The customer is king! Every business owner knows that their customers are ultimately their boss. Although a cliche, the reality is exactly that, the customer can dictate the products, services and even sometimes the price they are prepared to pay. If the customer isn’t happy then they have the choice of many alternative suppliers.
Employees in businesses know that they need to meet customer expectations, manager’s KPIs include complaints/compliments from customers and sales people treat potential customers like gold.
On a slight tangent, BBBEE has been one of the biggest drivers of ownership transactions. Normally a business would only be sold if the owner were retiring or wanted to do something different. As a direct result of the BEE legislation business owners realised Black Ownership was valuable to customers and in-order to increase their own businesses value decided to incorporate an element of Black Ownership.
Ownership deal makers, lawyers, bankers and even the business owners themselves were happy about this, considering it gave everyone business and caused the economy to grow.
The reality for many businesses is that their business became more attractive to their customers and as a result a potentially expensive, stressful and disrupting activity was implemented for many, many businesses.
The Amended Codes have now changed the rules. As a result the game is played differently. In some cases similarly, others completely differently and without a doubt the biggest impacts will be felt on the procurement element.
Similarly to BEE driving ownership initially, the Amended Codes is going to be a major driver to encourage customers to change suppliers.
An old level 4, new level 6–8 scorecard might not to be suitable to customers. They have higher targets to reach, they have their own customers to please and in some instances even government officials.
The reality is the big banks, telecommunications companies, retailers, construction companies have chosen to become BEE compliant. They need to: their licenses, tenders, government concessions depend on their BEE status. Many companies want to apply for government grants, and incentives like manufacturing incentives. This requires a level 4.
We are seeing that the types of companies mentioned above are doing whatever it takes to become compliant. It is more difficult for them so they are beginning to put more pressure on their suppliers to comply. As tough as it sounds they will change suppliers if their existing supplier is not compliant. We have seen businesses change suppliers as a direct result of a poor BEE scorecard. If they cannot find any supplier for a unique product, they will work with whomever they can to create a new business that is compliant to compete with existing suppliers that are not compliant. The Supplier Development element is designed to achieve exactly this – we have seen businesses invest in others specifically so that they can supply them.
The huge interest in our supplier day sessions is testimony to the pressure that the big corporates out there find themselves in.
Procurement has a cascading effect. Even if your customer is not one of the companies that needs a certificate, they may do work for another company that does and therefore needs a satisfactory BEE certificate. In the end almost every business who supplies another business will need a certificate.
It is never nice for a company to change suppliers: the customer is invariably satisfied with the supplier, and would like the relationship to continue. In today’s environment the customer is going to put pressure on their suppliers, but at some point is going to change, and you will lose business.
As difficult as the Amended Codes are, it is still possible to remain, or become compliant. Levels 1,2,3 or 4 could be difficult, but not impossible. Lower levels, even level 8 will often be satisfactory to your customer.Anything worse, or a straight refusal will be bad for business.
Our business like any other business is geared towards helping our customers. We know that the pressure to become compliant is only going to increase. We also know that if you want to become compliant using the amended codes you need to start now! The days of appointing a verification agency to come and see what has been done are over because you will quite certainly be non-compliant. Join us on a half day workshop and combine that with our newly updated EconoBEE V4 or contact us on 011 483 1190 to assist you further.
EconoBEE is extremely well known in the BEE industry, however we have much more to offer our clients which we don’t talk about nearly as much.
Implementing elements on the BEE scorecard is particularly daunting. Large amounts of money need to be spent, properly. It needs to be logged correctly, allocated in a way that makes perfect sense and most importantly you need to earn the points.
We have various solutions designed to assist our clients:-
Employment Equity and Skills Development – Human Resources Management.
Entrepreneurial Enterprise Development
Preferential Procurement – Save Time by using the BEE Procured database containing over 60 000 BEE Certificates. Managed Service: Our consultants can phone your suppliers for a BEE certificate – Managed Service.
While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…
09 July 2015
In this issue
- The Customer is King
- Value Adding Services
EconoBEE is an expert BEE consultancy. EconoBEE helps businesses Become BEE Compliant, prepare for verification, earn maximum BEE Points and ensure that they achieve the BEE Level they need to get more business.
Our services include BEE Management Systems, Training, EME Pack, Complete Managed Services, consulting and advisory and Procurement Solutions.
As leaders in the industry we are driven to help maintain and develop knowledge in the BEE industry.
Already have a BEE Certificate
Please send it to us and we will include it in our BEE Procured database.
Tel: 011 483 1190
Fax: 011 483 1195
We know how useful our newsletters are but you needn’t wait for our newsletters – follow us on Twitter, connect with us on Facebook or stay well informed by reading our BEE Blog.
Know someone who might be interested in this email? Why not forward this email to them using [forward].