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SA’s service economy comes with plenty of challenges but also holds real opportunity

By , CEO and Co-founder, Zuper.
02 Apr 2024
Anand Subbaraj, CEO and Co-founder, Zuper.
Anand Subbaraj, CEO and Co-founder, Zuper.

Ask most people which sector they think makes the biggest contribution to the South African economy and they’ll probably say something like mining or farming. A few might even mention tourism and manufacturing. In reality, those sectors are all dwarfed by the country’s services sector. In fact, services now account for more than 62% of GDP.

Given the sheer depth and breadth of the sector, which incorporates everything from government services to wholesale and retail trade, it should hardly be surprising that it comes with numerous challenges. These challenges range from market uncertainty to competition, skills shortages, and difficulties with innovation and the integration of new technologies. That’s without going into the regulatory, power, and connectivity challenges faced by all South African businesses.

There are, however, also significant opportunities available. That’s especially true for organisations willing to partner with technology providers to tackle those challenges head-on.

Challenges at scale

Before looking at how organisations might leverage those opportunities, it’s worth digging a little deeper into the size of the challenges faced by local businesses.

Take skills shortages, for example. Despite high unemployment figures, particularly among young people, South Africa faces a massive skills shortage in numerous service-sector fields. While it’s difficult to quantify how many jobs are unfilled due to skills shortages, it’s noteworthy that skills development groups The Collective X and Harambee report that 28 000 jobs in the ICT sector alone are outsourced to other countries at a cost of R8.5 billion.

Extrapolate that across the services sector and there are likely hundreds of thousands of service-sector jobs that could be filled by South Africans but currently aren’t. The costs associated with those shortages seriously impede the ability of South African companies to invest in growth, constraining the economy.

Even if those macro issues weren’t a problem, companies within the service sector would still face significant challenges. As companies continue to pursue the gains offered by digital transformation, they may struggle to integrate industry-specific solutions with enterprise-scale technologies. This not only impacts their ability to grow but also to keep a close eye on important functions such as field service management.

The right tech partner can help

But it doesn’t have to be that way. With the right field service technology partners, organisations can mitigate talent shortages and other society-wide issues while also achieving effective digital transformation.

Take digital and ICT skills for example. A good technology partner will have low and no-code solutions and make use of intelligent automation and streamlined operating procedures which means that businesses can customise a solution without having to hire additional expertise. If it’s capable of transforming business data into actionable insights, it can also reduce the need for businesses to spend on expensive data analysis.

A good technology partner will also integrate easily with all the major technology partners across a broad range of fields, including CRM, workflow automation, collaboration, marketing, and commerce. This level of integration helps ensure that customers get the kind of experience they want. That, in turn, results in increased customer satisfaction and retention.

The companies that take this approach will also see revenue growth, increased time savings, and increased customer loyalty. All of this means that they can maintain their core business focus without many of the distractions that their competitors face. That, in turn, gives them more breathing room to focus on spotting gaps in the market and growth opportunities.

Controlling the controllable

Ultimately, many of the big challenges facing South Africa and the services sector aren’t likely to go away anytime soon. But that doesn’t mean they’re insurmountable or, at the very least, mitigatable.

With the right tools and approaches, organisations can find opportunities within and in spite of those challenges. And by making use of effective partnerships, particularly when it comes to field service technology, they can grow and contribute to an expanding economy, even within the most challenging environments. 

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