16 Feb Print clients and the industry benefit from B-BBEE
In a recent opinion piece on B-BBEE, columnist and entrepreneur KK Diaz points to an unexpected connection between innovation, success and BEE:
“Highly successful corporate players like Firstrand…have grown their B-BBEE ratings to Level 2. This doesn’t happen by accident. It happens because these organisations are committed – strategically and practically – to B-BBEE. Is it a co-incidence that FNB was voted the world’s most innovative bank in 2013? I don’t think so.”
Taking that connection one step further, Point believes that B-BBEE can be strategically used to improve performance in key areas, including a highly evolved procurement system (supplier/enterprise development) and community development.
The challenges for BWO and EME printers
The single biggest obstacle to Black-Women-Owned (BWO)/Exempt Micro-Enterprise (EME) printers is access to clients, says Point MD Anthony Swart:
“There are thousands of printers in the market, all trying to find the correct marketing person to approach. Print projects come along infrequently in individual departments, the marketing people change, and they don’t have the time or technical knowhow to vet the capability or credentials of a new printer, so they go with those they know.”
The challenges for clients requiring printers
The major challenge for corporates is meeting their B-BBEE obligations in line with the new codes. And, while doing so may be the ‘right’ thing to do, it’s also the difficult thing to do in uncharted territory, without a seasoned captain at the helm.
Corporates need to determine which suppliers can truly deliver, in the absence of a yardstick for measuring capability and without an industry-wide vetting agency. Even having the right B-BBEE credentials does not necessarily indicate the supplier’s ability to deliver print within the time and of the quality expected by the client.
And yet, the possibilities appear to be endless
So the challenges are significant. But so is the potential. After all, properly managed print procurement speaks to the possibility of greater company and industry success.
Here’s what Point is doing to realise that possibility:
Fulfilling client’s procurement policies
Point goes beyond assisting clients in managing a BEE-savvy balance. It’s also about actualising the client’s procurement policy in real terms, by placing work with small, up-and-coming andappropriate suppliers. Clients get delivery on their needs and policy, while providing a channel for the development of new suppliers.
A totally different level of data
Says Davies, “Point’s systems and their reporting transparency allow us to report on BEE spend specific to BWO or EME; percentages; types of jobs, etc. This offers unbelievable insight into what was before quite a mundane print buying activity.”
Pass-through spend reporting
The correct practice is for a company to claim the supplier rating on the job value and the points rating on the fee value: ‘pass-through spend’ reporting. In short, compliance means accessing the correct printers and then reporting correctly.
This means giving perfect clarity on where the money goes. “Imagine”, says Swart, “if Point appointed a Level 8 supplier to print a job and allowed the client to claim Point’s Level 3 rating against the whole job value. That could be seen as fronting”.
Let’s say Point procures a job for a client and charges the client R100. The client shouldn’t report the R100 spend against Point’s BEE level. Instead, because Point is an agent, the spend should be accounted for as: R98 (job cost from supplier) spend against the print supplier’s BEE level and R2 (Point management fee) spend against Point’s BEE level. In this way, spend is ‘passed through’ to the supplier.
Creating panels of smaller printers
Point is able to segment the production process according to the elements that make up a large campaign. By giving some of the jobs to a smaller operation and managing the entire process for the client, says Davies, Point “enables small businesses to effectively deliver work that historically sat with larger operations.”
What’s more, Point looks at each case on its merits and is able to introduce a printer to a print panel without the prejudice of race/personality.
Keeping the industry healthy
The true objective of the BEE codes is the development and support of BEE businesses, explains Tanya Reddy, Point COO, “Yes, we’re empowering suppliers that do not have the resources or size to access bigger printing jobs, but we’re also encouraging clients to become more BEE-compliant. We’re balancing the industry.”
At the same time, Point is constantly scouring the market for up-and-comers – looking for small BWO and EME printers who demonstrate the same progressiveness, proactivity, efficiency and proficiency that we ourselves value.
Davies says, “It is actually easier for Point to introduce BWO/EME printers into large corporates than it is for them to try to do it themselves.” In short, Point makes it possible for smaller businesses to enter a higher level of economic activity while improving the quality of their service. At the same time, compliance with the B-BBEE codes becomes more feasible and more easily achievable for larger companies.