Business Linkages programmes have been one of the major building blocks in many Supplier and Enterprise Development (ESD) programmes. Due to the need for localisation and black owned companies these programmes have been quite fruitful in South Africa with many of these programmes being successful for profit ventures.
The goal of a business linkages programme is to create commercial linkages between companies in a value chain. This is an important tool in your Enteprise and Supplier Development (ESD) transformation process as it will assist you in finding the right suppliers when targeting Preferential Procurement gaps that you might experience. Part of your decision might however be to in-source the process of business linkages and create your own business linkages programme or to outsource the process and get a company to assist you in finding suppliers.
One of the best international commercial examples of a business linkages programme is that of Alibaba. This linkages programme offers the opportunity for companies across the world to source various products. Many of the South African programmes work on the freemium/premium models where you can do some searching for free, but you are not able to see any more data of the companies until you pay more money. Unfortunately Alibaba is less relevant to the South African empowerment needs.
We do however have various business linkages programmes in South Africa. One of the most well known in South Africa is the Shanduka Black Pages. This platform provides you with various different companies that you can procure from. It also assists small businesses with various tools that they can use to develop themselves. The Shanduka Black Pages is built on the Supply Chain Network platform that has been branded by a few corporate clients. A similar programme is run through the Intsika programme as used by South 32.
One of the oldest business linkages programmes in South Africa is called Easydex. This programme is still used in most South African companies, but unfortunately is not as user friendly as many of the alternatives. In terms of cost this is also a bit more expensive alternative. A relatively recent edition to the business linkages landscape has been M2North. This is also by far one of the more user friendly alternatives. Unfortunately many of the companies listed on their database is only a profile and does not offer more information on the products and services.
The South African Supplier Diversity Council (SASDC) provides another business linkages mechanism. Not only do they facilitate a network of small businesses linking with large business, but they also provide a valuable network of large businesses linking with other large businesses. Other than the other business linkages programmes the SASDC is a NPO with the specific objective of creating diversity in your supply chain.
How does your business linkages programme support your ESD strategy?
Unfortunately most South African business linkages programmes might tell you a lot about the BBBEE level of the company, but provide you with little information regarding the product or the service that the company offers. In this case you might need to use an external service provider to do some of the screening relating to quality or the products/ services offered on your behalf.
In some cases it is wise to create your own business linkages profile. This is specifically relevant if you seek to create commercial linkages with SMMEs that are in a specific local or rural area or fit a specific profile. A recent report by Harvard, the IFC and the International Business Leadership Forum provides detailed information on some of the business linkages models that are available in Africa and why these linkages models were created. It also provides a comprehensive list of the benefits as well as the lessons learned of business linkages programmes.