Intoweb Intranet Features

BBBEE Module:

For companies with too many suppliers, the Intoweb BBBEE modules allow your suppliers to determine their BBBEE status which can then be used to calculate the corporation's supplier BBBEE rating.

What is BBBEE?
In the years following the first democratic elections in South Africa, government has developed a number of policies that are aimed at reducing the effects of entrenched inequality. Within the business environment it was recognised that unless formal steps were taken, previously disadvantaged businesses would continue to not be able to participate effectively in economic activity. The key driver in remedying this situation was the development of a governmental preferential procurement policy whereby government ensured that certain government contracts were ring-fenced for suppliers who were, in terms of their ownership status, either totally or partially owned by Black persons. Suppliers were allocated points in terms of the degree of their compliance and would accordingly be allocated government contracts.

The emphasis on ownership created a situation of short-term and unsustainable empowerment where small groups of individuals benefited through providing Black credentials to White-owned businesses. These businesses and the individuals concerned benefited without those benefits being transferred to the broader community.

Hence there was a realisation that there needed to be a broader view of empowerment that would promote longer-term sustainability amongst communities and individuals where it was most needed.

Accordingly, BBBEE developed to include 7 core elements that are aimed at broad empowerment; these being:

• Ownership - The extent to which businesses have Black share-holding
• Management Control - The extent to which Black persons have operational and strategic control within the business
• Employment Equity - The extent to which Black persons form part of the staff of the business
• Preferential Procurement - The extent to which the business procures goods and services from other Black suppliers
• Skills Development - The extent to which expenditure is made on the training of Black employees
• Enterprise Development - The extent to which the business assists Black business development
• Corporate Social Investment - The extent to which the business assists Black community beneficiaries

An analysis of the 7 elements will show that a focus on each of these makes good business sense in the long run. The value of a BBBEE strategy is that it will provide impetus to overall business growth and development while making a significant contribution to broader social concerns.

How does it work?
When measuring the BBEE status of a business, certain scores are allocated in relation to each of the elements previously outlined. The overall score will determine the rating of the business. The rating is very significant as companies and government bodies will prefer to do business with organisations that have gained a higher BBBEE rating than others. The government has specific targets that it has set for government departments in relation to providing business to Black empowered organisations. These organisations will need to ensure that they have good scores in order to continue obtaining government business. In order to benefit their scores, these businesses will then also try to ensure that they do business with Black suppliers so that their own score is enhanced. Ultimately a domino-effect develops where the effects of BBBEE are felt throughout the broad business community and society.