Industry insights

Leveraging development of skills in IT to comply with amended B-BBEE IT Charter codes

Leveraging development of skills in IT to comply with amended B-BBEE IT Charter codes

The updated codes for the B-BBEE IT Charter were released in November 2016 and South African IT companies have had their work cut out for them to maintain their level of broad-based black economic empowerment (B-BBEE) compliance, says Ana O’Donoghue, BBD executive.

We are striving to not only comply with this legislation, but live this requirement by embracing highly skilled individuals, regardless of background.

To do so requires searching for talent that can easily be overlooked if only using historic channels.

Legislation in this regard has been a moving target, as markets first anticipated changes to the B-BBEE IT Charter by the Department of Trade and Industry at the end of 2015, with updated codes only being released in November 2016.

More stringent compliance has been required by South African companies to adhere to these updated codes. The B-BBEE verification process involves an audit to verify all supporting documentation, interviews with various stakeholders and the verification of the financial audits. These audits are performed by an independent verified B-BBEE rating agency.

The below five elements are audited in a generic scorecard, with different weightings for each element.

Scorecard elementDefinition
OwnershipMeasures effective ownership by black people
Management controlMeasures effective control by black people
Skills developmentMeasures the extent to which employers develop the competencies of black employees
Enterprise and supplier developmentMeasures the extent to which companies carry out initiatives contributing to enterprise development: Procurement
Supplier development
Enterprise development
Socioeconomic developmentMeasures the extent to which companies support socioeconomic development

A level four on the eight-level grading system is a fully compliant status. Despite code changes making this more challenging, we have always endeavoured to achieve this through an approach of not merely implementing actions to achieve a score, but to ensure all initiatives add value to the business and its people. With that philosophy, engagement included not only considering the immediate future, but also long-term sustainability.

In 2016, we embarked on a transaction to become 51.1% black owned, comprising Sphere Holdings owning 49.9% and Student Sponsorship (SSP) 1.1%. BBD’s staff and management retain 49% ownership and continue in their current management role of providing continuity of leadership, technical skills, client relationships and strategic execution.

Another big drive has been an initiative to increase skills development and continually develop people to ensure their skills grow with the company. We are always looking for new, young talent, and in the last 18 months, has increased its learnership, bursary and graduate opportunities. To identify this new talent, BBD became one of the three founding sponsors of WeThinkCode_, a disruptive free-to-study education initiative. They identify top talent to assist them in finding employment. To date, over 100 000 people have applied to this programme, of which 300 have been carefully selected and we have sponsored 45. Evidence indicates that 10 jobs are created for every coder that is grown, a real contribution.

Our first BEE certificate was awarded in 2005 and yielded a level seven result, indicative of 50% BEE recognition level, a score of 40 points as per the 2005 codes. Fast forward to 2017 and BBD is now a majority black-owned IT powerhouse, with a level four B-BBEE score, offering stakeholders formidable new competitive advantages. In addition to service excellence, BBD is now able to help clients meet their own local procurement and transformation targets within this challenging space, while being committed to making a positive difference in South Africa.

What’s next? We’re ready!