Over the last half-decade or so, technology has become increasingly more disruptive within the procurement industry. Across various offerings, you are promised the next big thing in procurement management that will help you save time and money and, ultimately, improve the way your organisation approaches the end-to-end procurement process.
However, an effective procurement solution is more than simply a means to cutting costs and improving efficiencies within an organisation – particularly in a country such as South Africa, with complex compliance and legal requirements.
Enter blockchain – an innovative technology that has enabled smart technology solutions to adopt a more transparent, secure and fully-auditable environment. In procurement, this type of environment could be key in tackling the many challenges faced by South African organisations who need to ensure that they adhere to the continuously evolving Broad-Based Black Economic Empowerment (B-BBEE) scorecard requirements.
In fact, add to this the complexities of Enterprise and Supplier Development (ESD), which accounts for almost 40% of the B-BBEE scorecard, and most businesses struggle to stay ahead of compliance and regulation.
Critical procurement and ESD challenges in South Africa
Technology that claims to disrupt the procurement process in South Africa, particularly from an ESD perspective, should, therefore, not only save time and money for the organisation in which it is implemented, but should also help to transform the economy. It should help to solve critical procurement and ESD challenges. These include:
– Limited access to ESD funds by black-owned and black women-owned businesses.
– Difficulty ensuring that the beneficiaries of ESD funds are suitable and, even more difficult to prove, the influence of these contributions.
– Proof of funding reaching the intended and target black-owned businesses and the application thereof is often difficult to audit/monitor. This can result in a gross mis-appropriated allocation of funds.
– Owing to the man-hours and administration required by donors when evaluating recipients, fewer black-owned businesses receive ESD assistance and thus the true purpose of transformation and broad-based empowerment is not achieved. Funding is, therefore, restricted to a select few.
– Current ESD programmes often do not provide access to skills training, funding and/or market opportunities.
Combine an innovative technology that can help to solve specific procurement and ESD challenges with something as secure, efficient and transparent as blockchain and you have a working solution that will set a brand-new standard and truly transform the procurement industry.
Technology platforms that can revolutionise South African procurement
The aforementioned challenges are deeply engrained in a society that is desperate for solutions to help tackle them head-on and transform the economy into one that is more inclusive and broadly beneficial to all.
Solutions must tackle critical procurement and ESD challenges by providing platforms for sustainable and continuous supplier access and development. This includes:
– Technology platforms that help to identify suppliers and establish the initial relationship or facilitate the first transaction, which can help businesses across South Africa form pipelines of trusted and certified suppliers (at all levels).
– Platforms that ensure once a supplier is identified, they are incorporated into the procurement process where they are efficiently managed, tracked, monitored and any resultant ESD spend with the supplier is easily audited on an ongoing basis.
– Platforms enforce end-to-end transparency and integrity, along with associated efficiencies and cost savings throughout the entire procurement process.
– Technology capabilities that enable a fully-auditable procurement process that aligns with the most up-to-date compliance and B-BBEE regulations.
For more information, contact Lima, a blockchain-powered platform that connects bidders/suppliers with supply chain administrators and procurement managers in a secure and transparent environment.
You can catch Lima at the Technology Solution Zone at the Enterprise and Supplier Development Expo hosted by Smart Procurement World in conjunction with Absa, Commerce Edge and Nedbank.