Johannesburg, 06 Dec 2007
Not enough large businesses regard the development of smaller businesses as an essential part of their strategies. Instead, they often see partnerships with small, medium and micro enterprises (SMEs) as cumbersome obligations that can be fulfilled through last-minute arrangements.
This is the view of Joe Mjwara, group executive of strategic relations at Business Connexion, who says that partner programmes are often opportunistic and badly planned. "The ICT Charter and other codes call for a commitment to enterprise development, but many organisations fail to see the business benefits of this," he says.
Mjwara says SME development has a strong business case that is irrelevant to empowerment credentials. "Given the overheads associated with a large ICT company, delivering a cost-effective service is difficult in certain areas, such as basic and desktop services and cabling, and services to small or outlying areas," he says.
He adds that structure and planning are essential to the success of partner programmes. "Fronting is a huge problem in the industry," he says, referring to the practice of partnering with an SME at the last minute to win tenders from government, and then ignoring or sidelining the smaller business in the project. "There is a need for thorough, outward-looking strategies that see SMEs not as stepping stones, but as essential partners in joint undertakings that will deliver value to both parties," he says. National, provincial and local government have committed to ensuring the acceleration of transformation and the growth of SMMEs in the ICT sector. However, large ICT companies still hold the skills and financial muscle to deliver on large and complex projects, and so government is incentivising partnerships between large enterprises and SMEs.
Partnerships of this nature allow the SME to take on projects without incurring crippling overhead costs and help the larger business drive down costs for their clients.
Responsibility for a mature relationship rests with both partners, however, and Mjwara says that for partnerships to work, the SME must deliver specialist solutions. Furthermore, the SME should be proactive in developing its managerial, marketing and client management capabilities, as well as its skills.
Once a carefully planned framework is in place, both partners can look forward to a range of benefits from the relationship. The SME can gain from skills development, joint marketing initiatives and support, and the larger business can gain the ability and flexibility to offer a new and specialised set of tools, as well as extend its empowerment footprint.
Mjwara says that a perfect match often means knowing what to look for in a partner. "SMEs should look for partners that are committed to growing them as an important part of their businesses, and large enterprises should look for SMEs with good track records, initiative and potential," he concludes.
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