Man vs Machine: Navigating the AI and Expert Tug-of-War for SME’s in South Africa

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4 min read

JOHANNESBURG – Did you know that a third of all small businesses fold in the first two years? It’s a daunting statistic. By the five-year mark, half have shut their doors, and only a third see a decade. The journey of an SME isn’t easy, and every entrepreneur knows this all too well.

In South Africa, the stakes are even higher. SMEs are more than just small-time players; they represent 98% of all businesses. They employ between 50 to 60% of the entire workforce and make a significant 39% contribution to the GDP. Yet, the South African landscape isn’t without its unique challenges, with issues like load shedding adding to the typical hurdles that SMEs face.

Why Outsourcing Matters for SMEs

For SMEs to weather these storms and grow, they must consider the strength of outsourcing pivotal services. Based on the insights from a recent Corporate Traveller white paper, The Power of Outsourcing in Business Services & Travel, areas such as customer support, IT infrastructure management, financial consulting, human resources, and travel management emerge as sectors where outsourcing can provide competitive advantages. Outsourcing ensures that businesses can draw from a larger talent pool, access best-practice expertise, and ultimately, focus on their core competencies.

Let’s dig deeper:

  • Customer Support: Outsourcing this allows businesses to offer 24/7 support without the constraints of time zones or added costs for night shifts.
  • IT Infrastructure Management: Tech experts can better handle updates, threats, and tech support, while SMEs focus on their core activities.
  • Financial Consulting: Expert financial advice can guide SMEs in money matters, preventing costly errors.
  • Human Resources: Outsourcing HR means having seasoned professionals manage personnel issues, training, and hiring.
  • Travel Management: TMCs simplify the intricacies of corporate travel, ensuring compliance, cost savings, and traveller safety.

Concerns and Misconceptions about Outsourcing

Yet, deciding to outsource doesn’t come easy. South African SMEs grapple with several concerns:

  1. Loss of Control: Handing over vital functions feels akin to relinquishing the company’s pulse. The reality, however, is that most outsourcing partners work collaboratively, ensuring transparency and shared objectives.
  2. Hidden Costs: The fear that once in, unexpected costs will emerge. A robust agreement and open communication can keep such concerns at bay.
  3. Data Security: In this digital age, the sharing of proprietary information with external entities poses potential risks.
  4. Quality Concerns: Will the quality be up to par? Here, due diligence in selecting the right partner, reading testimonials, and checking references can assuage doubts.

AI’s Growing Appeal for SMEs

Given these concerns, it’s not rocket science to see why some SMEs might glance at AI and think, “Well, here’s a solution that gives me control, doesn’t demand exorbitant fees, and operates at my command.” A computer won’t haggle about costs, and algorithms don’t need lunch breaks, right?

There’s no denying the monumental strides AI has taken. For repetitive tasks, large-scale data analysis, or even predictive analytics, AI stands unmatched. The magic happens when algorithms unearth patterns from colossal datasets in mere seconds, offering SMEs insights that can be game-changers. SMEs are leveraging AI for data analysis, predictive market trends, customer chatbots, and even basic project management.

But as much as AI promises efficiency, it isn’t without limitations. The intricacies of South African society with its socio-economic fabric, rich cultural diversity, and unique business environment can’t be distilled down to just binary code. It demands a deeper human connection – a touch AI hasn’t mastered yet.

A Balanced Approach: Merging Human Expertise with AI

Bonnie Smith, GM of Corporate Traveller South Africa, hits the nail on the head in the Corporate Traveller white paper. She mentions that while AI is undoubtedly transformative, it isn’t the end-all solution. Instead, the magic happens when businesses combine the efficiency of AI with the depth and flexibility of human expertise.

For instance, while an AI tool in travel management can predict the best time to book a flight or suggest optimal routes, it’s the human touch that understands the nuances of business travel, the needs of the traveller, and can make decisions based on ever-changing global scenarios.

In essence, neither AI nor human expertise should exist in silos. Together, they form a formidable force that allows SMEs to navigate the complexities of the South African business landscape with agility. It’s this combined strength – the efficiency of AI and the adaptability of human intelligence – that will propel SMEs forward in the challenging yet dynamic environment they operate in.

For more information about Corporate Traveller, or to interview Corporate Traveller South Africa GM Oz Desai, call Dorine Reinstein on 083 278 8994 or email dorine@bigambitions.co.za.