Background of the Services Business industry
According to Brand South the financial, real estate, and business service sector, together with other services sectors, has proved to be a pillar of the country’s economic growth over the years.
A services business is a company that provides certain professional support to its clients. In these businesses the product is not a tangible one, instead, it is an activity that helps the third party in different areas.
The following are investment opportunities and sub-sectors in South Africa in the Business Process Outsourcing & IT Enabled Services sector:
- Call Centres;
- Back/Office Processing;
- Shared Corporate Services;
- Enterprise solutions, e.g. fleet management and asset management; and
- Legal process outsourcing.
Despite the growth and opportunities available in the services sector, they are usually laggards in adopting a digital approach to evolve their business. This leaves them open to being disrupted by innovative startups that are looking to capture a piece of their market. This however does not need to become the reality of these businesses as there are a few things they can do to modernize the way they operate to provide greater value to their customers.
Typical Services Business Structure
Sample Organisational Structure
Every professional services business has the typical structure as highlighted above, including but missing HR, Finance, Customer Success, and Legal which are sometimes outsourced as support services to the company. The key is getting the various components to work together in an efficient manner that minimizes friction and provides a great and unique customer experience.
Challenges Services Business Face
According to EasyProjects challenges firms usually face, not exhaustive, are:
- Customer Acquisition and Retention
- New Technology Adoption and Onboarding
- Talent-Sourcing and Further Retention
- Resource Loading and Allocation
- Remote and Hybrid Team Management
- Managing Cash Flows
As a firm within the sector, these challenges can usually become a make-or-break situation for the business. Trying to understand which areas to tackle relies on a company-wide effort with a strong strategy set out by the CEO in collaboration with the management, bundled with budgeting and forecasting for the business.
Growing Through Innovation
Many organizations usually embark on a digital transformation journey with a lot of focus placed on the digital aspect and not necessarily the business model aspect. An initial idea for modernizing the business will be to look at the business model and understand if it is possible to introduce a platform business approach. A platform business is a business model (not a technology infrastructure) that focuses on helping to facilitate interactions across a large number of participants. (Deloitte). A platform business model does not own the means of production, but rather creates and facilitates the means of connection.
What a platform business translates to for a professional services business is, that the core service provided is not necessarily facilitated by the company, instead, the interaction between the client and professional is the focus. Interactions can be in various stages of the customer/professionals journey, like:
- Onboarding the customer
- Payments between parties
- Verification/Vetting of parties
- Value exchange between the parties
- Support queries
A platform business approach has a big impact on how you acquire customers, the team members you hire, and resource management and allocation. A strategic change is required to address how the business can either fully adopt a platform business model or if they can follow a hybrid approach meaning running a platform business for a specific department in parallel with the core business model. An example here would be a legal firm keeping its core business model and modernizing a certain division like compliance services to a platform approach.
Try out Skywalk
Would you like to explore a platform business model? Give Skywalk a chance. Book a no-obligation session with our team and explore more ideas around technology to grow your business.