TELKOM Case study in enterprise development and community engineering

Growing_businesses.jpgDeveloping South Africa’s next generation of pioneering businesses without compromising technical compliance, output and standards is the hallmark of Telkom’s transformation policies, which have delivered R3,5-billion in procurement from black-owned companies during the year to March 2011. This is equivalent to 28.6% of the company’s total measured procurement expenditure, a performance that few large South African companies can equal.

During the 2011 financial year, Telkom spent R76-million on Enterprise Development initiatives.

“For Telkom, preferential procurement is a transformative tool to stimulate economic and community development in a broad context. We seek to shift procurement from established companies and bring new players into our supply chain. We aim to create sustainable black-owned and controlled companies of world-class standard. This is a long-term strategy that embraces the principles of economic growth and development,” Procurement Group Executive, Vuledzani Nemukula, tells SmartProcurement.

Two trailblazers illustrate the benefits of this approach.

First we have black female entrepreneur Sibongile Mphilo who, in an inspiring story of personal transformation, has progressed from petrol attendant to security-mogul-in-the-making in one decade. Along the way, this Telkom supplier has also transformed the lives of the more than 1 000 people she employs.

In 2002, Mphilo registered a company, Sibongile Security Services, using the money she received from tips to rent a small office in Polokwane. Her break came when she was awarded a six-month contract at the Sekhukhune Magistrate’s office. Other contracts followed and by 2004 she was well-established in Polokwane and was awarded a large contract by the Department of Education.

As the company grew she opened an office in Pretoria in 2008, and was awarded a tender at the South Africa Social Security Agency.

“As the year progressed, I decided to open offices in other provinces. I used the company profits to pay the rent of the new offices and to employ administrators to do marketing. Deciding to expand nationally was a huge risk financially as most of the profits went to operating costs and travelling to different provinces. This meant many nights sleeping in a car as I did not have the funds to pay for accommodation,” she says.

Her success in a male-dominated industry was met with disbelief by competitors who accused her of being a front for major security companies. “This motivated us to work even harder and learn as much as we could to prove we are capable of running a successful security business; one that is even better than the male-owned companies,” she says.

The hard work paid off in 2011 when Sibongile Security Services was awarded a contract by Telkom. “Very soon we discovered that this would not be like any other contract we had. The Telkom team wanted to develop our company into a more professionally managed and well-equipped business, not just with infrastructure but also knowledge and experience,” says Mphilo.

New challenges followed after she landed a Telkom contract. The contract required a huge capital outlay. Banks refused to provide loans for vehicles, uniforms and equipment such as control rooms and firearms. “Eventually, the Telkom team helped us and the banks were able to provide the loans. Today we have 50 cars and 150 firearms,” she says. In the first year, Telkom assisted Sibongile Security Services to develop and implement a quality management system that is ISO 9001: 2008 compliant.

A second success story is that of Telecom Southern Networking (TSN) under the leadership of Stan Sibeko, which provides a classic case study that combines the principles of entrepreneurship with those of economic development.

TSN provides Information and Communication Technology (ICT) services such as HDSL and Wi-Fi network installation to various clients including Telkom, Mustek, Central Johannesburg College, Mangosuthu University of Technology and the customs service of the Democratic Republic of Congo (DRC). Since 1997, TSN has had a contract with Telkom to supply HDSL/HSDSL. But the TSN team is not motivated by profit alone. TSN invests its profits into Right Entry, an innovative Midrand-based community-based electronics school.

“As a result of its stable funding from TSN, Right Entry is a no-fee school. All students are accommodated on the school’s premises. Our flagship course is a four year Electronic Design Programme code named G3,” says Sibeko. Critical thinking is essential in any successful engineering programme. Students are encouraged to debate the concepts covered and to challenge the lecturers, many of of whom are former students.

The students direct, manage and administer the operations of the college. This includes daily duties such as cooking, washing and cleaning. The general well-being of students, including safety and security, is a collective responsibility, as are recruitment, admissions and discipline. This approach is intended to create an empowering environment where students take accountability and gain life and vocational skills. This approach has proven extremely successful and is something that sets our programme apart. The contribution to society is the ultimate purpose of the programme. “Our vision is to open similar operations in other provinces. We currently support formal colleges in Gauteng by offering them opportunities for vocational and experiential training,” he concludes.

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