Page 14 - KZN Business Sense 3.6

KZN

KwaZulu-Natal
Business Chambers Council
BBBEE CASE STUDY – FROM LEVEL 8 TO LEVEL 1

Vash Singh, 2007 Codes of Good Practice 2013 Codes of Good Practice
Managing
Director –
Xcelerate
Verication Elements Points Actual Elements Points Actual
Agency
(formerly
Izikhulu BEE Ownership 23 22.00 Ownership 25 25.00
Ratings)
Management Control 11 10.00 Management 19 14.25

Employment Equity 18 15.17 Control
ince S Skills Development 15 1.23 Skills Development 25 0.35

the new BBBEE codes have been
used to assess companies on their Preferential 20 17.99 Enterprise and
scorecard, many are unfortunately Procurement
nding themselves either non- Supplier 44 11.38
compliant or at very low levels Development
i.e. Level 7 or 8. is arises Enterprise Development 15 20
mainly due to limited pro-active
addressing of the amended
requirements within the Socio-Economic 5 5.00 Socio-Economic 5 5.00
company’s nancial year, Development Development
especially for the signicant
points (63% of scorecard points)
in the last three elements, which Total 107 86.39 Total 118 55.98
must be executed in the nancial
year of assessment. For example,
a verication at this stage will dierent outcome achieved. e with Black Owned Qualifying were applied. e switching was December 2017 and February
use a February 2017 nancial key actions are listed below: Small Enterprises (QSEs) and done in September, hence 2018 nancial year-ends should
period, hence the required Exempted Micro Enterprises converted to Socio-Economic apply a similar approach to
skills development, preferential Skills Development (EMEs) and use of rst-time Development (SD) beneciary achieve better BEE levels in their
procurement, enterprise suppliers and three jobs created (two next certification exercise. All
development, supplier • Specialised service provider bonus points) those in the construction,
development and socio-economic arranged for the targeted • Training of procurement staff to transport, agriculture and
development should have been number of learnerships to score implement BEE requirements • Continued with early payment nancial services industries must
done from 01 March 2016 – 28 optimal points, viz: throughout the year, identify terms with historic suppliers, take heed of these specic sector
February 2017. valid vs invalid certicates and but implemented loans and codes being nalised at any stage
o O-site and on-site amend procurement process skills development to meet now, hence your next rating will
To demonstrate the power of learnerships targets most probably be done against the
this approach, I have included a o Disabled and able-bodied • Supplier workshops and surveys amended sector codes.
case study of a client of ours who o Mix of race and gender to held to inform of the new • ED/SD Agreements and BEE
took the necessary steps and meet demographics legislation and request 3-year certicates completed upfront, Xcelerate Verification Agency assists
companies with understanding and
achieved a Level 1 on the Generic o Mainly nance, business and scorecard /empowering supplier and records maintained for tracking on the new BBBEE Codes.
scorecard with just working administrative-related plans from key suppliers – these initiatives. T: 0861 505 555
eectively on two elements. If no future proofs procurement info@xcelbee.co.za
action was taken, the client would • Disabled staff boosted scoring e end result was a signicant www.xcelbee.co.za
have scored a Level 8! Management Control by two increase in points to a Level 1.
points • Identification of Enterprise is demonstrates the importance
To start, the table that follows, Development (ED) beneciary of understanding scorecard
shows the results of the baseline • Will allow company to score who would replace existing requirements and implementing
assessment of this client. We some/all of ve bonus points in security company – skills when it counts. At this stage of
inserted their 2016 Old Codes the subsequent rating development and direct costs the year, all companies with
assessment results into the New
Codes scorecard which • Specific training held for a 2013 Codes of Good Practice
demonstrated that, if the company group of unemployed students
did not do anything dierent, they according to demographics, and
would move from having a 2007 declarations/IDs/training Elements Points No action taken Specific action taken
Codes certicate of Level 2 (85 – register maintained as records.
100 points) to 2013 Codes Ownership 25 25.00 25.00
certicate of a Level 8 in their next Enterprise & Supplier
rating. e 2013 Codes have a new Development Management Control 19 14.25 16.25
concept of Priority Elements —
since 40% of the points were not • Analysis of Procurement: Skills Development 25 0.35 17.85
obtained for two of the three
Priority Elements (Skills o Specic drive to obtain as
Development and Enterprise & many valid BEE certicates as Enterprise ans Supplier
Supplier Development), the client possible Development 44 11.38 36.60
drops from a Level 7 (55 – 70 o Where applicable, suppliers
points) to a Level 8. were sent adavit formats to
complete and submit Socio-Economic
ere are numerous reasons for o Identication and actioning 5 5.00 5.00
the drop, however the focus of this of supplier switching Development
article is on how the client made opportunities to address
a concerted eort on the two shortfall Total 55.98 100.70
Priority Elements, and the o Signing of 3-year contracts 118

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