Annual Performance Plan 2016/ /2019

Transcription

1 Annual Performance Plan 2016/ /2019 Annual Performance Plan 2016/ /2019 1

2 CONTENTS Published by Seda, This document contains confidential and proprietary information. The dissemination, copying, disclosure, use of, or taking any action in reliance on the contents thereof, without the written consent of Seda, is strictly prohibited.

3 1. Organisational structure 5 2. Foreword by the minister 6 3. Overview by the chairperson 8 4. Official sign off 10 PART A: STRATEGIC OVERVIEW Vision Mission Values Strategic goal and objectives Legislative and other mandates Recent court and ccma rulings Situational analysis Performance delivery environment Organisational delivery environment Client journey model Alignment to government priorities Description of the planning process Financial plan Projections of revenue, expenditure and borrowings Asset and liability management Cash flow projections Capital expenditure programmes Infrastructure plans Dividend policy 28 PART B: PROGRAMME PERFORMANCE Description of programmes Programme 1: Enterprise Development Programme 2: Seda Technology Programme Programme 3: Administration 36 PART C: LINKS TO OTHER PLANS Information technology plan Risk management and fraud prevention plan Risk management process and strategic risk register Seda fraud prevention plan 42 Annexure A: indicator protiles 44

4 LIST OF ACRONYMS AND ABBREVIATIONS CEO Chief Executive Officer COTII Council of Trade and Industry Institutions CPPP Community Public Private Partnership Programme DSBD Department of Small Business Development dti Department of Trade and Industry EDD Economic Development Department EIC Enterprise Information Centre HR Human Resources ICT Information and Communication Technology IPAP Industrial Policy Action Plan ISO International Organisation for Standards M&E Monitoring and Evaluation MOA Memorandum of Agreement NAMAC National Manufacturing Advisory Centre NGP New Growth Path PFMA Public Finance Management Act SA South Africa SAQI South African Quality Institute Seda Small Enterprise Development Agency Sefa Small Enterprise Finance Agency SMME Small, Medium, and Micro Enterprise Stp Seda Technology Programme TWIB Technology for Women in Business 4 Annual Performance Plan 2016/ /2019

5 1. ORGANISATIONAL STRUCTURE Board Chief Executive Officer Stakeholder Management and Public Relations Risk and Compliance Internal Audit Legal Governance Corporate Service Enterprise Development Finance SEDA Technology Programme Strategy and Information Management Facilities Management Programme Analysis, Development and Learning Financial Accounting Quality, Standards and Technology Transfer Information and Communication Technology (ICT) Human Resources Centre of Excellence Co-Operatives and Community Public Private Partnership Management Accounting Incubation Strategy and Organisational Performance Management Human Resources Operations Provincial Offices (9) Supply Chain Management Business and Information Systems Communication and Marketing Branches (58) Independent Incubation Centres (48) Division Unit Provincial Network Incubation Centres Annual Performance Plan 2016/ /2019 5

6 2. FOREWORD BY THE MINISTER Getting South Africa s economy to perform at the levels laid out in the National Development Plan Vision 2030 remains a priority of the current administration. President Jacob Zuma, in his 2015 State of the Nation Address outlined a nine point plan to bolster our economy. One of these points; which is unlocking the potential of small enterprises, cooperatives, rural and township enterprises, talks to the work of the Department of Small Business Development (the DSBD) and its agencies. We are also expected to play a role in upping the agricultural value chain, minerals beneficiation and high impact industrialisation. The nine point plan will not only boost the economy, but will also result in decent employment, high quality of life and improving South Africa s entrepreneurial culture. The DSBD and its agencies, Sefa and Seda have prioritised a number of measures aimed at enhancing their support instruments. One of these measures is a comprehensive review of all support programmes and services, with the aim of identifying which ones should be prioritised going forward, and ways of addressing some of the structural challenges small enterprises and cooperatives face. The review will also contribute towards aligning the initiatives of the DSBD with those of the two agencies. Transversal agreements with fellow departments have and will also continue to receive prominence going forward. There are numerous initiatives at all three levels of government that are within the space of small enterprise and cooperative development. These initiatives usually compete with other core mandates, we believe the DSBD is ideally positioned to consolidate these small enterprise and cooperative development initiatives. The DSBD believes that decent employment through inclusive economic growth will be achieved by interventions that seek to create sustainable, competitive and growing small enterprises; increasing participation of small enterprises that are in rural and township economies, increasing participation of women, youth and people with disabilities 6

