Enterprise and supplier development (ESD) is a priority element of the BBBEE scorecard. When properly executed, it has the potential not only to give scorecard leverage but also the opportunity to earn the much-needed bonus points on offer within this element.

The greatest risk factor in the roll-out of an ESD programme is a disconnected sponsor and beneficiary partnership. Hence, the key challenges include how does a sponsor ensure their ESD partnership remains connected? What are the elements of risk that make ESD partners disengage? And how are these risks addressed and managed?

Phase 1 – Inception and planning
De-risk considerations: Communication, commitment, consistency
This phase represents the foundation of any successful ESD programme. It addresses commitment and communication, which should involve the entire organisation on a continual basis to ensure there is a holistic buy-in to the process.

Communication should include who the ESD beneficiary is; how they link to the business; why the beneficiary was chosen; and what the desired outcome is.

This level of open commitment from the entire organisation – both in words and actions – adds considerable impetus and weight to an ESD partnership and programme. Further, it has the potential to drive the right behaviours from beneficiaries.

Phase 2 – Programme execution
De-risk considerations: Supply chain linkage, SME sourcing, selection and support
This phase is critical as there are so many moving parts. It is imperative that each part has the right mix of people and resources in order to ensure the job is done.

Sourcing the appropriate ESD beneficiary, providing them with the right level of support, and internal participation to accrue the right quantum of benefits is vital. When using external service providers and business development specialists, it is imperative that care is taken to ensure that you collectively represent a cogent, well-oiled and customised solution.

Any misinterpretation in this area could create an imbalance, which may lead to the onset of the partnership disintegrating.

Phase 3 – Business impact and BBBEE points realisation
De-risk considerations: Key performance indicators (KPIs) and supply chain alignment
In creating a win-win situation, both parties must reap rewards. The beneficiary business has to develop and grow, while the host organisation must realise a positive business impact to its supply chain and collective business model, as well as attain optimal points on their scorecard.

Aligning ESD programmes with KPIs and proper business measurements during all phases will ensure consistent alignment between the host organisation, beneficiary and the programme itself.

Putting such measures in place will further allow consistent evaluation that, in turn, will provide a level of assurance that either an ESD partnership is progressing according to plan or highlight ‘red-flag’ areas to be addressed.

How does The Business Lab assist corporates with ESD?
We guarantee your ESD points
Our robust processes and procedures guarantee you earn (ESD) points on your BBBEE scorecard.

Empowered suppliers aligned to business
Your ESD spend in small businesses with fewer financial, resource and compliance risks aligns with your supply chain in a seamless and business-as-usual manner.

Sustainability
You get to do work with professionally run small businesses with sustainable futures, all managed in a watertight ESD programme for optimal impact and business results.

Tel: +27 (0)10 003 7466
Email: [email protected]
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