10 Steps to Empowerment – Newsletter September 2007

How to Speed up the Slow Pace of Transformation

There has been a fair amount of talk these days around speeding up BEE and how to improve BEE compliancy amongst businesses. A number of surveys have been done which all seem to have the same conclusion. 

The reason given in the survey for the slow pace is:

  1. Confusion and lack of true knowledge around BEE

  2. Fear of implementing BEE

  3. Excessive costs and confusion around the verification process

1) The dti has been slow in explaining how BEE works, the benefits of BEE and how to implement it correctly. Companies have been using multiple excuses to not implement BEE – lack of clarity, the complication of charters, government’s own procurement polices to name a few.

The solution is to understand BEE properly.

2) BBBEE need not be an expensive long term project that is extremely difficult to participate in. The BEE Codes of Good Practice allows all companies the opportunity of becoming compliant and get additional business from government and many corporates.

The solution is to recognise that your company can become BEE compliant without re-engineering it completely. Start with the elements in your business that you are already doing – you may be pleasantly surprised to see how compliant you are already, and easily find ways to become more compliant.

3) Rating agencies are charging large sums of money for an “un-accredited” scorecard (no agencies have been accredited). SANAS have been slow in accrediting rating agencies, and this is causing unnecessary aggravation.

The solution is to start by doing your own self-rating to get an idea of where you stand, and continually refine your scorecard. Tell your customers what you are doing and how you are progressing. A simple certificate states only your score and tells your customer very little about your BEE status or where you are going towards true empowerment. When companies understand how BEE works they should prepare a self rating and collate all the required documentation that may be required if they choose to get a verified scorecard. By being prepared should also reduce fees of auditing your scorecard.

Therefore BEE is moving slowly because companies don’t know what is acceptable and they are basing their decisions on multiple contradictory standards. Un-accredited verification agencies are charging based on company size (not work done). Education around the BEE Scorecard is not done by the dti who prefers to let the market manage this important task. Fortunately we are in business!

What then should your business do? We have prepared a simple 10 step process which should help you start and finish in the right place and help you comply with BEE as per the best business practices.

EconoBEE’s 10 Steps to BEE Compliance

Smart businesses recognise the need for BEE, the really smart businesses have started to implement BEE and take advantage of the business opportunities within BEE.
We have prepared the 10 most important steps a business needs to take in order to best implement BEE.

  1. Learn about BEE

  2. Look at where BEE is likely to affect you

  3. Look at the indicators to find ways of scoring points

  4. Collect documents around the indicators where points can be scored

  5. Do a rough calculation to find out how many points you have achieved

  6. Look for ways to find more points on the scorecard

  7. Spend time and effort and earn the points

  8. Do a final self rating – must be signed once you are completely happy with it

  9. Write a report, Scorecard, Profiles, Policies and Strategies around BEE and display your scorecard level

  10. Not mandatory – get an independent organisation to sign off your scorecard (Auditors or Rating Agencies) 

Follow these steps and you will be well on your way to earning points on your scorecard and making your company BEE compliant. 

As a guide read the following principles to make sure your business becomes BEE compliant to it fullest extent and in the most cost effective way.

a) EME’s don’t need a rating in any way, they can get a letter from an auditing company or equivalent and sign it off. Proof of turnover is all that is required and should be displayed on a nice document that also explains to their customers in a simplified way how compliant they are and how they should be treated as an EME to their customers.

b) The same applies to QSE’s and even Generic companies, a self rated scorecard is acceptable according to the BEE codes. The self rating also gives you the knowledge to improve on your BEE scorecard, answer your customers questions with confidence and give you an opportunity to update it on and when things change. This also gives your company the freedom to explore future BEE deals without the use of a consultant.

c) Most companies recognize that BEE implementation has been moving slowly which is why when they see a supplier make an effort at complying with BEE they are assured that the supplier is committed to BEE.

d) When dealing with customers about BEE you should always use the BEE Codes of Good Practice as the guideline. You are always welcome to quote paragraphs from the BEE codes. Explain what you have done in a nice friendly manner and don’t let your customer feel that BEE is not a priority to your company.

e) Always reply to supplier assessment forms. By not answering them you are throwing business away. The ideal response is again based on the BEE codes, give your customer an accurate scorecard that has been updated to include all the latest business deals in your company.

f) A BEE Strategy is one of the most valuable documents your business needs. It should clearly outline the potential that your business has to improve on its BEE Scorecard. I know of one corporate that only asked for a strategy instead of a scorecard. They realize that BEE compliance is a long term goal and needs to be dealt with in small bite size stages.

g) Let your BEE intentions be known to all customers who could potentially ask you for your BEE status. A positive response even with a low score could result in more business.

h) The fundamental principle around BEE implementation is that BEE deals must always make business sense. The very simple reason we are in business is to make a profit and opportunities do exist around BEE that could increase the size of your business tremendously.

Finally, I believe that for BEE to work, the scorecard needs to be as easy as possible. Companies need to see how it affects them and improve on it and finally they need to not be forced into any unnecessary costs. Companies need to read through the BEE codes, ask experts for advice, have common myths explained and finally comply with BEE.

EconoBEE’s Seminars in Johannesburg, Cape Town and Durban

The seminar is a highly informative valuable course that helps companies learn about BEE, but more importantly goes though the scorecard and how to earn points on the scorecard. We have templates of other valuable documents that will help companies earn all 100 points in a highly effective way. The course material has been designed and then redesigned to give the optimum benefit to the delegates. Our handouts contain all the course material as well as useful documents and easy to use record keeping forms which can then be used practically inside any business.

Through out the seminar we emphasise the business side of BEE, making sure that you are earning maximum points in the best way and helping you give your customers and potential customers a response which often turns into more business.

Details can be found on our website or contact us on 0861 11 3094 or info@econobee.co.za.

Enterprise Development (ED)

ED is worth 15 or 25 points on your scorecard, and is one element that is easy to implement and if managed properly can be very profitable to your company – develop existing markets and open new markets, and even yield a return on your investment. Dinoka Group, our holding company is able to assist you in your enterprise development projects. Nhlanhla Damoyi is available to assist you. Call him on 011 483 1190.

A Final Comment

The Victory Theatre has recently re-opened across the road from our Johannesburg offices. To celebrate Gavin’s birthday we attended a performance of Africa Umoja and enjoyed dinner at the restaurant. I highly recommend both the show and the dinner experience.

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