The global education-technology (ed-tech) market has grown rapidly in the last ten years, morphing from R8,6 billion in venture-capital funding in 2010 to R121 billion last year. And, according to market-intelligence platform HolonIQ, the industry is expected to boom to over R173 trillion by 2030, as more governments, corporates and individuals take heed of the United Nation’s sustainable development goal of inclusive and equitable quality education for all.
South Africa’s ed-tech market is dominated by corporate education demand and the government’s many Sector Education and Training Authority (SETA) needs. The highly competitive local industry’s compound annual growth grew at double-digit rates between 2013 and 2018, with an increasing number of schools opting for eLearning courses and students adapting to new ways of learning, such as via videos, animation and Massive Open Online Courses (MOOCs).
When choosing the right ed-tech partner, references and track records matter, says Dr. Kershen Pillay, CEO of the Graduate Institute of Financial Sciences (GIFS), a financial services education provider of accredited and non-accredited programmes. “The global pandemic has accelerated demand for online learning, and there’s been a mushrooming of low-cost eLearning systems and technology, all professing to offer something attractive. The onus is on organisations to really do a solid job when it comes to due diligence and choosing the right partner,” he says.
Forgoing a thorough assessment can have negative impacts on any business, including unnecessary costs, delayed time to going to market, higher-than-normal client churn, a struggle to attract new customers, and substantial reputation risk. “Aside from the functional nature of an ed-tech partner’s software, or its level of innovation, what many people take for granted is how important ongoing customer support is once the initial transaction has been finalised,” says Michael Hanly, managing director of New Leaf Technologies, a Joburg-headquartered learning software and solutions company.
Statista, a German online portal for statistics, revealed in January this year that the global customer-care business process outsourcing (BPO) market will reach an astonishing R529 billion in market cap size by 2027. Similarly, FinancesOnline, a Poland-based online-review platform which features reviews posted about businesses, products or services, says that 88% of customers prefer doing business with a company that offers quality customer service over one that has the latest and most innovative products. And 89% of companies in 2018 competed primarily on the basis of customer service, up from just 36% in 2010.
“The main reason we chose New Leaf Technologies as our ed-tech supplier/partner is that they’re owner-managed, and understand the value of client-centricity and quick turnaround time,” says Pillay. GIFS wanted to align its online learner journey to global standards. “We benchmarked several systems offered around the world, identified what the legislated educational requirements were, mapped out what our business needs were, and then issued an RFP [request for proposal] to find a partner that could cater for all our requisites.”
Aside from needing a flexible partner that was solution oriented and innovative, GIFS wanted an organisation that was as excited and passionate about its online solutions as they were. This often plays a part in defining the level of customer service and support an organisation provides.
“It’s crucial that ed-tech companies really listen to and understand the changing needs and wants of their customers, but also become familiar with external market factors like available spend, industry-specific needs, or to what extent a customer would want software that’s more content or technology oriented,” says Hanly. “These factors play a vital role in shaping how companies search for and find ed-tech businesses to meet their needs.”
Among the most important customer expectations, regardless of industry, 76% was for companies to understand their needs, and 75% to get help within five minutes, according to surveys by global professional services firm Accenture, American cloud-based software company Salesforce, global management consulting firm McKinsey, multinational technology company Microsoft, and e-commerce news site Bizreport.
“An excellent degree of customer support is so necessary, and not just at the onset,” says Hanly. “We often forget that the material effects a solid degree of customer service can have on the viability of an ed-tech company, or any business for that matter, can be invaluable.”
Assessing how customers react to good customer support, Salesforce says that 72% share good experiences with others, while 67% are willing to pay more for a great experience. “Especially in an ed-tech business-to-business market context, new business for an ed-tech supplier often comes through client referrals or word of mouth,” says Hanly. “If a supplier has a solid track record with excellent client results, a potential customer may be willing to pay more for their software, which in turn means increased earnings for the supplier.”
Using New Leaf Technologies’ cloud-based aNewSpring learning management system (LMS) as a bedrock for how GIFS’ online course content is shared, Pillay believes that GIFS has achieved the goals it initially set out to accomplish through the ed-tech partnerships. “The objective to enhance efficiencies right across our business has definitely had an indirect impact on an improved bottom line – our tech has certainly contributed to our maintaining a market-leading and award-winning position.”
Looking ahead, Hanly believes that the local ed-tech market is on the edge of a renaissance. “The profound effect the pandemic has had on safe, credible online learning, coupled with bandwidth increases and dropping data costs, means that the industry, both in South Africa and across the continent, will flourish.”