Computer Science Corporation (CSC) has announced a black economic empowerment (BEE) alliance with two black-owned SAP implementation companies - Cornastone Technology Holdings and Nokusa Consulting.
The companies say the agreement brings to the South African market a black-empowered offering that will challenge established players competing for a share of the SAP application implementation and service market.
CSC`s South African subsidiary indicated in the past that it would explore BEE initiatives, selling up to 25% of its operations, and has supported the BEE ICT charter.
CSC SA`s MD Martin Vergunst has said his company would explore various BEE deals "as long as they made business sense".
Sharing independently
This is described as the first empowerment alliance where each member will share the risks and rewards of their aspect of client engagements, while retaining corporate independence. Unlike most alliances, the members will not sell or exchange equity, and the alliance will not be a registered entity in terms of the Companies Act.
The partners say the company that acts as the prime contractor with each new client deal will take the legal responsibility for the relationship between the client and the alliance, and manage the project. There will be no hierarchical model with one company playing the dominant role in the alliance.
Jim Kleyn, CSC`s global transformation solutions sourcing director, says the alliance makes good business sense. "The companies will work together on an 'open book, exclusive relationship` basis. This means that each company`s business operations will be transparent to the others, and that no new relationships with additional service providers can be struck without permission of others in the alliance."
Existing relationships that Cornastone and Nokusa have with other service providers will be phased out over time as current engagements are concluded.
Kleyn says the companies will jointly seek new business opportunities to ensure a package for customers needing to engage with a BEE-accredited service provider.
"The risks and rewards will be equally shared between the alliance members. For CSC, this is the first of the innovative ways in which we will contribute to the enterprise development pillar of the draft ICT empowerment charter."
Cornastone CEO Hamilton Ratshefola says his company anticipates increasing its SAP resource capacity by 30 to 50 resources in the next 12 to 18 months.
"We viewed this association as an opportunity for Cornastone to build its capacity, develop critical intellectual property and develop a long-term sustainable business model."
Nokusa CEO Moses Hadebe says this is the "beginning of a deep and committed BEE relationship".
"We have been involved with CSC creating and delivering work for large international companies and have found the relationship fitting and fruitful," he says.
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