THE TIME FOR BLACK BUSINESS IS NOW!!! (SUPPLIER DEVELOPMENT AND BBBEE PERSPECTIVE)
Currently many white-owned businesses look at the impact of the new BBBEE codes and how they can meet the minimum criteria to optimize their BBBEE levels. It is believed that most white-owned businesses will drop at least 2 levels. This means that if a business was a level 4 that it will now fall to a level 6. The saddest part is that black business fail to see and respond to this huge opportunity.
Apart from the falling of BBBEE levels, these are some of the challenges / threats that are been faced by white-owned businesses:
• The levels of current (existing) suppliers they use will drop
• Lack of a supply base of Black Suppliers & SMME’s
• The identification & sourcing of Black Suppliers & SMME’s
• 80% of their procurement bill to be spend on “BEE” Suppliers
• Directing their spend to black-owned and black women-owned suppliers
• Direction of the Spend
• Developmental and capacity issues of Black Suppliers
• ESD is only a small component of the 40 points
• Lack of a procurement & ESD strategy & knowledge
• Staff that lacks sourcing and diversity training
• 80% of their spend is with core strategic suppliers
• Not meeting targets
What is a challenge for others is an opportunity for others. As a business linkage specialist to Black Suppliers we are concerned that black businesses and associations fail to see the emerging opportunity presented by the changes to the BBBEE landscape. Black Businesses and Associations fail to respond in exploiting these challenges and responding to these opportunities whilst enjoying improved BBBEE levels (from a level 3 to a level 1). This is a huge opportunity for black business against the backdrop of government’s enabling environment they create for black businesses. The enabling environment includes an increase in tender values for the different preferential procurement point systems (90/10 & 80/20) and the 30% set aside for designated groups.
My university professor asked me when I did a SWOT analysis for him during a case study: SO WHAT? I learned very quickly it is not in knowing but how we respond to this knowledge. White-owned businesses realize they are not going to win tenders or meet BBBEE targets and levels if they are not addressing these challenges. The contrary is HOW DO WE RESPOND as Black Suppliers?
I plan to unpack these issues regularly in my blog in preparing your company to respond to the emerging opportunities for black suppliers.