How ERP and the Future of Work in South Africa’s Digital Economy are Intrinsically Linked

digital economy

President Cyril Ramaphosa recently said that harnessing the job-creating potential of the digital economy is how he envisions forging a new post-covid economy. With good reason, as it is estimated that digitisation and automation could bring up to 1.2 million jobs in South Africa by 2030.

According to McKinsey’s paper The future of work in South Africa: Digitisation, productivity, and job creation, with the benefits of increased productivity, improved operational efficiency, and better customer and employee outcomes across multiple business sectors, business leaders consider the temporary disruption of digitisation brings with it as well worthwhile.

The McKinsey paper shows that, if South African businesses are quick to adopt digital technologies, it could triple South Africa’s productivity growth, more than double growth in per capita income, and add more than a percentage point to South Africa’s real GDP growth rate over the next decade.

Firstly, what is the Digital Economy?

The digital economy is the term used to describe the economic activities that take place as a result of billions of daily online connections among people, businesses, devices, data, and processes.

At its core, digital transformation is about using the latest technology to do what you already do, better.

The foundation of the digital economy is hyperconnectivity. This is the connectedness between people, businesses, and technology that is made possible through the Internet, mobile technology and the internet of things (IoT).

Aside from sounding modern and high-tech, are there any tangible benefits of this interconnectedness? Recent research from MIT shows that digitally engaged companies, regardless of the industry, are “26% more profitable than their average industry competitors” and “generate 9% more revenue with their existing physical capacity”.

Why ERP is Materially Linked to South Africa’s Digital Transformation

Enterprise resource planning (ERP) has been helping manufacturing, printing, mining, engineering, and service companies in South Africa for decades. Quietly getting on with the job and allowing businesses to run smoothly, by allowing them to do what they do, but better. Now, from humble beginnings in the ’80s, the modern cloud-based ERP system has the ability to bring organisations into the digital era.

ERP, or a business operating system (BOS), is a central hub for an entire organisation’s data. That means everyone – from the reception desk to the workshop floor to the accountant’s office to the business owner – has the latest, most accurate version of the truth. You can imagine how this streamlines operations. No more version-control issues, no more ‘please hold, let me check how far your order is”, no more waiting five days for a monthly report, no more losing sleep.

Taking full advantage of the advances in technology, BOS automates and simplifies business processes, no matter how geographically dispersed the organisation, no matter how complex its structure.

This is why BOS and South Africa’s digital economy are so deeply linked. They share the same objective: to link a business, its people, its customers, and its machines through the power of the internet (cloud).

Digitisation Benefits through ERP

ERP Mitigates the Skills Gap

Gerald Seegers, Director of Human Resource Services at PwC Southern Africa, says: “The gap between the skills of the current workforce and the skills businesses need to achieve their growth plans is widening. Despite rising business confidence equating to more jobs, organisations are struggling to find the right people to fill these positions.”

While there’s no clear figure on the cost of the rising skills gap in South Africa, it is estimated that the cost of the skills gap in the U.S. would reach US$1.2 trillion over the next decade, according to a report from the American Action Forum.

In Africa, as Africa’s young population enters the job market, the continent is expected to expand its workforce by more than the rest of the world together by 2030, according to WHO.

It is no wonder then that nearly 87% of South Africa’s CEOs (and 80% of the world’s CEO’s) are concerned about finding the right skills, according to PwC’s 22nd Annual Global CEO Survey.


This is where ERP steps in to help bridge the gap. BOS ERP automates so much of the mundane, repetitive, time-consuming back-office work, such as estimating, quoting, finances, reporting, and more – and it does it faster and more accurately than people can. This, in turn, frees up valuable staff to either be reskilled and redeployed into key business areas or to innovate and be productive in their core tasks.

ERP Streamlines Operations

Digital transformation has often less to do with technology and more to do with transforming the business’s people, data, and processes. The benefit of implementing an ERP system which is often designed around optimal business processes is that legacy processes and outdated systems are brought into the light and questioned for relevance.

Saying “we’ve always done it this way” is not optimal for transformation, and while it is disruptive at first, the benefits of improved, updated business processes can be as powerful as the ERP deployment itself.

ERP Gives Clarity to an Uncertain Future

More than anything, the clarity and certainty provided by accurate forecasting, business reports, real-time data and insights from the BOS application gives business owners and decision-makers that much more confidence in an ever-evolving marketplace. Additionally, BOS’s quick, accurate calculations, live reports, and data-driven forecasts could be what gives South African organisations the competitive advantage to keep them one step ahead of the crowd in this digital economy.

Digitise Your Enterprise with BOS

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