For many organisations, the imperative to transform is obvious, and with the requisite planning in place, broad-based black economic empowerment (BBBEE) compliance targets become achievable.
However, the measurement of the scorecard is onerous.
One of the biggest contributors to company BEE compliance officers' frustrations is the collection of scorecards from key suppliers to serve as evidence backing up one fifth of the points that they can claim for their scorecards.
WHAT IT MEANS
 Scorecards easy to find on database
Web-managed communications
|
Suppliers receive hundreds of questionnaires about their empowerment position. Often each is worded differently, with quite different requirements.
It has been estimated that if every company in SA had 20 clients and all asked their suppliers to fill in BEE procurement surveys, 18m surveys would have to be completed - and if every company in SA created a unique survey, there would be 900 000 different forms to fill in.
The FM has joined forces with Ownership Solutions, Mpowered Business Solutions and Transcend Corporate Advisors to build a database that makes it easier for businesses to complete the procurement sections of their own scorecards. The database will also help the businesses reduce the frustration, inefficiency and cost of the preferential procurement process and to further transformation in SA.
Companies are encouraged to publish their BBBEE scorecard on the database, which is accessible to all. This system enables any company to search for their suppliers' BBBEE scorecards via www.empowerment.co.za.
It is to your suppliers' advantage to lodge their certificates on the website, as they can direct all their customer queries to that one source for future reference.
To get your suppliers to lodge their scorecards on the website, download your vendor list, and the website will send an e-mail to your suppliers inviting them to register, along with the Web links they need to follow, reducing your administrative burden.
Companies with a large supplier base will match hundreds of their suppliers to the company information within the BBBEE database. Once you have registered and downloaded your supplier base, automated notification will be sent to your buyers and suppliers a month or two prior to their scorecard expiry date, reminding them to update their scorecards.
Communication with any group of suppliers can be managed using the website. For example, you can identify all your level 8 QSE suppliers in Gauteng with a scorecard expiring within two months and update all follow-up communication on the system, so that it's all in one place.
Procurement officers can also upload their spending data to automate preferential procurement calculations.
So what should I do to collect my suppliers' certificates?
- Check whether your current suppliers are already listed.
- Ask your suppliers to lodge their empowerment credentials on the site and to keep them current.
What do I do with these certificates?
Once you have copies of all your suppliers' scorecards, you need to build your current preferential procurement score as input to your empowerment position. Then analyse what can be done to improve that empowerment position.
Determining current state
If you are using the electronic scorecard downloadable from www.empowerment.co.za (Integrator), input your suppliers' empowerment credentials and determine your preferential procurement scoring. The important fields are:
- Broad-based economic empowerment scoring (expressed as a level);
- Size of business (small, micro or large);
- Black ownership (as a percentage);
- Black female ownership; and
- Value adding supplier (yes or no)
Improving your preferential procurement score
With the current state of your suppliers clear, focus on the quality and sustainability of suppliers who are early in or slow on their journey.
Divide your suppliers into categories (high spending/low score; low spending but micro supplier; supplier over whom you have a strong influence; and so on).
A plan of appropriate reaction to each set needs to be developed.
Preferential procurement is about courting your suppliers in a way that's sustainable and adds value.
Do not get caught in a trap of chasing the numbers with short-term objectives and land up weakening the value chain as a consequence. It's about encouraging and supporting with positive pressure and energy, but not whipping into compliance.
It is the quality of the conversations your procurement people have with your suppliers that will affect the attitude of that supplier to BEE.
- Woolley is CEO of Transcend Corporate Advisors and Rowe is MD of Mpowered Business Solutions
