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Enterprise and supplier development (ESD) is the part of the B-BBEE scorecard that recognises measured companies for buying from, and helping to grow, black-owned suppliers and small businesses. Training is one of the most practical forms of that support, because it builds the skills suppliers need to price, tender, manage contracts and keep sound financial records. BOTI runs this kind of training for supplier groups and procurement teams, and you can find the relevant short courses in our B-BBEE, strategy, governance and compliance courses.
Under the revised B-BBEE Codes, ESD brings together several related activities: preferential procurement, supplier diversity, supplier development and enterprise development. Each one treats small and black-owned businesses as part of a company’s growth plan, not only as a compliance exercise.
How preferential procurement, supplier development and enterprise development fit together
It helps to separate the three main activities, because each one is planned, measured and evidenced differently.
- Preferential procurement looks at where your money goes: how much of your spend goes to B-BBEE compliant suppliers, and in particular to black-owned and smaller suppliers.
- Supplier development is support for suppliers who already sell to you, or who could, so that they become more reliable, competitive and better able to grow with you.
- Enterprise development is support for small, medium and micro enterprises (SMMEs) more broadly, helping them become sustainable and enter competitive markets.
How each contribution is recognised depends on the Codes that apply to your business, including any sector code, and on how your verification agency assesses your evidence. For a plain overview of the scorecard elements, read our guide to the B-BBEE scorecard.
Supplier Development: A Strategic Imperative
Supplier development improves the performance of specific suppliers, which in turn gives the buying organisation better value. Done well, it does more than support your B-BBEE position. It also improves suppliers’ business processes, the quality of their products and services, and how efficiently they deliver. Typical support includes mentorship, training and access to finance, with a focus on making black-owned enterprises more competitive.
In practice, the suppliers who benefit most are those whose gaps are clear. Some quote too low and run out of cash. Some lose tenders because their submissions are incomplete. Others struggle to meet the terms of a contract once they win it. Targeted training on these specific problems usually achieves more than a general business course.
Enterprise Development: Cultivating Growth and Integration of Small, Medium and Micro Enterprises (SMMEs) into Competitive Markets
Enterprise development shares the aims of supplier development but casts a wider net. It helps SMMEs grow and compete in mainstream markets, which builds a more resilient and inclusive economy. A mix of financial and non-financial support helps black-owned businesses grow and contribute to the wider economy. Non-financial support includes training, mentoring and access to business skills.
ESD and skills development are separate scorecard elements
Companies often confuse ESD with the skills development element, because both can involve training. Skills development is about training your own employees and other black people. Under the amended generic Codes, its overall target is 6% of the leviable amount: 3.5% on learning programmes for black people and 2.5% on bursaries for black students at higher education institutions, plus a further 0.3% for black employees with disabilities[1]. Sector codes may set different targets. Training you provide to suppliers is usually planned under ESD instead. Keep the two budgets and their records apart, and check how each contribution will be treated before you commit spend. Our article on B-BBEE skills development explains that element in more detail.
B-BBEE scorecard software and record-keeping
Many companies search for B-BBEE scorecard software to track their ESD spend. BOTI does not sell scorecard software. Whatever system you use, the scorecard relies on evidence. For every supplier or enterprise development intervention, keep:
- the agreement or development plan with the beneficiary;
- invoices and proof of payment;
- attendance registers and certificates of attendance;
- a short record of what changed for the supplier after the support.
BOTI can supply attendance registers and certificates for the training it delivers, so that these records are ready for your verification file.
How BOTI supports supplier and enterprise development
BOTI designs training around the real gaps in your supplier base, so that the support you fund leads to measurable improvement.
E-learning Training Platform
For supplier groups spread across regions, a self-paced e-learning platform gives each supplier access to a library of preloaded courses on topics that build competitiveness. Suppliers choose the courses that match their needs and learn at their own pace. Progress tracking lets you see which suppliers are taking part and plan further development. To discuss setting this up for your suppliers, request a quote.
Targeted Virtual Live Training Programs
BOTI also runs live, facilitator-led programmes online for supplier groups. They cover areas such as leadership and contract management and focus on practical methods that suppliers can apply straight away. BOTI works with you to schedule sessions at times your suppliers can attend.
Training topics that help suppliers grow
- Winning work: the Tender Training Course: Secure Business for a New Venture helps small businesses prepare complete, compliant submissions.
- Pricing for profit: Costing and Pricing Training for a Business Venture helps owners quote without eroding their margins.
- Keeping the books: the Basic Bookkeeping Course builds the financial records that funders and buyers ask for.
- Delivering on contracts: the Contract Management Course helps suppliers understand and meet the terms they sign.
- For buyers: the supply chain, procurement and contracts courses help procurement teams plan and manage supplier relationships.
Frequently asked questions
What is enterprise and supplier development in B-BBEE?
Enterprise and supplier development is the part of the B-BBEE scorecard that covers preferential procurement, support for suppliers in your supply chain and support for small businesses more broadly. Its aim is to help black-owned suppliers and SMMEs become sustainable and competitive.
What is the difference between supplier development and enterprise development?
Supplier development supports businesses that supply, or could supply, your organisation. Enterprise development supports small businesses more widely, whether or not they sell to you. Both can include training, mentoring and access to finance.
Does BOTI offer B-BBEE scorecard software?
No. BOTI does not sell scorecard software. BOTI provides B-BBEE training and supplier development training, and supplies attendance registers and certificates of attendance that you can keep as evidence.
Does BOTI run B-BBEE training courses in Gauteng?
Yes. BOTI runs B-BBEE and supplier development training at its venue in Sunningdale, Johannesburg, in-house at your premises, or live online for teams anywhere in South Africa. BOTI cannot promise scorecard recognition or points, because recognition depends on the Codes that apply to you and on your verification.
To help your managers, procurement team and suppliers understand how the scorecard works and where ESD fits, book Black Economic Empowerment (B-BBEE) Fundamentals Training. Training runs in-house at your premises, at BOTI’s venue in Sunningdale, Johannesburg, or live online. Call BOTI on 011 882 8853 or email [email protected]. This course is not accredited. It is delivered as a professional skills programme, and delegates receive a BOTI certificate of attendance.
Sources
- Codes of Good Practice on B-BBEE: Code Series 300, Statement 300 – Skills Development (Government Gazette 42496) – Department of Trade and Industry, 31 May 2019.