7 in small businesses in entrepreneurial activities and forming strategic partnerships that seek to integrate small business and cooperative support mechanisms. At a programme level, the DSBD will prioritise the following: Making public sector procurement opportunities accessible to small businesses and co-operatives through set aside instruments. Facilitating a process where SMMEs and co-operatives participate in the private sector value chains through enterprise and supplier development programmes. Providing requisite skills, training and capacity building to SMMEs and co-operatives utilising partnerships with agencies, private sector and tertiary institutions. Providing incentives to make it easy and affordable to run a business as well as easy access to finance. Developing new and appropriate policies as well as review existing policies as a form of reducing regulatory burdens on SMMEs and co-operatives. Together with Seda and other departments and agencies, the DSBD will work tirelessly towards ensuring that small enterprises make a material contribution to the country s socio economic goals. 7

8 3. OVERVIEW BY THE CHAIRPERSON Seda s participation in the DSBD planning processes, which preceded the Seda processes, gave Seda an informed platform to plan from. While alignment and working together on identified programmes is increasing, the alignment at a strategic level is critical in that it also talks to how systems, processes and people need to be configured. The organisation s strategy framework has been revised, taking into consideration government s focus and prioritisation of small enterprise development, as well as the challenges small enterprises face on a daily basis. These challenges result in a small enterprise and cooperative sector that is characterised by limited growth and low levels of sustainability. Seda s strategy is therefore anchored on three goals that we believe will go a long way in addressing the factors that result in low growth and sustainability. These goals are creating: Sustainable, competitive and growing small enterprises and cooperatives. An accessible delivery network that includes unserviced areas. Improved stakeholder involvement in small enterprise and cooperatives development. Seda s products and services, as well as strategic support functions will align to these goals during the next financial year, assisted greatly by the review exercise scheduled for completion by end December One programme we are excited about, and plan to scale up going forward is the National Gazelles programme. The programme seeks to create a multi stakeholder platform that will identify 200 high-growth small enterprises each year over a ten year period. These high-growth small enterprises will serve as ambassadors for the small enterprise sector, and promoting the field of entrepreneurship. They are also expected over time, to be a feeder to the Black Industrialists programme. 8

9 The Seda network, although sizeable, is not accessible to all aspiring and existing entrepreneurs. This is more pronounced in townships and rural areas. Priority will be given to increasing Seda s incubation network in provinces that are under represented in the poll of 48 supported incubators, and coming up with ways of being more accessible to small enterprises and cooperatives in townships and rural areas. Collocation at already existing organisations and mobile units will play a key role in this regard. An analysis of Seda s past performance shows that the organisation has been able to show success with the resources provided, but this success has not been on the broader small enterprise sector. The resources provided to Seda are not at the level required to make an envisioned impact on the small enterprise sector. As a result of this, Seda has had to scale down on certain critical areas like increasing incubation footprint, technology transfer incentives, awareness on and attracting clients to the government priority sectors and implementing programmes such as One Municipality One Product (OMOP) as part or rural enterprise development. The organisation is of the firm view that it s relevant, needs based programme can go a long way towards enhancing the capabilities of the broader small enterprise sector, if adequately resourced. 9

10 4. OFFICIAL SIGN OFF It is hereby certified that this Annual Performance Plan: Was developed by the management of Seda under the guidance of Seda Board. Was prepared in line with the recommendations made by Government Technical Advisory Centre and incorporated discussions from the DSBD and Seda strategic planning workshop which was held in September Accurately reflects the performance targets which Seda will endeavour to achieve given the resources made available in the budget for the 2016/ /2019 period. Mr N Mzizi Chief Financial Officer Mr L Njenge Chief Executive Officer (Acting) Recommended for approval by: Dr. I Zwane Board Chairperson Approval by: Ms L Zulu Minister of Small Business Development 10 Annual Performance Plan 2016/ /2019

