What is a BEE ROI?Return on Investment (ROI) deals with the money you invest in a specific project, and the subsequent return you realise from that investment. In the case of BEE, most people will measure “BEE ROI” in the form of BEE points, and eventually a BEE Level. No. Your costs should be reflected in relation to your business gains. You should always strive to spend less and earn more. A ROI calculation should include revenue generation, client retention, and overall organisational benefits.WIFM (What’s in it for me)?
A sustainable BEE ROI strategy will result in a continuous trickle of economic benefits for your business, in terms of:
Pivot back to basics: Unpacking the underlying principles of BEE
- a competitive edge in gaining new business
- reduction in costs
- maximising government funding
- and long-term sustainability of your business
Are you spending money for the sake of BEE points only?
Writing a cheque to make the effort go away and delegate the entire BEE initiative to a third party is theoretically not a half-bad idea. However, the key to maximising your BEE ROI is by taking control of it through, first of all, understanding the basic principles of the BEE Codes, secondly, understanding the cost of BEE projects leading to BEE points, thirdly through successful implementations, followed by accurate ROI measurement.
The BEE Codes are based on five main principles;
- a procurement incentive to businesses: a higher BEE level should lead to increased revenue
- an equity drive: achieving economic transformation of the mainstream economy
- people development: skills development should feed employment equity with black talent
- supply chain development: enterprise and supplier development funding should feed new black owned suppliers into your supply chain
- and a strong community outreach principle.
These principles are feeding grounds that will eventually satiate scorecard compliance sustainably, increase economies of scale, and significantly improve ROI for the long haul.Tipping the scale
If you do it right, you can earn 73 BEE points (BEE Level 6) without spending any money on BEE. Fact.Follow the nifty Weighted Scale Model as developed by BEE Analyst.
In essence, you have Ordinary and Extraordinary Expenses (BEE) in the Weighted Scale ROI model. On the one side you “Earn BEE points without spending money”, as opposed to the other side; where you have direct BEE expenditure, year on year, to earn BEE points.Conclusion:
BEE is here to stay, regardless of our economy being in ICU, in junk status or Covid-19. The South African economy must become more inclusive.
A mind-shift should occur from implementation focused (scorecard elements) to a strategically aligned (four pillar) approach. Equity transfer, people development, supply chain optimization and community outreach.
Simply follow the key principles to BEE success: Understand the basic principles of the BEE Codes, understand your costs, plan your investments, implement your projects, and measure your ROI.Choose Smart, BEE Smart
BEE Analyst has a proven track record, and digital solution, to navigate the byzantine BEE legislative environment, achieve desired BEE levels, and reduce BEE costs.