Altron subsidiary Bytes Technology Group is SA's most empowered listed information and communications technology (ICT) group in 2007, leaping past GijimaAst, Mustek and Telkom into first place in the sector in the Top Empowerment Companies rankings.
The company's overall position has also improved, from tenth in 2006 to eighth this year. Bytes CEO David Redshaw attributes the group's performance to a range of measures the group has taken to improve its empowerment credentials.
Bytes's empowerment programme, which is led by human resources and group transformation manager Skip Franzsen, is focused not only on equity ownership by black shareholders but on the broad range of empowerment criteria identified by the codes of good practice created in terms of the Broad-Based Black Economic Empowerment Act.
Rather than try to force change from the top, Bytes has taken a bottom-up approach, where each business unit is encouraged to manage its own transformation.
The wider Altron Group acknowledges the need for empowerment and has spearheaded the transformation agenda. Redshaw credits former Altron director (now SABC CEO) Dali Mpofu for much of the work done in this regard.
About three years ago, Altron created guidelines aimed at transforming the business by 2010. The guidelines were adopted by the Bytes board. "We have taken it very seriously," says Bytes finance director Peter Riskowitz.
Bytes itself has long been ahead of the pack in corporate SA in breaking down racial barriers and fostering black participation in its business.
Some of the earliest reforms happened because of pressure from US multinationals, which were subject to the Sullivan codes. These codes obliged US companies to ensure that equitable employment practices were applied by its subsidiaries and the companies it worked with in SA.
Redshaw says Bytes has consistently stayed ahead of the curve. It concluded its equity deal with Kagiso long before black equity deals became de rigueur.
The group's Xerox business, Bytes Document Solutions, has traditionally led the way in empowerment thanks to the keen interest and involvement of MD Rob Abraham.
"Xerox really was ahead of the game compared with any of our other operations," says Riskowitz. "The operations that were lagging in empowerment realised that they couldn't piggyback on Xerox's success and so they took it upon themselves to move much more rapidly."
The group formed a transformation committee, with Kagiso and the leaders of each of the operating companies participating. "We produced a one-page document that showed where everyone was compared to everyone else and that had a big impact," says Franzsen.
The operating companies began competing with one another to be seen to be leaders in empowerment. A portion of executive bonuses was based on whether BEE targets had been met.
"Every month we produce the seven components of the scorecard and there is strong visibility at the executive level of every business," Franzsen says. "The change has been remarkable. We get 10 or 12 MDs in a room who are passionate about improving their scores. How can you lose with that sort of approach?"
Unlike many empowerment partners, Kagiso is actively involved in the Bytes business. Representatives participate in quarterly board meetings and in each of the individual operations' monthly meetings. Kagiso is also involved weekly in various operational issues and assists the group in pitching for tenders and with transformational issues and recruiting black skills.
"We did not want a sleeping partner so we wrote rules into the deal that oblige them to become actively involved in the operations," Franzsen says. Kagiso has two representatives on the board, Roger Jardine and Afzal Patel.
Bytes has also secured the services of Douglas Ramaphosa, who was set to join the group as an executive director on March 1 (he was previously on the board in a nonexecutive capacity).
Ramaphosa will become MD of Bytes Specialised Solutions, the group's NCR business which sells ATMs and other solutions in the financial services industry. The group is actively involved in other projects, such as in skills development and education.
Through its Bytes People Solutions business, it has pioneered a number of learnership programmes. One of these programmes was to train 50 disabled people in ICT.
The Bytes MDs have worked closely with Bytes People Solutions to develop the skills needed in the group.
In education, Bytes is investing about R3m/year in building multimedia computer centres in disadvantaged areas. It built the first such centre, which includes networked computer equipment, software and Internet access, in Orange Farm, south of Johannesburg. It will have built 10 computer centres by mid-2007, which will be used by more than 10 000 learners.