11 A STRATEGIC OVERVIEW Annual Performance Plan 2016/ /

12 Seda was established in December 2004 through the National Small Business Amendment Act Act 29 of as an agency under the dti. The establishment was done by merging three entities: Ntsika Enterprise Promotion Agency, National Manufacturing Advisory Centre (NAMAC) and the Community Public Private Partnership Programme (CPPP). The GODISA Trust and the National Technology Transfer Centre were merged with Seda in April 2006, becoming the Seda Technology Programme (Stp). The small enterprise support function of the South African Quality Institute (SAQI) and the technology related activities of the Technology for Women in Business (TWIB) were incorporated with the Stp in The Stp was fully integrated into Seda structures in In 2014, Seda s mandate and functions were transferred from the dti to the Department of Small Business Development (the DSBD). 5. VISION To be the centre of excellence for small enterprise development The vision is translated into high level competency, motivation, accountability as well as customer drive of Seda. In order to become the Centre of Excellence, we must strive towards improving in all these critical areas. 6. MISSION We develop, support and promote small enterprises to ensure their growth and sustainability in coordination and partnership with other role players Seda s mission gives a clear-cut framework for everything Seda does. This is shown in the product range of Seda as well as in the approach, attitude and working methods of Seda staff. The success of Seda is ultimately measured against this mission: how well Seda is ensuring the growth and sustainability of the small enterprises it has interacted with. 7. VALUES Nature Innovation Customer service excellence Resilience The core values govern Seda s operations and relationships with stakeholders such as clients, partners, employees, local community and the shareholder. The core values remain constant and are not affected by changes in the operational environment and management. The meaning of Seda s core values is explained as follows: NURTURE we create a nurturing environment by partnering with our clients and employees, and in the way in which we care and support them. INNOVATION - we foster innovative ideas and solutions in order to deliver exceptional customer service. CUSTOMER SERVICE EXCELLENCE we place customer service excellence at the centre of everything we do. ETHICAL BEHAVIOUR we behave with integrity in all our actions, always acting in the best interest of Seda. RESILIENCE we are resilient in our efforts to achieve excellent results. 12 Annual Performance Plan 2016/ /2019

13 8. STRATEGIC GOAL AND OBJECTIVES Impact is the long-term/ultimate outcome or consequence of Seda s activities and the effect this impact has on people and the environment. Seda s legislative mandate and mission give direction regarding what is expected from Seda in the long term. The impact of Seda is measured through periodic evaluations within a range of three to five years and these evaluations are conducted by the shareholder. Expected Impact Increased contribution of small enterprises to the SA economy, and promotion of economic growth, job creation and equity There are three intermediate outcomes that lead to the ultimate outcome or impact. These are: Increase in turnover of assisted small enterprises and cooperatives. Increase in number of people employed in assisted small enterprises and cooperatives. Reduced mortality rate of assisted small enterprises and cooperatives. 13

14 While working towards the above intermediate outcomes and eventually the ultimate outcome or impact, Seda will strive to contribute towards the following strategic outcome oriented goals or outcomes for the 2016/ /2019 period: Strategic Outcome Oriented Goal 1 Improve the sustainability of small enterprises and cooperatives Strategic Outcome Oriented Goal 2 Increase Seda delivery network to reach unserviced areas Strategic Outcome Oriented Goal 3 Maximise support offered to Seda clients through stakeholder contribution PRODUCTS AND SERVICES Seda provides business related information, advice, consultancy, training and mentoring services in all areas of enterprise development. These services aim at providing solutions related to various business functions from production to human resources, finance, marketing and export development. Rural enterprise development and cooperatives are supported through the Cooperatives and Community Private Partnerships Programme (CPPP). Through Stp, Seda also provides technology transfer, business and technology incubation services, as well as incentives for management systems implementation (such as ISO9001 and OHSAS 18001), product testing and certification. Seda continues to utilise a client-journey approach, which aims at establishing a long-term relationship with clients. Prior to embarking on any intervention, a Seda Business Advisor assesses the needs of the client and based on the assessment results the client, together with the Seda Business Advisor, drafts a development plan with specific development interventions. These services are delivered to the client either by Seda s own staff or through business development service providers. Seda s target market covers small, medium and micro enterprises (SMME), including cooperatives, as well as potential entrepreneurs with a business idea. The definition of a small enterprise is provided for in the National Small Business Act of 1996 and it is based on the number of employees, turnover and fixed assets. Seda defines its clients according to the number of employees. Small enterprises defined by number of employees: Medium Small Very small 6 20 Micro 0-5 Historically, Seda has primarily focused on the micro and very small segments of the SMME sector, due to the sheer volumes and the number of people who want to start a business. The outputs in terms of clients assisted have been huge, but this has come at a cost on impact measures such as employment, profitability and sustainability of assisted clients. The current economic realities necessitate that Seda continues on the entire small enterprise sector, with the aim of reducing the mortality rate of nascent enterprises and creating an entrepreneurial culture at micro and survivalist level, and creating jobs and globally competitive small enterprises at the small and medium enterprise level. 14 Annual Performance Plan 2016/ /2019

