1. PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT
PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT
Briefing by Ericsson South Africa on its economic transformation policies
31 August 2016
© Ericsson AB 2016

2. Agenda Introduction to Ericsson Economic Transformation
Agenda
Introduction to Ericsson
Economic Transformation
Specific Questions posed to Ericsson in letter dated July 25th from Small Business Development Portfolio Committee
The total number of outlets and shops serviced by Ericsson;
the number of black owned or previously disadvantaged people companies contracted by Ericsson as opposed to white companies to be sub-contracted on the work given by telecommunications companies;
The criteria that is used for awarding contracts and sub-contracts to those outlets;
Total amount of budget allocated to black companies or companies belonging to previously disadvantaged people;
The availability and implementation of Capacity Building Policy in relation to enhancing black empowerment; and
The policy on the 30 days payment to SMME’s and Cooperatives.
© Ericsson AB 2016

3. Our Organisation Presence in South Africa since 1896 10 Regions
Our Organisation
10 Regions
Sub-Saharan Africa
North America
Western & Central Europe
Mediterranean
Latin America
Sub-Saharan Africa
Middle East
India
North East Asia
South East Asia & Oceanica
Presence in South Africa since 1896
© Ericsson AB 2016

4. Ericsson South Africa SA Head Office Co-location at client offices
Ericsson South Africa
SA Head Office
148 Kelvin Drive Woodmead
Johannesburg
Co-location at client offices
Cape Town
Port Elizabeth
Umhlanga
Bloemfontein
Polokwane
Nelspruit
Pretoria
Midrand
© Ericsson AB 2016

5. Ericsson South Africa Core Business
Ericsson South Africa
Core Business
Network roll out
Managed services
Network modernization
Equipment supply
Systems integration
TV and Media management
Operations and business support systems
Charging systems
Play a role in broadband roll out to support SA Connect and National Development Plan
Driving industry transformation in other sectors;
Energy
Transport
Safety and security
Media
Finance
Education
Water
Create innovation networks
© Ericsson AB 2016

6. SUSTAINABILITY & CORPORATE RESPONSIBILITY
SUSTAINABILITY & CORPORATE RESPONSIBILITY
© Ericsson AB 2016

7. ICT Empowerment in Africa
ICT Empowerment in Africa
UNIVERSITY OF CAPE TOWN
MEng (Telecoms Programme)
Designed in partnership with Ericsson Academy South Africa
UNIVERSITY OF STOCKHOLM
Capacity Development of Policy Makers
Ericsson support with market insights
COMMUNICATIONS REGULATORY ASSOCIATION OF SOUTHERN AFRICA (CRASA) AND WEST AFRICAN TELECOMMUNICATIONS REGULATORY ASSEMBLY (WATRA)
Support with development of national broadband plan framework
Supporting the World Radio-Communications Conference (WRC) 19 process
SMART AFRICA ALLIANCE
Driving Smart Cities Frameworks
Driving National Broadband Plans
AFRICA TELECOMMUNICATION UNION (ATU)
Support with technology insights
Inputs to the WRC 19 process
Capacity workshops
EAST AFRICA COMMUNICATION ORGANIZATION (EACO)
Technology and market trends seminar for EAC member states regulators
© Ericsson AB 2016

8. Supplier Selection Criteria
Supplier Selection Criteria
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9. Supplier Criteria - Scorecard
Supplier Criteria - Scorecard
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10.
Supplier summary
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11. Ericsson South Africa -BBBEE
Ericsson South Africa -BBBEE
Ericsson South Africa (ESA) Total Procured Spend 2015
Total Procured Spend with Black Owned Companies (>51% BO & >30 % BWO)
Nr. of Suppliers – 56/171
R324m
37%
Total Procured Spend with Companies with black ownership
Nr. of Suppliers – 83/171
R620m
71%
Total Procured Spend with Black Owned Companies >50% (# supplier - 38/122)
Nr. of Suppliers – 38/171
R187m
21%
Total Procured Spend BEE Compliant Companies
Nr. of Suppliers – 147/171
R854m
97%
Ericsson South Africa (ESA)
Total Procured Spend with Black Woman Owned Companies >30%
Nr. of Suppliers – 18/171
R137m
16%
Total Procured Spend Local Suppliers
Nr. of Suppliers – 159/171
R858m
98%
Total Procured Spend from EME's
Nr. of Suppliers 37/171
R57m
31%
Total Procured Spend
Nr. of Suppliers - 171
R873m
Total Procured Spend BEE Non-Compliant Companies
Nr. of Suppliers – 12/171
R3m
.4%
Total Procured Spend from SMME's
Nr. of Suppliers – 82/171
R327m
37%
Total Procured Spend Foreign Suppliers
Nr. of Suppliers – 12/171
R14m 2%
Total Procured Spend from QSE's
Nr. of Suppliers 45/171
R270m 7%
© Ericsson AB 2016

