From hype to business value: Landing AI in the South African business
The appetite for AI in South Africa is growing at the same speed as AI is evolving. Chat assistants, automated reporting and predictive insights are providing companies across all sectors with tools they can actively use to improve productivity, decision-making and customer experiences. Gartner has predicted that by 2027, 50% of business decisions will be augmented or automated by AI agents so companies can act faster and with more intelligence to achieve high value within their businesses.
This article explores:
An example of a successful AI implementation within South Africa and why it worked.
AI challenges and opportunities in South Africa.
AI readiness within the South African context.
Success Story
The Chief of Enterprise Partners, Microsoft Middle East & Africa, Dr Lillian Barnard has described an AI use case within the South African Revenue Service (SARS). Dr Barnard mentions several ways in which AI has been implemented within the service. These include non-compliance detection, pre-population automation of tax returns, and chatbot functionality to guide tax filing, among others.
South Africa is known for its sluggish service delivery within the public sector. By utilising AI, SARS can counteract this stigma. The need for efficiency and compliance was addressed through the use of AI, resulting in a successful implementation. The revenue service can now address non-compliance more quickly than ever, as well as provide South African citizens with effective assistance on their tax returns, ensuring that tax is fairly collected for use within the broader scope of service delivery.
Challenges and Opportunities
With AI reshaping everything from industry to daily life, South African businesses are navigating a new wave of challenges and opportunities.
AI Challenges:
- Legacy systems are not compatible with AI tools. Businesses choose to remain on old systems because ‘It works’. There is a fear of the unknown in migrating existing systems to ones which are more modern and AI-compatible.
- Skills gaps for AI implementation. Businesses may not have the required skills for an AI implementation and, therefore, shy away from it altogether.
- Lack of trust in AI systems due to quick-win implementations. It is often too easy to quickly spin up an AI agent and point it to some knowledge context of unprepared data. This leads to undesired results and immediate distrust in AI solutions with very little to zero return on investment.
- Poor data quality. Good AI requires exceptional data quality! The well-known saying ‘garbage in, garbage out’ is commonly used during AI implementations. Businesses do not fully understand the need for high-quality data as inputs for AI.
- Data governance and security. This is an afterthought for most South African businesses. In the age of AI, data governance and security pose a challenge, as businesses realise they are not compliant with regulations and their sensitive data is openly exposed to AI tools.
AI Opportunities:
- Job creation. There is a massive demand for people with AI-related skills. This is met by Microsoft who has committed to the AI skilling of one million South Africans by the year 2026. Microsoft commits to skilling one million people for digital skills through Artificial Intelligence skilling initiative in South Africa – Source EMEA
- Linguistic representation. We are privileged as South Africans to have 11 official languages within our country. In the context of AI, an opportunity exists for linguistic representation and inclusivity, allowing South Africans speaking any of the official languages to be included in the great expansion of AI. This can already be seen in projects such as Lelapa AI. Home | Lelapa
- AI Infrastructure expansion. South Africa stands as a leader in the SADC region for cloud-based infrastructure. Vice chairperson of Microsoft Brad Smith has announced a further investment in South African cloud and AI infrastructure to the value of R5.4 billion. This shows Microsoft’s confidence in the South African market for AI adoption. Microsoft’s commitment to expand AI infrastructure lauded | SAnews.
- Industry-specific opportunities. Leading sectors in South Africa can implement AI to realise several benefits. Healthcare can enhance diagnostics and enable predictive care for patients. Agriculture, one of South Africa’s key economic sectors, can benefit from AI technologies in improved productivity, sustainability, and resource management.
AI Readiness in South Africa
Businesses want to know what steps they should take before implementing AI, and the answer is:
Start by identifying the business value that AI will drive within your organisation and ensure this aligns with the business’s broader digital strategy.
South African companies require AI platforms that are secure, integrated, and scalable, particularly across hybrid teams and regulated sectors.
Readily available tools, such as Microsoft Copilot, Fabric, and Purview, can assist with starting the AI journey. Microsoft Copilot is embedded in the everyday tools already in use by most organisations. It simplifies adoption, reduces training time and fits within known workflows. Microsoft Fabric supports this by consolidating all data from across business units, platforms, and services into a single architecture. Combined with Microsoft Purview, which ensures data used in AI models is secure, classified and compliant.
AI maturity is about relevance, and in South Africa, with infrastructure variances, compliance demands and bandwidth constraints, AI success must be practical. A localised roadmap should include several key elements such as:
- Focusing on high-impact, clearly scoped use cases
- Aligning platforms and data to those use cases
- Embedding data governance from the outset
- Building internal skills to support and sustain AI tools
- Reviewing and iterating consistently to maximise Return on Investment
Making AI work in South Africa begins with defining what that work truly means and then building the systems, skills, and structures to achieve it.
