Archive for category Marketing
The PIC has now stated that they are unhappy with the ArcelorMittal deal. They specifically ask why the BEE deal was not broad-based. See http://www.businessday.co.za/articles/Content.aspx?id=122763.
We were the first BEE Consultancy to express reservations about the deal, by calculating the number of points that AM would earn via the deal. Our concern then, and now is AM chose to call this a broad-based deal when it hardly earned 5 points on the scorecard. They had various clauses in their deal that were unenforceable, showing really poor knowledge of B-BBEE and the codes. At one point they have stated that after the deal is completed they will call in a verification agency to evaluate their BEE score. Our view has always been that you evaluate your score BEFORE doing the deal, and getting a verification agency only to verify the points earned. You never call in a verification agency to help you see how many points you have earned, AFTER the deal. It is obvious that the deal was never intended to be broad-based.
At the same time we have noticed that some government departments are using the B-BBEE level as a criterion for awarding grants. We have recently asked the Public Protector to investigate why government departments, organs of state and public enterprises invariably do not use B-BBEE as a criteria in doing business. There now seems to be a distinct trend to slowly using B-BBEE principles, which we sincerely welcome.
We believe that this new approach to empowerment is going to remove a lot of the negativity around BEE, and ensure that the right people benefit, in the right way.
Getting and customers and keeping them and making profits is as important to us as anyone. We received a request from a client to produce their EME documentation. As part of the process we ask the client to supply their turnover and industry. It turned out at the client is in the built environment (the generic term for quantity surveyors, architects and other professionals involved in the construction industry, but not construction itself).
The EME threshold for EMEs in the built environment is not R5 million, but R1.5 million. We had to go back to the client to confirm that their turnover is this case was below R1.5million, which it was not. The client was still quite keen for us to produce the documentation, but we knew that this was wrong, and explained the new situation to the client – that it would have to produce a scorecard and get it verified based on the construction sector codes. We obviously agreed to refund any monies paid to us, but would hope that the client would return in the near future to attend a training course or ask for consulting to help build up their scorecard.
Sometimes journalists annoy me! There is a story on ITweb (http://www.itweb.co.za/index.php?option=com_content&view=article&id=34554:telkoms-empowerment-shrinks&catid=118&Itemid=66) discussing Telkom’s empowerment credentials. Their one big empowerment investor, The Elephant Consortium has sold its shares. The headline of the story is “Telkom’s empowerment shrinks.”
Now, most journalists spend their time moaning about these ownership deals, and criticising the enrichment of some people. Yet, when an opportunity presents itself, the journalist chooses to put a negative spin onto the fact that Telkom has lost some of its black shareholding. One would think this is a good opportunity to suggest that Telkom spend more time, effort and money on the other 6 elements.
In the meantime the journalist did not analyze the affect on the Telkom scorecard of this sales of shares: Since the consortium owned shares for 5 years, the recognition of ownership after loss or sale of shares comes into place. Their scorecard will not be too badly harmed. In any event they only earned 15.39 points on ownership, out of 73.21 points. It will be very easy for Telkom to remain a level 4 company. They only earned 5.3 points on ED, so achieving full marks on ED will automatically help them reach level 4, despite losing all ownership points, which will not happen anyway.
A better approach by the journalist could have been – “New enterprise development opportunity for small IT firms looms now that Telkom has to make up points lost on the sales of shares!!”.
Most people know that if their annual turnover is less than R5million then they are classed as an EME – exempt micro enterprise. They believe that they are exempt from BEE and do not need to take any action. They hope that their customer will recognize them as being exempt and that they will win the business they want.
This is unfortunately not true. An EME is generally, but not always a business with a turnover of less than R5million. Some industries, e.g construction have changed those thresholds.
More importantly it is not sufficient to tell your customer that you are exempt or expect them to guess!
You need to tell your customer why you are an EME, and you need to prove this, usually by means of an auditors letter/certificate.
