Choosing an Enterprise Development Partner
Andre du Plooy, executive consultant for Symbiosys IT
By Andre du Plooy, executive consultant for Symbiosys IT
A look at some of the numerous factors to consider when choosing an SME partner to join your organisation’s enterprise development scheme.
The ongoing push to stimulate enterprise development (ED) and grow the number of smaller businesses servicing the enterprise space is huge. Not only does this approach provide large organisations with access to companies that boost their B-BBEE credentials, but on the flipside, it helps to grow the skills and abilities of those smaller suppliers in the chain.
Therefore, it has never been more important to ensure that you choose the best and most appropriate suppliers to join your ED programme, and there are certain key factors you should consider when doing so.
Due diligence
One of the key criteria is to bring in business consultants to undertake a full due diligence process. This involves assessing the ED business, getting a handle on its business track record, verifying its credentials and references, speaking to past and present customers, and thoroughly combing through its financials and skills sets.
With access to this information, it is possible to determine any constraints they may face and to identify issues that may get in the way of them performing at the highest level. You can then recommend assistance, such as skills training that may help them overcome obstacles.
From a business consultant perspective, the correct way to approach ED businesses is to determine exactly where they are right now, where they want to be in future, and to then unpack and examine the gap between the two, as this is what needs to be closed to achieve success.
Due diligence helps your enterprise determine whether that gap is one that can be bridged or whether you should rather seek out another supplier. Remember too that while due diligence may be more costly, it is better to spend more to ensure you choose the right partner, than to fail and have both your businesses’ names dragged through the mud.
Large versus small suppliers
Whether you choose to go with one or two large suppliers, or a multitude of smaller ones, there are benefits and challenges to both approaches. To begin with, there are extra costs associated with using multiple smaller service providers, most notably in respect of economies of scale, but on the other hand, they are more flexible than a larger entity.
Remember that the larger the supplier, the more likely it is to be carrying large overheads. Furthermore, the larger they are, the less likely they are to be agile, so if agility is a prerequisite for your business, working with smaller suppliers that can adapt more quickly to accommodate your own changing needs is probably the best approach.
Either choice puts you in a position where you are reducing some risk but increasing others, so ED is always something of a balancing act. While the economies of scale offered by a single larger provider may make financial sense, the minimising of risk by spreading the load and not putting all your eggs in one basket looks better from a compliance perspective.
The other factor to consider is that economic growth only comes from distributing the wealth and spreading it around as widely as possible. Therefore, it is worth bearing in mind that the more businesses you can bring into your supply chain, the greater will be your contribution to the Nation’s economy.
Job creation
There is no doubt that in South Africa we have a desperate shortage of jobs. This means that if you turn to the smaller suppliers, your agility, price points and contribution to economic stimulators will become more prevalent all around.
The reality is that if we do not do something significant to stimulate the job market in SA, we will rapidly find ourselves up the creek without even a boat, much less a paddle.
The only way to grow jobs properly is to diversify the supply chain into a broader base, creating jobs and opportunities, which leads to increased innovation. After all, the increased agility and flexibility within smaller businesses raises the potential for those ‘light bulb’ idea moments far higher than you would find in a stifled corporate environment.
Such diversification and growth mean that not only are you spreading the available money around and helping to stimulate the economy, but you are also playing a part in creating jobs and in educating employees through upskilling and training programmes.
Governance and ethics
Lastly, it must be understood that government views the SME space as the key driver for the economy. However, while this may be the fulcrum for stimulating the economy, it must be done honestly.
The challenge remains that there are people and organisations willing to buy their way into doing business, which is why it is vital to have levels of governance in place that will ensure you do not compromise in respect of fraud and corruption.
Governance and ethics are key to ensuring that potential suppliers do not compromise their business model to obtain your business. To this end, it is recommended that you have a shortlist of suppliers, you discuss your governance requirements with them and help them understand the fit, so that they are aware from the outset of what measures will be taken to ensure ethical standards are maintained
You could say that your real investment here is in people – helping them to understand the importance of honesty, ethics and correct principles. Achieve this and you will have helped to assure the longevity and success of their business, since honesty and ethics ultimately tie directly back to a superior level of customer service.
About Symbiosys IT
Symbiosys IT is a technology solutions provider with its head office located in the Western Cape in South Africa, and its European office in London in the United Kingdom.
Symbiosys has seen substantial growth since being founded in 2004 and is now supporting organisations in over 36 countries. Symbiosys has the tools, services, skills, and proven track record to be recognised as leading experts in migration services. Over the past 16 years, Symbiosys has migrated more than 500,000 seats.
Migration is a key service for Symbiosys, which also specialises in integration, automation, security and compliance, cyber-security, cloud networking, database management, identity management, end-point management, cloud management and messaging solutions. Symbiosys has a team of experienced people and a strong global presence. Symbiosys understands the human element in technology and forges symbiotic partnerships with its customers, partners, and suppliers, with the common goal of collaborating ‘better together’.