towards collaborative partnerships in ed - serious enterprise development 2011

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Connect Partner Empower Invest Towards collaborative partnerships in Enterprise Development afriCAN talent, developing afriCAN enterprises, growing afriCAN economies 1 Rehema Isa | Managing Director | rehema.isa@fuseconsulti ing.co.za

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Presented during Tshikululu Social Investments' 2011 Serious Enterprise Development workshop. Enterprise development is a multi-faceted and complex endeavour with simple solutions. One of the greatest challenges it faces is the satisfaction of competing agendas of multiple partners, each monitoring different key performance indicators and reporting on different time-lines to different stakeholders.

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Page 1: Towards collaborative partnerships in ED - Serious Enterprise Development 2011

1

Connect Partner Empower Invest

Towards collaborative partnerships in Enterprise

Development

afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

Rehema Isa | Managing Director | [email protected]

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1. The way we see it2. The case for collaborative

partnerships3. About Fuse

afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

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afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

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Who is is the real beneficiary of Enterprise Development Support?

1

The way we see it

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The way we see it

Budgeting Period Expenditure period

Reporting period

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What we need to investigate

Home Family Community

The BBBEE Codes provision for 3% NPAT dedicated spending for ED &

1% NPAT for SED

Solutions

that develop

One enterprise at a time

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What is the problem?

What are the indicators that

measure the real impact / success of

developing enterprises in the same community?

Company C

Company A

Company B

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afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

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How do we influence and impact the quantum of change required while maintaining the quality

required to do so properly?

2

The case for collaborative partnerships

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What is the impact

Enterprise Development

Support Received

• Jobs created in community• Poverty alleviation• Some related entrepreneurs

Salaries and wages

recirculation

Enterprise Value Chain

PRIMARY

SUPPORT• Inbound Logistics• Technology• Outbound Logistics• Marketing & Sales• Service

• Infrastructure• Technology Development• Human Resource

Management• Procurement

Outflow

A

B

C

Page 9: Towards collaborative partnerships in ED - Serious Enterprise Development 2011

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How do you counter this

Enterprise Development

Support Received

• Jobs created in community• Poverty alleviation• Some related entrepreneurs

Salaries and wages

STRE

NG

HTE

N T

HE

ENTE

RPRI

SES

VALU

E CH

AIN

Enterprise Value Chain

PRIMARY

SUPPORT

• Inbound Logistics• Technology• Outbound Logistics• Marketing & Sales• Service

• Infrastructure• Technology Development• Human Resource

Management• Procurement

Outflow

A

B

C

XOr at least

reduce

recirculation

Channel leakages to community

Page 10: Towards collaborative partnerships in ED - Serious Enterprise Development 2011

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Practical illustration

afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

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Example– Locality Profile

Population:• Approximately 509,964 people according to the 2001 statistics. • Females represent 54% of the population• 65% of the population is under the age of 25

Economic profile:

• 18% employment rate• High dependency on grants• 406,689 people living with no income• 90,888 people earn between R400 and R51 200 per annum• 381 earn between R51 201 and R204 801 per annum

Literacy: • 82% illiteracy rate

Road infrastructure: • Poorly maintained access paths & roads. Roads are mainly gravel with limited extent of tarred roads

Health profile: • Limited health services• Relatively high prevalence of HIV/AIDS

Water supply: • Water supply is a challenge and there is need for infrastructural upgrade

Electricity: • Electricity supply is stable

Economic activity: • Tourism and agriculture are the predominant sectors• Limited mining and brick making

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Local case studyStarting point

An enterprise that exists for profit that provides a holistic

perspective of developing enterprises

A value proposition that is replicable and addresses a

broad spectrum of challenges

•Assess viable potential sustainable initiatives that will serve as a catalyst for broad based economic development•Select one•Clearly identify and quantify the areas for spin off broader participation

Develop existing or new viable enterprise that will serve as an anchor enterprise

•Run the enterprise like any other business• In parallel run ED initiatives with participating entrepreneurs along the enterprise’s value chain

Implement, monitor and report

Identify a community with Socio-Economic development potential

•Define the Socio-Economic landscape existing as a baseline• Identify the gaps in the community iro entrepreneurial endeavours• Identify opportunities for development•Create a scorecard that defines the key success indicators of developing the community

• Identify suitable collaboration partners•Agree on programme parameters•Agree on specific value realisation metrics•Agree on reporting methods & timeframes

Engage partners on a proposed holistic solution

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Delivery Model

Agro-Processing Hub

Critical Success Factor

Development of entrepreneurs along the value chain- Financial support- Technical support- Non financial support

