Amended BBBEE codes: problem or opportunity?
Having a positive BBBEE scorecard propels your business into new levels of opportunity, says Lenore Kerrigan, Country Sales Director: Africa at Open Text.
"Opportunities are usually disguised as hard work, so most people don't recognise them." Ann Landers
While the basic business imperatives of increasing revenue, decreasing costs and improving compliance remain critical for all businesses, from 1 May 2015 the Amended BBBEE codes came into effect bringing with them new regulatory requirements.
Having a positive BBBEE scorecard not only enhances these business imperatives, it propels your business into new levels of opportunity. This means that companies are feverishly working towards achieving their scorecard objectives so their business can gain competitive advantage and reap even greater rewards.
Facilitating the changeover
Technology is not only the biggest catalyst for achieving compliance and a more robust business model, it also streamlines and manages the processes that come into play to achieve a positive scorecard. Having the right technology in place is crucial to getting your business up to speed with BBBEE compliance requirements and managing them going forward.
On the 11th October 2013, the Broad Based Black Economic Empowerment (BBBEE) Codes of Good Practice were substantially amended by the Department of Trade and Industry (DTI). For all entities, compliance with the changes became compulsory from May, 1st 2015. While the new criteria aren't mandatory, the changes are important for those wanting to tender for government contracts or those wanting to do business with BEE compliant organisations.
The new codes have brought minimum thresholds and interrelated dependencies on criteria which affect the overall scorecard. Examples:
* Priority Elements: There are three priority elements where the minimum score MUST be obtained in ALL three elements. If this is not achieved the company BEE rating will be automatically dropped by 1 level.
*Empowered Supplier: There are five requirements and a large (generic) company has to achieve a minimum of three of the requirements in order to achieve Empowered Supplier status. If this is not achieved, a company's BEE rating will be irrelevant to their customer when providing goods and services - the customer will not be able to recognise any of their spend for BEE Procurement spend in their BEE calculations.
The minimum thresholds and interrelated dependencies require organisations to monitor their BEE standing on a constant, almost real time basis, in order to ensure that the company BEE plan can be achieved at the end of the audit period. The input, data and related measure comes from many departments in the business: HR, finance, procurement, lines of business, company secretary etc. This increases the complexity immensely and introduces high risk of incorrect information gathering and reporting which could lead to an underperforming scorecard, last minute surprises and as a result, potentially loss of business.
Is your business ready?
To ensure a successful transformation, implementation and operationalisation of the Amended BEE codes requirements your company should answer "Yes" to every question in this checklist:
1. Does the board of directors have a BEE Dashboard that is reviewed, at least, quarterly?
2. Does the BEE Dashboard measure minimum threshold and interrelated dependencies and the impact on the overall scorecard?
3. Has the board set a specific BEE target? How is achievement tracked and reported against targets?
4. Has the board issued policies and KPI's throughout the company supporting the achievement of BEE targets?
5. Do the top management and senior managers have a BEE Dashboard that is reviewed, at least, monthly?
6. How does your company track skills development, both formal and informal (e.g mentoring) to meet the skills development requirements?
7. How do you maintain updated information on your suppliers scorecards and shareholding?
Digital transformation to address the BEE opportunity:
Having a positive scorecard takes a collective effort from the entire business. Successful integration of people, processes and technology is the only way to achieve business transformation excellence.
Enterprise Information Management Solutions provide a streamlined, constant and accurate information flow to enable a centralised information source, with audit tracking and early warning decision-making tools:
* Analytics: Dashboards, monitoring, reporting - to track the progress and results.
* Content Management: Centralised structured and unstructured content repository, contract and process management - to ensure one version of the truth, accessibility and search.
* Process Management: Streamlined business centric process with related approvals and escalations - to ensure standards and turnaround times are met.
* Supplier and HR Portals: Central point of contact with self- service - to manage each supplier and employee profile and pass ownership to supplier and employee to provide updated details.
* Integration: Tight integration between EIM systems and systems of record (e.g. ERP, CRM, HR) - to ensure checks and balances with audit trails are in place.
* Collaboration: Real-time embedded collaboration with all involved parties - to ensure the sharing of information and ideas with full auditability.
By digitising the activities and measurements of the BEE requirements, companies are able to plan, organise, lead and control the entire process to ensure best practice and realise the benefits on offer for meeting the BEE requirements and to be recognised as a responsible corporate citizen.