South African companies cannot continue with business as usual practices in terms of meeting black economic-empowerment (BEE) targets, as it is no longer just a “tick-box exercise”, panelists at the Inyosi Enterprise and Supplier Development BEE debate said on Thursday.
Panelist Leanne Livingstone noted that, under the old legislation, it was “actually very easy” to accumulate a good BEE score.
This changed in 2012, with the draft and, in 2013, with the final revision of the new BEE Codes of Good Practice. “We are now only starting to see the actual impact of these new codes,” said Livingstone.
“You have to look at the future of your business. If you are going to implement the same activities you did last year, or view BEE in the same way as you did previously, you will not be successful,” she noted.
Further, Livingstone pointed out that companies were now starting to implement sustainable transformation activities. “Ownership is not the most important aspect of the codes; the scorecard only requires a minimum of 10%. Enterprise and supplier development is a far better [means] to meet these requirements.”
Inyosi manager Evan Jones noted that the enabling legislation should provide a tailwind, but that there was a need to bring the companies in need of meeting the 40% procurement goals closer to smaller businesses.
Many companies claim that while they are willing to invest in local procurement, there are not enough local manufacturers and suppliers to match that.
He added that companies that change their procurement strategy have to approach it with a long-term mindset, while gaining short-term wins. “What has become very clear, over the last year, [is that] this change needs to be managed carefully. Inyosi sets out to close that gap,” said Jones.
Livingstone further highlighted that companies also had to focus on not “keeping the pie the same size”, but grow economic activity. “Companies should look at their procurement list and determine which suppliers can be moved away from. There are lots of opportunities to find BEE suppliers.
“Once this development takes place and the economy starts growing, it creates greater opportunity for more people,” she said, adding that companies should also stop thinking only about smaller contracts and start focusing on their biggest supply needs.