1. To enhance economic activities and create business opportunities in Bushbuckridge

2. Job creation in Bushbuckridge

3. Skills development of the people in Bushbuckridge

4. To create the infrastructure necessary for the economic development in identified area

5. Growth in Enterprise Development initiatives in identified area

The catalyst The mandate The collaborations

Markets

Infrastructure development- Roads- Schools - hospitals

Development of focal groups in communities- Women- Youth - People with disabilities- Innovation &

technology

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It is not straight forwardGO LIVE ENTERPRISE DEVELOPMENTOPERATIONS

Programme management to get the hub to a level where operations can assume. This is in three areas:- Poultry processing- Vegetable processing- Fruit processingThis incorporates technical preparations, human resource management, and systems delivery and control definitions

Operations become effective once Go-Live and relevant testing has been authorised and the project handed over from the project management team to the operational team. There is a phased period where both teams are working in parallel to ensure a smooth transition in the areas:- Poultry processing- Vegetable processing- Fruit processing

The Hub is a catalyst for economic development initiatives in the area. It forms an anchor to support various enterprises that can feed into its value chain thereby promoting a co-dependent value chain that cohesively ensures sustainability. The ED aspects kick in once the Hub is in operation.

Lessons and school fees

• 37 people employed permanently to date with anticipated 150 to project end

• Duration of project long-term • Changing of project sponsors within first year• Political interest in specific area of operations• A common understanding of the bigger picture

• A very weak value chain so revenue leakage out of the community is significant without immediate intervention

• Profitable business first as an anchor only then can there be support of enterprises which is where collaboration comes in

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afriCAN talent, developing afriCAN

enterprises, growing afriCAN economies

3

About Fuse

afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

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About Fuse

We are continuously learning from others and contributing to what has been developed, for we rely ‘not to what others have thought, nor to what we ourselves conjecture, but to what we can clearly and perspicuously behold and with certainty deduce; for knowledge is

not won in any other way’ (Descartes 1629-1640)

Our vision is to have a direct, sustainable and measurable impact on Africa’s economies by growing African Enterprises

PROGRAMME MANAGEMENT ENTERPRISE DEVELOPMENT TRAINING & DEVELOPMENT

• Design and execution of socio-economic programmes

• Monitoring and value realisation management of strategic programmes

• Enterprise commercialisation• Value chain development• Development and execution of

bespoke ED programmes• A bias for the development of

the growth oriented woman entrepreneur

• Development of bespoke programmes

• Execution of socio-economic programmes

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The ED Conversation

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Flagship models – Agro Processing Hub

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The Agro-Processing Hub today

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Flagship model: Sun Valley Health FoodsIn a community (funding & support)

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Flagship model: Sun Valley Health FoodsA few years later (post programme support)

• Short term investment• Unlinked community development – multiple agendas• Holistic solutions

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TRAINING & DEVELOPMENT

•Local and International training authorities

•Skills Development Agencies•SETAs•Training partners•Local community

•Local stores•International buyers•Department of Trade & Industry

•Plumbers•Civil works contractors•Steel works contractors•Fencing contractors•Casual labour•Electricians•Building contractors•Materials suppliers•Department of Human

Settlement•Project management partner

LOCAL & INT’L RETAIL

Flagship Model: SVHF Farms

ENTERPRISE DEVELOPMENT

•Agricultural institutions•Educational institutions•Organic farming experts•Organic compost suppliers•Seedling suppliers•Organic farming accreditation

institutions •Logistics providers•Local community•Funding partners

CONSTRUCTION

•Local & Provincial Economic Development Authority

•Local Community

PROCESSING & PACKING

FARM MANAGEMENT

•Packaging material suppliers•Local community•Logistics providers

sam

ple

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Flagship models – Sun Valley Health Food Farms

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Fuse Strategic Partnerships

We are continuously learning from others and contributing to what has been developed, for we rely ‘not to what others have thought, nor to what we ourselves conjecture, but to what we can clearly and perspicuously behold and with certainty deduce; for knowledge is

not won in any other way’ (Descartes 1629-1640)

ILO - WED

IFC – Business Edge

The ILO’s Women Entrepreneurship for Gender Equality (WEDGE) is working in collaboration with Fuse PMC to mainstream WEDGE tools in South Africa with the purpose of building the capacity of business development services providers in women’s entrepreneurship development and assist women entrepreneurs to develop and grow their business. The WEDGE-SA project technically supports Fuse PMC to rollout the WEDGE tools and provides oversight and quality assurance to ensure the services and training rendered relating to WEDGE’s tools are of international standards.

Fuse is a registered Business Edge ™ South Africa franchisee.A world-class training system, Business Edge™ strengthens the management skills of owners, managers and staff of small and medium-sized enterprises (SME’s). Backed by IFC and delivered by certified local trainers, Business Edge™ sets a new standard for business training in developing countries.

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Who is your intended beneficiary for Enterprise Development Support?

Closing thoughts

afriCAN talent, developing afriCAN enterprises, growing afriCAN economies

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