Why use EconoBEE? We will help phrase the document/letter you need to send your customer. We help explain to your customer why you are exempt and how it will assist your customer in continuing to do business with you.
Most importantly, we will talk to your customer if he is not satisfied and give him all the documentation he needs to convince him that you have given him the right information. There has been the odd occasion that a company has rejected our EME pack. In all cases, we work on the side of our client to convince the customer to change his mind. In every single case we have won the legal issue, and satisfied the customer.
We know of businesses that have tried to explain their EME status to their customer, failed to convince them and lost the business. It won’t happen with us. We will satisfy and convince your customer!
Our BEE Procured system is now working. We are using it for clients and it is saving us many hours or work. Basically it is a web based system that allows you to upload your procurement spend by suppliers and then lookup/link to that supplier’s master record. If there is a scorecard it automatically calculates your BEE procurement BEE score. If not, it still links to the record and automatically recalculates when/if a scorecard if uploaded.
As we get more and more scorecards, the entire procurement process will take minutes, rather than months.
- No more calling hundreds of suppliers for scorecards,
- No more capturing and calculating your procurement score.
Furthermore the system easily allows you to determine which suppliers are letting you down and how you can improve your procurement score.
remember that procurement for QSEs is worth 25 points and 20 points for generics.
The system is licensed on an annual basis for R2500 per annum, but you can try it out at no cost for your first 15 suppliers. Visit www.beeprocured.co.za
EconoBEE to hold a Sustainable Development Conference in October/November 2009.
Introducing the first EconoBEE Practical Sustainability, Reporting and Business Conference, presented in conjunction with Kulima Solutions, which will highlight the opportunities for your business to embrace the goals of sustainability. This introductory course will include an overview of the key concepts of sustainability.
Sustainable Development and reporting on sustainable development is becoming more and more important to businesses.
The aim of any business is to generate sustainable profits. The goal of sustainability is to achieve this while also minimising adverse impacts on society and the environment. Corporate Social Responsibility initiatives form part of a larger strategy of sustainability.
The key outcome of the course will be a roadmap for developing strategies and implementation plans for sustainability within your business.
This conference will help you identify opportunities for your business by making Business Sense out of Sustainable Development.
Key areas such as the Global Reporting Initiative (GRI), AA1000 and the JSE Socially Responsible Investment Index (SRI) will be covered in a practical manner.
The key speakers and presenters are Katharine Vincent (PhD) and Tracy Cull BA SocSci (Hons) who have extensive experience in sustainable development and corporate social investment, both in a practical environment and academically. Keith Levenstein, CEO of EconoBEE, who is currently responsible for designing a system to measure the effectiveness of sustainable development activities in businesses.
The two day conference will be presented at Gallagher Estate in Midrand, at Makaranga Garden Lodge in Durban and Belmont Conference Centre in Cape Town.
EconoBEE Announces the Launch of BEE Procured.
BEE Procurement accounts for 20 points on the broad based BEE scorecard. Points are the by purchasing from suitable supplies who themselves are BEE compliant, and have a BEE scorecard. The score depends on the type of supplier (size, percentage black ownership) as well as other technical aspects, such as a concept called value adding supplier. “It is important to take all aspects into accounts in order to maximize procurement points earned” explained Keith Levenstein CEO of EconoBEE.
Procurement is one element of the codes that does not have a specific target of spend. There is effectively no cost to the company to earn procurement points, unlike, for example, skills development where the company needs to spend 3% of its payroll to earn points. The difference though is procurement is quite an admin intensive task, and if done incorrectly will cost the company many points.
EconoBEE produced BEE Procured as a cost effective solution to the admin issue.
BEE Procured is a complete system that contains a database that with many thousands of valid scorecards, saving the company from having to call all its suppliers to get scorecard.. The database correctly analyses the scorecard to ensure that any points earn are maximized. BEE Procured goes even further. It allows the company to capture, or even import the names of their suppliers and the value of spend with the supplier. Using Link Technology BEE Procured then allows the company to quickly find valid scorecards for each of its suppliers. BEE Procured automatically and instantly calculates the points earned for its procurement.
