Posts Tagged braod-based black economic empowerment
All companies have procurement
Posted by Cornilius in procurement on September 7th, 2009
Every company in South Africa has procurement spend. When the codes of good practice talk of procurement they include even the milk for the staff members’ tea, the paper for printing, the office fan, to mention but a few instances. More often companies tend to ignore the smaller amounts spend from their procurement calculation. This has led to some companies claiming that they are net importers and so they will not get any points under the Preferential Procurement element of the scorecard. The fact that imports are eligible exclusions from the scorecard calculation makes it sometimes even easier to score more points. Even more pleasant for a company that imports the majority of their procurement is the fact that the small amount of local procurement is likely going to be from small suppliers. The small suppliers are likely going to be EMEs (businesses with annual turnover below R5 million) or QSEs (businesses with annual turnover between R5 million and R35 million). For procuring from these businesses an entity’s spend gets an enhancement because such procurement counts under two indicators. More still, it makes the calculation of Preferential Procurement points easier to follow and also easy to get scorecards from the fewer suppliers.
Finding the competitive edge
Posted by MPUMULO MAPHOSA in BBBEE Knowledge, Marketing on June 18th, 2009
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?
Differences in interpretation
Posted by Keith in Verification on February 24th, 2009
There are now 11 SANAS accredited verification agencies, and there are about 25 different interpretations. Not only do agencies differ amongst themselves, but consultants within agencies have differing opinions.
If a business has an income of R1000, and has costs of R900, then all accountants will calculate the same profit figure – R100. Yet when it comes to verification, or even calculation of the scorecard everyone has a different way of doing things. Today, we spoke to the dti over their own method of calculation. They recognised they had made a mistake but said we were the first company ever to identify the error and complain.
The same goes for an accredited agency with whom we had a difference of interpretation. They asked us to supply a ruling from the dti, which we duly did. They also said that they had never been asked about this issue ever before.
It would be laughable if it did not involve a miscalculation of 15 points on the scorecard. Could it be that your company has received 15 points less than you deserved because your agency made a mistake/interpreted the codes differently? How come no company, other than ourselves has challenged a scorecard? Or have you challenged a score you were given? Let me know.
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