15 To maximise impact (i.e. job creation), the organisation has implemented a number of initiatives. Seda has embedded a model that aims to work with small enterprises over a longer period, as opposed to once-off interventions. This model, which is called the client-journey model is based on research that shows a strong correlation between long-term support and impact i.e. increase in turnover and number of people employed. The organisation will enhance its focus on the upper end of the small enterprise sector, i.e. businesses employing between 21 and 200 people as the market segment with job creation potential. Needs analysis has been conducted on these clients and relevant programmes have been identified. These programmes include supplier development, mentorship and coaching, access to markets, incubation, technology transfer, conformity assessment and standards. This change in focus to the upper end of the small enterprise segment is affirmed by a number of studies and plans. The diagram below quotes two of these and maps out the strategic shift and consequences for Seda. RESEARCH A small minority of highgrowth businesses hold the key to job creation and wider prosperity 1 SMEs contribute 32% of GDP, 59% of employment and 19% of exports² STRATEGIC SHIFT...the organisation will enhance its focus on small and medium sized enterprises (those employing between 21 and 200 employees). These latter segments of the SMME sector have a larger job creation potential in comparative terms. Over time, the organisation aims to spend more time with existing businesses thereby providing more interventions per client and ultimately register greater impact on assisted small enterprises ³ KEY CONSIDERATIONS Product, service and needs of high-growth business category that differ from other Seda client categories Best way to access these customers Operational changes required Investment in people and systems necessary Strategic partnerships Impact measurement Risks and trade-offs Implications on financial sustainability Funding model Sources: Extract from NESTA UK publication The Vital 6% (Oct 2009) 1, Malaysia SME Masterplan , Extract from Seda Annual Performance Plan 2012/13 3 Figure 1: Seda s Strategic Focus The service delivery network of Seda consists of delivery points located throughout the country. These points currently take the form of Seda branches, Seda enterprise development centres and Seda supported incubation centres. Seda also utilises information kiosks and mobile units to access remote areas. In addition, Seda co-locates primarily with local municipalities and various other partners in areas where it does not have a branch. As at end September 2015, Seda had an established network of 58 branches, 19 mobile units, 53 electronic information kiosks, 15 satellite offices, 48 incubation centres and 37 access points where Seda co-locates. Annual Performance Plan 2016/ /