If there is no scorecard for that supplier, BEE Procured will attempt to contact the supplier and obtain his BEE scorecard or certificate. Once obtained, the system will automatically take the updated scorecard into account and recalculate the points earned.
Many companies see procurement as an insurmountable admin issue and often ignore procurement or lose points. BEE Procured will typically decrease the time and effort to do procurement by up to 80%.
Msizi of Mabuya Glass Merchants has now made a few sales after our newsletter talked about his business and the glass white boards.
It is really a great feeling to walk into the office and look over at the fax machine and see orders.
In addition to helping Msizi our business will earn points. A real win win.
Mabuya Glass Merchants is one of the businesses we help – not because we have to but because we want to. Msizi Ngwenwa is a running mate of mine – (Comrades silver medalist). He is a glazier, and knows all about glass. He tried very hard to get into the building trade, but due to the competition, and lack of cash flow and expertise he never really succeeded, but he has still not given up.
Some time back we needed a whiteboard for our training room, but do not like the standard boards as they tend to stain, and the ink never really rubs out. Instead we asked Msizi to install a glass white board on our wall, and it works perfectly and looks really good. We can write on it with any marker pen, and a bit of windowlene is all that is needed to clean it. We started discussing ideas for Msizi around producing glass whiteboards. We have assisted him with equipment and he has now started production of glass boards: They are beautifully framed in aluminum and can easily be mounted by a DIYer on your wall. It is the most useful piece of office equipment we have.
Msizi is working very hard on the quality of his framed white board – and quality is still a problem, but Msizi wil not rest until he has produced “the Rolls Royce” of glass white boards.
We purchased his first board and our staff love it.
Our role has been a bit of finance for equipment and we have purchased all his “mistakes” which is good enough to us to use perfectly well. We also help him with his accounts, marketing and most of all we are a shoulder to lean on and able to help him with brain-storming. In a few years his product could well become a well-known brand.
Mabuya Glass Merchants is currently producing trial aluminum framed glass boards 80 cm by 60 cm at a price of R299 (excluding packing and shipping and installation which any DIYer can easily do). The size is perfect for every office. I’d love to take orders for him while he perfects his quality. Take this opportunity to support his enterprise, earn BEE points but more importantly help his business thrive.
We have obviously earned both enterprise development points and procurement points from our positive relationship with Msizi (he is level 3 and is a category A enterprise development beneficiary) so there is enhanced recognition on both our ED scorecard and procurement scorecard so we have great BEE benefits.
Moreover Msizi, is about to finally and able to reach his dream of running a sustainable business. He is not a “bigwig”, not being enriched, just a South African who cares and is beginning to feel good about himself. So do we! This is what true B-BBEE is all about!
The link between Enterprise Development (Mabuya Glass Merchants) and procurement (buying glass white boards) works very well, to find out more attend our Procurement and Enterprise Development conference.
Contact EconoBEE on 0861 11 3094 or firstname.lastname@example.org or Msizi Ngwenwa on 072 263 0130 for more info.
Given the priority of staying as competitive as possible, companies need to exploit all existing opportunity channels. This requires a knowledge and understanding of possible environmental impacts on your business.
In the South African business environment, BEE compliance plays a significant role particularly to those companies dealing at a business-to-business level. Your clients will require you to produce evidence of your BEE compliance status, without which they will opt to do business with your rival.
How do you address this problem? One of the largest sources of competitiveness is a customer-needs driven approach. Identifying and satisfying your clients’ needs provides the necessary competitive edge. Therefore, getting the proper BEE documents is not a choice for those companies with such clients who require such evidence. In such a scenario, a company’s competitiveness is based to an extent on its BEE score.
Therefore, how competitive is your business without evidence of its BEE status, in a market where such evidence is held with high regard?