a data perspective, it gives us a significant advantage as these tools increasingly support our staff in their roles. “