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Refining BBBEE

Track procurement spend, engage in training and enhance employment practices to improve BBBEE rankings.


Johannesburg, 24 May 2017
Carl Janse van Rensburg, Operations Director, EOH Intellient.
Carl Janse van Rensburg, Operations Director, EOH Intellient.

Broad-Based Black Economic Empowerment (BBBEE) set out to correct the socio-economic imbalances of the past and requires that enterprise and supplier meet specific goals to support growth and economic development. There are five elements against which the business is judged, each one impacting on its overall BBBEE status. Three of these are labelled as priority elements - ownership, skills development, and enterprise and supplier development. The enterprise must achieve a minimum of 40% compliance in these priority elements or face an automatic reduction in their level. Measurement is carried across scorecards and assessments, and these can be complex, time-consuming and challenging. To comply with BBBEE, the business has to redefine how it engages with it.

Carl Janse van Rensburg, Operations Director at EOH Intellient, explains: "Achieving and retaining compliance can be managed effectively through the introduction of relevant technology solutions that have been designed with BBBEE in mind. There are solutions that have recognised the enterprise need to track and manage BBBEE compliance more effectively and, when it comes to procurement, the right implementation can support the enterprise in tracking spend to ensure it meets the preferential procurement targets.

"Some solutions can be tailored to fit the very specific parameters of the business and are agile enough to adapt to shifting targets and requirements. The business can fine-tune procurement spend using reports that show spend across compliant and non-compliant vendors, percentages of spend vs target spend, real-time scores and actual deliverables."

From forecasting to variance analysis, scenario planning to what-if modelling, advancements in technology are offering the business far greater control over how they approach BBBEE compliance.

In addition to reporting and forecast, the business can use the data to make more strategic procurement decisions. Using data analytics tools and systems - many of which are far more cost-effective and easy to use than ever before - the enterprise can adapt spend to fit percentage goals. This allows for more targeted BBBEE decision-making as targets for business units can become more aligned and the Chief Financial Officer (CFO) can adapt spend behaviour to ensure this alignment.

Janse van Rensburg continues: "To further refine business practice, the business can also establish a BBBEE database that lists compliant vendors and keeps their status up to date. Business units can access this to further alignment goals by ensuring that suppliers are managed more effectively - suppliers with expired certificates or poor or non-compliant businesses can be removed or highlighted."

The ability to drill down into minute levels of detail can further collaboration for the enterprise and its suppliers. Those that are non-transformed can be encouraged to form value-added joint ventures with those that are, and payment cycles can be adapted to support black-owned entities.

"Throughout implementation, the enterprise can also look to reducing or expanding investment based on need," she says. "For procurement-specific requirements, a small and focused solution can deliver a robust starting point on the road to BBBEE compliance. This can be further enhanced by investment into technology to support employee training and development, recognising individuals and teams that require upliftment and growth, and to deliver enhanced employment practices."

Again, data can be used to determine the volume of employees that meet BBBEE requirements and the targets that need to be met to make more informed hiring choices on the front line. This can also drive strategic implementation and management of targeted training programmes that boost employee capabilities and potential.

"For many organisations, navigating BBBEE can be as complex as the proverbial minefield as they struggle towards compliance without clear insights into how the business manages spend and employee investment. This doesn't have to be the story for the future - technology is far too ubiquitous and the return on investment too tangible to ignore. It offers the enterprise a clear view of today to ensure it meets the BBBEE requirements of tomorrow," concludes Janse van Rensburg.

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