Successful Enterprise and Supplier Development (ESD) initiatives require an intricate mix of business and strategic decisions, financial expertise, intimate experience and critically timed funding. When the conditions are just right, a well-executed ESD programme can stimulate significant growth for SMEs and provide an array of benefits to the company implementing it.
Built on many years of hands-on experience, Edge Growth has identified the fundamental pillars crucial to the success of any B-BBEE-focused ESD programme.
What Are the Nine Fundamental Pillars for ESD Success?
- SME selection linked to sourcing strategy
Involve the end user from the outset – this requires integrating both procurement and ESD decision makers to ensure the right SMEs are selected upfront and the end-user requirements are built into their business development plans. Using demand forecasting and growth analysis to identify specific supply chain requirements and capability gaps and building your ESD programme around them makes a lot of sense. This enables you to source, select and support SMEs that are value chain-aligned – “piece” procurement doesn’t drive growth and SMEs must be able to secure large long-term contracts to grow. - World class programme management, governance and communication
Our understanding of corporate structures and experience in the commercial environment enables us to effectively manage the inputs and activities of cross-functional stakeholders and implementation partners, navigate any operational challenges and minimise any risks. To ensure delivery against strategic business and ESD objectives, each programme is governed by a steering committee, led by a dedicated Programme Implementation Manager and supported by a team of experienced business development specialists. - Integration of suppliers into supply chain
When businesses are encouraged to invest in SMEs that are directly involved in their supply chains, they have a greater stake in ensuring positive results, instead of giving money away to initiatives that achieve little transformation. ESD also makes up the bulk of available bonus points for related outcomes, such as transforming existing suppliers and providing employment opportunities.Once ESD is done and done well, the results will bring about visible positive change – an improvement in supply chain performance, genuine cost reduction by allowing new suppliers with superior quality and lower prices to enter the supply chain, brand loyalty, customer centricity, community goodwill, government buy-in and many more. - Bespoke custom programme solutions
At Edge Growth we do not believe in a one-size-fits-all ESD solution for SME development. To build and optimise a programme for your unique business needs, Edge Growth uses an innovative, cross-functional approach. This means harnessing a combination of the most appropriate, transformative capabilities of our various specialist divisions. While every programme we design is distinctive, there are a few common features they all share. Our approach always considers the best solution for the particular client needs and when it comes to business development support, we offer both high touch and low touch programmes, each with their unique features. - Group SMEs by life stage
For business development support to be successful, the approach must be matched to the lifecycle stage of the business. Our proprietary methodology provides high-potential SMEs with the world-class support services they need to succeed, not applying a one-size-fits-all approach. - Access to funding
One of the most significant challenges faced by SMEs in South Africa is access to finance. Many small business owners struggle to secure funding to expand their operations, invest in technology, or hire additional staff. To help SMEs, financial institutions, government agencies, and private investors should provide accessible and affordable financing options tailored to the unique needs of small businesses. - Access to market
Access to markets is a significant factor in the success of SMEs. Helping SMEs gain exposure to a broader customer base is essential. Collaborative efforts between SMEs and larger corporations, government procurement initiatives, and e-commerce platforms can provide SMEs with opportunities to reach a wider audience and grow their businesses. - Access to Skills through Mentorship and Training
Mentorship and training programs play a crucial role in guiding SMEs toward success. Focused business development support (BDS) which includes experienced mentors can provide valuable insights and advice to business owners, helping them navigate the complexities of entrepreneurship. By offering training in areas such as business management, marketing, and financial planning, SMEs can develop the skills needed to thrive in a competitive market. - ESD Balanced Scorecard
The ESD programme should be measured like any other business intervention. The tenth pillar of a great ESD strategy always has to be a customised scorecard that measures those KPIs that are aligned to business objectives. Not all the pillars will necessarily apply to your solution.
An experienced ESD service provider starts and ends with the client’s objectives in mind – whether this is to find sustainable suppliers to diversify their supply chain, improve the effectiveness of the current value chain, enhance brand value, improve costs and timings, or have a greater transformational effect. Trying to force a standard approach on companies that have rigorous governance requirements – necessary to satisfy stakeholders or regulatory bodies – may become a recipe for inefficiency, excessive cost and lackluster results.
The aim is not just to generate empty ESD points, but to provide financially efficient and sustainable solutions, using proven fund management, multi sector expertise, scalability and access to additional SME funding and corporate contracts. ESD is a sure-fire way to make a meaningful impact, adding depth to your brand and earning your company recognition. An approach which is designed to generate tangible results, including definitive ROI, all while enacting very real transformation within South Africa, makes sound business sense.
