Why AI Governance Matters…No Matter Your Business Size

genAI Tools

​Let’s face it: your team is using AI, whether you want them to or not.

If you have any kind of office operations, then chances are almost 100% that someone on your team is using generative AI tools at work. We think that can be a great thing — genAI tools can summarize meetings, help team members brainstorm and organize their thoughts, do light research, and much more. We’ve even explained how some of the new genAI features in Microsoft Copilot can help businesses like yours, right here on the blog.

Using AI can be a good thing. But do you know how your team is using it? Which tools they’re using?

And most important of all: do you know what business data they’re feeding to those AI tools?

Most small business owners don’t. And because AI tools are developing and launching so quickly, most small businesses don’t have clear AI governance in place yet.

What Is Governance?

“Governance” refers to how a business controls and manages its IT resources. It’s why your employees can’t install the latest blockbuster game on their work PCs (we hope!); why you probably block certain types of internet traffic on your office network; and how you set up permissions and access controls throughout your company.

Every business has some level of governance, even if it’s pretty open and loosely defined. If you work with a managed IT provider like us, you have more formal governance in place because we help you manage it.

The SaaS Snag

Where governance gets a little iffy is with Software as a Service, or SaaS. These are software-like things that usually have the option to run in your internet browser (like Canva, Slack, Zoom, and Google Workspace). Since there’s no software to actually install, simple governance systems (like blocking application installs without an administrator password) don’t help. What’s more, many of these tools offer a free version, so they never hit your radar as a budget line item, either.

What about AI Governance?

AI governance is the same concept, but applied to the various generative AI software tools your team may want to use (or already be using). It’s saying yes to certain tools and no to others, at an organizational level.

The big snag: most of the most popular genAI tools (like ChatGPT, Claude, and Grok) have the same “SaaS snag” problem. They run in web browsers, for free, often using personal accounts — making them close to invisible to you as the business owner.

This concept sometimes goes by the term “shadow IT” or, in this case, “shadow AI.” It’s not that your team is doing anything unscrupulous; it’s that you can’t track it or manage it.

To put it another way: how would you know which AI tools an employee is using, and what information your team might be sharing in the process?

You Can’t Control What You Can’t See

So, if you’re like most small business owners, you have people on your team using AI tools on personal accounts you can’t see or track. And they’re giving those tools data. That means your business data is pouring into systems you can’t control, audit, or even see.

Eventually, the wrong thing gets pasted into the wrong box at the wrong time, and you have some kind of incident on your hands.

The Right Approach to AI Governance

Getting AI governance right is a tricky task. It starts with equipping your team with the capabilities they need and want to get their work done fast and well. People stray into shadow IT when they feel like the tools provided can’t get the job done.

Next, make sure expectations are crystal-clear: which tools are approved, and which are off-limits? What data can team members share with AI, and what must stay internal?

Of course, the ultimate answer here involves a bigger, more comprehensive approach to all IT governance, including AI governance. For that, you’ll need an experienced partner like us. We’re happy to show you best practices and craft a governance plan that fits your business. If we can help, reach out to schedule a consult.