The Procedural and Operational challenge to making a success of BBBEE in the Workplace, is the Skill, Competency and Commitment of the companies Procurement Practitioners.
By Dr Ivor Blumenthal
BBBEE Consulting Practitioner
Translating BBBEE Guidelines and the Scorecard into a working model for the workplace, is unfortunately less dependent on the well-meaning, but under empowered HR Practitioner, or even the focused internal or external BBBEE Consultants who have self-declared their mastery of the subject, than it is on Procurement Practitioners at the helm of the companies supply chain. These are the Practitioners who are able to lay down the law and essentially dictate to suppliers based on a considered Policy Framework of acceptable Standards and Practices for Procurement based on the 5-or-more BBBEE Elements which constitute either the Generic or Charter-Based Scorecards with which they are expected to be more than familiar.
In plain English, if a Procurement Practitioner at any of the Technical, Operational or Professional levels of application, does not fully understand each of these BBBEE Elements, and how they must be translated into direct and measurable criteria for their own businesses, in the Industry and Sector within which their company finds itself, then they should not be placed to operate or manage Procurement practices in the company.
Procurement Practitioners need to be instrumental in developing and determining the standard of application, measurement and accountability for each BBBEE Element which is acceptable to the company when agreeing to do business, in order to procure goods or services.
This means that they have to understand how to operationalise those Elements which constitute a BBBEE Scorecard.
Whether it is in establishing the minimum standard of application acceptable of Ownership and therefore Derived Benefit? In this regard, the standard would need to reflect a directive on Employee versus Benefit Trusts and in some cases even the preference of the one over the other.
Whether it is how the notion of Employment Equity and therefore effective and acceptable representation of all races at all levels of employment and Management Practice in the company will translate into a measurable and replicable standard of practice?
How the development of the existing workforce, or the skilling of unemployed labour pools and in embracing new entrants through training, development and providing work exposure translates into a proper and demographically appealing growth in the employment profile of the business?
How New Black Entrants into the Industry will be recognised and assessed in direct proportion to the contribution being made by the Supplier under scrutiny, or the conversion of that New Entity into a Sustainable and Acceptable Supplier?
How the Supplier engages with its own Suppliers in encouraging BBBEE Compliance in-turn?
Or what would be regarded as an acceptable Social Conscience?
These are the Generic Elements which an Effective Procurement Department needs to busy itself with to be able to do its job properly with regards operationalising BBBEE in its sphere of operation.
Naturally, the BBBEE Scorecard is NOT a one-size-fits-all instrument for the entire economy. Hence there are now multiple scorecards in existence and it is the job of the Procurement Division to embrace suppliers by differentiating and segmenting them based on the Industry, the Sector and the Charter which best reflects the nature of their supply.
As a practical example, should the suppliers once segmented, fall within the Media, Advertising, Communications, PR and Digital Sector, – A “MAC Charter” Supplier i.e. an Advertising or PR Agency, a Publishing, Branding House, or a Digital Consultant or Firm in this field or even a specialised Training Provider, then the Procurement Standard encompassed within the Policy Framework for these suppliers would need not only to reference the Generic BBBEE Scorecard, but additionally add to that scorecard by talking to the “Responsible Marketing” Element contained in the MAC Scorecard and also reflect a proper understanding of what are referred to as “Third Party Expenses”.
It is only Procurement Practitioners who occupy the positions and operate at the appropriate level in a company. Where they are able to reflect the Standards for each of these BBBEE Elements which are acceptable within the context of the companies culture and preferences. The company which is calling for the quotes, Tenders and the proposals.
So, what is intended in practice for Procurement Practitioners?
The implication is that it is the Procurement Department of a company, possibly working with their counterparts from other companies within their Industry and even their sector of industries, who are expected to get together and to agree on the BBBEE standards which will generically apply to all suppliers and those which will apply to segmented suppliers in target Industries and Sectors covered by additional Charters and customised scorecards.
Moreover, it is at the discretion of the Procurement Division to dictate standards and acceptable practices and in that way play a truly transformative role in ensuring Transformation and sustainable compliance amongst their supplier base.
Suddenly the Procurement Practitioner is expected to have GRAVITAS way beyond their accounting, their financial and their supply-chain acumen. They are expected to be at the helm of more than just Procurement but rather to reflect by their daily practices, how Procurement is at the core of Broad-Based Black Economic Empowerment, Enrichment, Instrumentality and Influence, for the company, within its Industry, in-relation to affected and effecting Industries of influence.
Does this imply changing the profile of the Procurement Practitioner?
In-essence a Procurement Practitioner has always had a proportionately large influence over the destiny of Suppliers. What is now being added are Standards and Criteria which will guide such influence.
Certainly, it is true that a Procurement Practitioner needs to display a higher degree of intelligence and understanding of a variety of disciplines including finance, accounting and HR, Logistics and Supply Chain processes. This has however always been the case. All that is now being done is a proper exposition of the knowledge base always implied but seldom expressed. What becomes necessary more than anything else however, within the competency makeup of the Procurement Practitioner now, is the ability to communicate precisely and effectively. Without that, a Procurement Practitioners becomes a lame duck in a workplace which demands instrumentality from them.
The Procurement Practitioner becomes the DISRUPTOR. The ACTIVATOR. How Marvellous! How attractive the Procurement Sciences suddenly have become!