16 9. LEGISLATIVE AND OTHER MANDATES Seda s work is governed by a broad legislative framework, as outlined below: Table 1: Seda s Legislative Framework Name of Act 1. The Constitution of South Africa, 1996 (Act No. 108 of 1996) 2. National Small Enterprise Act, 1996 (Act No. 102 of 1996) amended by the National Small Business Amendment Act, (Act No. 29 of 2004) 3. Cooperatives Act, 2005 (Act No. 14 of 2005) as amended by Act No. 6 of Public Finance Management Act, 1999 (Act No. 1 of 1999) and Regulations as amended 5. Protected Disclosures Act, 2000 (Act No. 26 of 2000) 6. The Promotion of Access to Information Act, 2000 (Act 2 of 2000) Purpose To recognise the injustices of our past; honour those who suffered for justice and freedom in our land; Respect those who have worked to build and develop our country; and Believe that South Africa belongs to all who live in it, united in our diversity; to Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights; Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is equally protected by law; Improve the quality of life of all citizens and free the potential of each person; and Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations. To provide for the establishment of the Advisory Body and the Enterprise Promotion Agency; to provide guidelines for organs of state to promote small business in the Republic; and to provide for matters incidental thereto. To provide for the formation and registration of co-operatives; the establishment of a cooperatives advisory board; the winding up of cooperatives; the repeal of Act 91 of 1981; and connected matters. To regulate financial management in the national government and provincial governments; to ensure that all revenue, expenditure, assets and liabilities of those governments are managed efficiently and effectively; to provide for the responsibilities of persons entrusted with financial management in those governments; and to provide for matters connected therewith. To make provision for procedures in terms of which employees in both the private and the public sector may disclose information regarding unlawful or irregular conduct by their employers or other employees in the employ of their employers; to provide for the protection of employees who make a disclosure which is protected in terms of this Act; and to provide for matters connected therewith. The purpose of the Promotion of Access to Information Act is to give effect to the constitutional right of access to any information held by the state, as well as information held by another person that is required for the exercise or protection of any right. 16 Annual Performance Plan 2016/ /2019

17 Name of Act 7. Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000) 8. Integrated strategy for entrepreneurship Purpose To give effect to section 217(3) of the Constitution by providing a framework for the implementation of the procurement policy contemplated in section 217(2) of the Constitution; and to provide for matters connected therewith. As an integrator of policies, institutions and programmes, the strategy seeks to ensure that adequate support and delivery mechanisms exist across the entire entrepreneurship continuum, from pre-start-up to start-up, business survival, growth and expansion, and turnaround of ailing businesses. 10. RECENT COURT AND CCMA RULINGS There are two Labour Court and one CCMA cases that have recently been concluded. The Labour Court rulings were both in favour of Seda, and the CMMA case relates to a settlement agreement reached with an employee. As at end September 2015, there were five pending CCMA matters. 11. SITUATIONAL ANALYSIS 11.1 PERFORMANCE DELIVERY ENVIRONMENT Small businesses continue to be seen as the apex on which South Africa s socio-economic challenges will be addressed. The National Development Plan sets the small business sector the goal of creating 90% of South Africa s 11 million needed jobs by To achieve this, the following key essentials have been identified: Raising levels of employment through productivity growth and improving the earnings of working people. Faster and more inclusive growth. Effective partnerships across society. Creating a capable and developmental state. The problem that Seda seeks to address is the limited growth and unsustainability of new and existing small enterprises. This problem is caused by a number of factors, such as inadequate and uncoordinated support services to small enterprises and cooperatives, economic conditions that do not favour small enterprises and cooperatives, a low entrepreneurial culture, limited access to capital resources and an unfavourable operating environment for small enterprises and cooperatives. The effects of the problem can be seen in the limited contribution by small enterprises and cooperatives to economic growth and employment, which ultimately leads to unemployment, poverty and inequality. President Jacob Zuma, in his 2015 State of the Nation Address, highlighted the difficult economic climate South Africa finds itself in and the risk this poses on the goal of achieving a growth target of 5% by Some of the contributory factors cited are the slow global growth as well as domestic constraints in energy, skills, transport and logistics amongst others. To boost the economy, the President has a nine point plan to ignite growth and create jobs has been formulated. The nine points are. Annual Performance Plan 2016/ /

