JSE-listed African financial services company, Ecsponent Limited, says that its unique Ecsponent Development Fund (EDF) provides large corporate business with an effective way of managing preferential procurement, improving reliable delivery whilst ensuring true social upliftment and skills transfer for local enterprises.
This is according to Ecsponent CEO, Terence Gregory, who notes that South Africa’s highly regulated B-BBEE environment has perpetuated a cycle of supply chain turmoil. “The truth is that there hasn’t been a broad-based sharing of wealth through the commercialisation of business in communities.”
“Instead, B-BBEE legislation has been built around a scorecard. This has led to organisations being concerned with achieving timely supplies that meet specifications, while also meeting regulatory thresholds. The upliftment and growth of their communities becomes a secondary outcome. The recent changes to regulations have added further disruption to the industry with many organisations facing substantial downgrades in their BEE ratings.” he adds.
Gregory explains that the EDF’s offering has been refined over years of providing funding and procurement support to the market-specific needs of its clients. The company now offers a comprehensive solution to assist businesses in achieving and maintaining B-BBEE compliance standards, ensuring more reliable delivery, driving socio-economic development and providing local enterprises with the skills transfer and skills development they need to fulfil their duties and deliverables as preferred vendors.
“Currently, there are financing operations in the market that provide financial assistance to vendors. There are also numerous operations that assist with tender applications, procurement negotiation and supply assurance. Ecsponent has combined all these elements, taking a holistic approach in working with large corporate businesses and their preferred vendors to manage, control and uplift Importantly, this allows corporate organisations to focus on their core business as Ecsponent ensures the delivery.” he says.
In terms of the process, Gregory shares that the Company provides a complete solution facilitating all aspects from initial quotation stage, through the procurement cycle and ultimately managing the payment function. Ecsponent manages the risks associated with the supply chain process while upskilling the vendor in every aspect of the process as well as the vendor’s own business. The corporate is provided with a monthly scorecard of its vendors’ progress, with the objective of graduating the vendor into the corporate’s normal supplier base in time.
Gregory says this solution is ultimately about linking large corporate businesses and their vendors – with an efficient funding and supply chain facility.
“The Ecsponent Development Fund removes traditional preferential procurement concerns with a practical solution that empowers South African enterprises,” Gregory says.
The negative perceptions relating to B-BBEE procurement in the market – based on poor performance, governance at vendor level and the ever-present problem of fraud and corruption – Gregory adds – has resulted in a level of mistrust in the market.
“The structure of the Ecsponent Development Fund creates a synergy across the supply-chain, fostering a more trusting environment of mutual benefit with goods delivered, compliance standards taken care of and vendors being upskilled and empowered,” he concludes.