12. Ericsson South Africa -BBBEE
Ericsson South Africa -BBBEE
Ericsson South Africa (ESA) Total Procured Spend (YTD)
Total Procured Spend with Black Owned Companies (>51% BO & >30 % BWO)
Nr. of Suppliers - 70/203
R326m
48%
Total Procured Spend with Companies with black ownership
Nr. of Suppliers - 92/203
R478m
70%
Total Procured Spend with Black Owned Companies >50% (# supplier - 38/122)
Nr. of Suppliers – 46/203
R152m
22%
Total Procured Spend
BEE Compliant Companies
Nr. of Suppliers – 147/171
R648m
95%
Ericsson South Africa (ESA)
Total Procured Spend with Black Woman Owned Companies >30%
Nr. of Suppliers - 24/203
R175m
26%
Total Procured Spend Local Suppliers
Nr. of Suppliers - 182/203
R655m
96%
Total Procured Spend from EME's
Nr. of Suppliers - 46/203
R57
28%
Total Procured Spend
Nr. of Suppliers - 203
R682m
Total Procured Spend BEE Non-Compliant Companies
Nr. of Suppliers – 12/203
R4m 1%
Total Procured Spend from SMME's
Nr. of Suppliers – 95/203
R245m
36%
Total Procured Spend Foreign Suppliers
Nr. of Suppliers – 20/203
R26m 4%
Total Procured Spend from QSE's
Nr. of Suppliers – 49/203
R189m 8%
© Ericsson AB 2016

13.
Supplier Spend – Total
© Ericsson AB 2016

14. In 2016: Spend with SMME’s = 36% of total
Supplier Spend – SMME
In 2016: 95/198 (48%) are SMME’s
In 2016: Spend with SMME’s = 36% of total
© Ericsson AB 2016

15. Supplier Spend – Black Owned
Supplier Spend – Black Owned
In 2016: 46/198 (23%) are Black owned
In 2016: Spend with Black owned = 22% of total
© Ericsson AB 2016

16. Supplier Spend – Black Women
Supplier Spend – Black Women
In 2016: 24/198 (12%) are Black Women owned
In 2016: Spend with Black Women owned = 26% of total
© Ericsson AB 2016

17. Supplier Development - Policy
Supplier Development - Policy
Ericsson South Africa Supplier Development Policy
Supplier Opportunity Identification
Beneficiary Sourcing
Beneficiary Selection
Beneficiary Communication
Beneficiary Contracting
Supplier Development Beneficiary Assessment
Beneficiary Support
Service Providers
Beneficiary Monitoring
Measurement
Reporting
Preferential Payment
© Ericsson AB 2016

18. Enterprise and Supplier Development
Enterprise and Supplier Development
Activity
Date
Transformation unit established
June 2016
BEE Consultants on board for added support
Collaboration with contract managers to direct ESD investment towards core SMMEs
Continuous
Technical Support and OHS training provided to 8 ASPs
2014, ongoing
Early payments and overheads costs made to 4 Supplier Development SMMEs
Investment towards commercialization of an innovative enterprise majority-owned youth
Coaching & Mentoring SMMEs on HR, Finance, Marketing skills, etc. by ESA managers
October 2016, ongoing
Training on ICT tools, processes and Ways of Working
Ongoing
5% NPAT budgeted for 2016 Enterprise and Supplier Development
© Ericsson AB 2016

19. Supplier Development Example
Supplier Development Example
Health and Safety
Zero Tolerance campaign
ASP Management
© Ericsson AB 2016

20. Preferential Payment Payment policy
Preferential Payment
Payment policy
For Beneficiaries, preferred payment terms will be offered.
Preferred payment terms will align with requirements to maximise scoring on the ESA B-BBEE scorecard. Typically, this will be less than 10-days after receipt of invoice.
SMME with < 30 day payment terms
© Ericsson AB 2016

21. BBBEE Transformation BBBEE Transformation Project BEE spend in 2016
BBBEE Transformation
BBBEE Transformation Project
Reviewing all elements
BBEE Transformation unit
BBBEE Consulting & Training
BBBEE Systems
BEE spend in 2016
Ownership
Skills Development
Enterprise and Supplier Development
Socio-Economic Development
Steering Group
Project Management
Ownership
Management Control
Skills Development
Enterprise & Supplier Development
Socio-Economic Development
© Ericsson AB 2016

22.
SLIDE STORY: Summarize, connecting to the start of the presentation, and to end positively looking with confidence and ambition on what lies ahead
Through the years, as an industry, telecommunication has had an un-matched impact and spread globally. Naturally take some pride in that.
We have transformed immensely as a company and it has taken us to where we are today, on the brink of transforming industries and societies across the world with the power of ICT. Something that we are all right in the middle of, as a generation, as an industry and as a company.
Finally, let’s look at what’s next for us at Ericsson, and explore how technologies and transformation can create positive change in society. For example to: 
Provide smarter & more accessible healthcare
Empower more efficient & sustainable transport
Revolutionize creation, delivery and experience of media
Enable more personal and interactive education
Make cities cleaner, safer and more dynamic
Make cars, houses or anything intelligent
And of course, much more. (click)
END OF PRESENTATION
© Ericsson AB 2016