18 1. Resolving the energy challenge. 2. Revitalising agriculture and the agro-processing value chain. 3. Advancing beneficiation or adding value to our mineral wealth. 4. More effective implementation of a higher impact Industrial Policy Action Plan. 5. Encouraging private sector investment. 6. Moderating workplace conflict. 7. Unlocking the potential of small, medium and micro enterprises (SMMEs), cooperatives, township and rural enterprises. 8. State reform and boosting the role of state owned companies, information and communications technology (ICT) infrastructure or broadband roll-out, water, sanitation and transport infrastructure as well as 9. Operation Phakisa aimed growing the ocean economy and other sectors. Seda, by virtue of its programmes and services, is expected to play a critical role in driving Point 7, and also contribute towards Points 2, 3 and 4. Despite the challenging economic environment, there are conditions that make small enterprise and cooperative development possible. These include: Some elements of policy and legislation are conducive to small enterprise and cooperative development. Institutions and resources in the private and public sector that offer support to small enterprises and cooperatives. Business development support needs by small enterprises and cooperatives. Market opportunities for the products and services produced by the small enterprises. Opportunities for small enterprise and cooperative development due to the revised BBBEE codes. Funding instruments and incentives from departments and development finance institutions. Opportunities for small enterprises and cooperatives from special economic zones (SEZs) ORGANISATIONAL DELIVERY ENVIRONMENT Seda has demonstrated the ability to improve the competitive and capabilities of the small enterprises it has assisted. This has been achieved without neglecting the need for greater economic inclusivity of previously disadvantaged South Africans. The organisation has been tracking performance outcomes like employment creation and increase in turnover since Of the approximately 84,000 clients assisted during the 2009/10 to 2014/15 period, nearly 40% indicated an increase in the number of people employed subsequent to Seda s interventions. The Seda Technology Programme, which is able to track the actual number of jobs created, has created 14,686 direct and permanent jobs since incorporation into Seda in The employment creation statistics must be looked at against the performance of the South African economy where job creation has been declining or flat, particularly after the 2008 economic crisis. The performance, while good, has not made a material impact on the small enterprise sector, due to the sheer size of the sector. The FinScope South Africa Small Business Survey 2010 estimated that South Africa has approximately 6 million small businesses. Seda s resources and capabilities need to be significantly enhanced to enable the organisation to service sizeable proportion of the small business sector. 18 Annual Performance Plan 2016/ /2019

19 With the limited resources and capabilities, the organisation prioritised four strategic focus areas to maximise impact and contribution to the goals of the National Development Plan. These are increasing Seda s incubation footprint, directing specific interventions to the small and medium enterprise segment, identifying and working with large scale projects and cooperatives, and prioritisation of growth sectors. Seda has made remarkable progress in the implementation of the four strategic focus areas since that the last planning cycle. The number of supported incubators has increased to 48 by the end of the 2014/15 financial year and provision has been made to support additional incubators in 2015/2016. Recommendations on improving incubator governance, which emanate from an independent due diligence study on the programme are currently being implemented. The organisation has also streamlined its processes and promotional activities to encourage entrepreneurs in the sectors prioritised by the National Development Plan and the Industrial Development Action Plan, namely: agriculture (including agro processing), manufacturing and services (with a focus on IT and tourism). The diagram below illustrates the sectoral profile of Seda s clients. Figure 2: Sectoral Profile of Seda s Clients 60.48% Services 13.62% Manufacturing 11.74% Agriculture 7.66% Construction 4.68% Wholesale / Retail 0.72% Tourism 0.57% Mining 0.54% ICT One of the strategic focus areas for the organisation is to increase its focus towards small enterprises that employ between 21 and 200 people. An equitable spread of clients across the entire small enterprise sector will ensure that the organisation addresses economic inclusivity by assisting micro and very small enterprises and also addresses employment creation and competitiveness by assisting small and medium sized enterprises. A profile of clients by number of people employed shows a positive migration of assisted clients from the micro (employing less than five) to the very small (employing between six and twenty employees) category. Initiatives have been developed to ensure that these very small enterprises are able to migrate further up the SMME chain, and also attracting clients in the small to medium categories. The organisation supported 35 secondary co-operatives during 2014/2015. A significantly larger number of primary cooperatives were also supported. The aim is to develop the primary co-operatives into viable businesses, and then get those with similarities to co-operate at a secondary level. These strategic shifts during the last couple of years have made it necessary for the organisation to analyse its operating model. A revised business model has conceptualised, which defines how Seda should function to effectively implement its strategy. The business model is broken down into a value proposition, infrastructure, clients and finances and is detailed in the next page. 19

20 Figure 3: Seda Business Model Canvas Key Stakeholders: Value Proposition: the DSBD Large corporate and state owned entities National, provincial and local government Government agencies National and provincial legislature Business chambers and industry leaders Non-profit organisation, research institutions and universities Key Resources: Competent staff members and service providers Optimal resource allocation Business and information system, diagnostic tools Delivery network, co-location points, mobile labs Value adding products and services, knowledge management Robust monitoring and evaluation systems Quality, reliable, needs based and growth oriented business advice and support Client Relationships Tailor made, value adding professional relationship Client segments: By business size: i.e. pre start up, employing less than 20 people, employing between 21 and 200 BY business lifecycle stage: sustainability, growth, acceleration, turnaround Client interaction channels: Electronic media?portal Social medi Enterprise Information Centres Seda newsletter Value Proposition Infrastructure Clients Finances Key Activities: Enhance human resource capabilities and capacity Optimise business processes (fix what needs to be fix internally) Continuously exploer process automation Promote operational excellence through operational level agreement Partnership and stakeholder mapping and strategy implementation 360º performance management Revenue Streams: Funding from the DSBD Donor funding Funding from national, provincial and local government Corporate and state owned entity partnership for supplier development Management fee for external programmes Implementation of related incentives Cost and Operational Efficiencies: Rationalised support functions Streamlined and automated processes Increased use of technology for communication/interaction Knowledge sharing with other institutions Co-location especially between branches and incubators 20 Annual Performance Plan 2016/ /2019

21 11.3 CLIENT JOURNEY MODEL Seda has learned over time that far greater success, sustainability and job creation opportunities are achieved when clients are assisted with more than one intervention over a long period of time. Seda refers to this approach as our Client journey model and is implemented through all 58 Seda Branch Offices. The Client Journey is a structured process of engaging with a client which consists of a set of logical steps during which specific principles, tools and offerings are applied by the practitioner to address the client s business development needs. The following high-level process depicts the Client Journey from a client s first interaction at the Branch to completion of an intervention and follow-on by Seda. Client visits the Branch Practitioner consults with the client Practitioner Registers the client Signs Confidentiality and Service Agreement Practitioner Conducts an Assessment Develops a Business Case An Intervention is Agreed Implemented Next Intervention Sign-off upon completion Facilitates Service Provider payment Conduct a Customer Satisfaction Survey & Improvement Assessment Practitioner Writes a Success Story Fig 3: The Seda Client Journey First Interactions and Briefing A receptionist will determine the client s need and then refer the client to one of the Seda practitioners usually an Information Officer or book the client for a briefing session mostly aimed at start-up businesses. During the briefing session clients are informed about Seda s role, offerings, how we assist clients, the basics of starting your own business, partner organisations as well as any other questions the client might have. Following the briefing session an appointment is made with one of our practitioners vis-à-vis Business Advisor or Information Officer, co-locating partner or referral to other business development or financing institution. Consultation and Assessment At this stage the Seda practitioner conducts a detailed interview with the client about the client business needs. A client confidentiality and service agreement is signed by both parties (Seda/Client) and an assessment is conducted. The assessment results are discussed with the client, a Business Development Plan (Business Case) is drafted and the required intervention(s) prioritised Implementation Based on the Business Development Plan, Seda staff will deliver the service as an in-house intervention or acquire the services of specialised Business Development Service Provider in this case Seda s role will be to project manage the intervention and ensure that the intervention is delivered to the clients satisfaction. Annual Performance Plan 2016/ /

22 Completion Upon the successful completion of the intervention all parties involved will confirm that the objectives and deliverables were achieved and the intervention signed-off. The practitioner will request the client to complete a customer satisfaction survey within 30days which provides feedback to the Branch Manager on both Seda s and the Business Development Service Provider s performance. Follow-on The practitioner initiates the next identified intervention from the Business Development Plan and the process is repeated. Impact Assessment This is the final step of an intervention. Six months after completion of an intervention the client will be contacted and an Impact Assessment conducted by Seda. The practitioner writes a success story which will add to the pool of contributions towards Seda publications ALIGNMENT TO GOVERNMENT PRIORITIES The Department of Small Business Development s mandate is to create a conducive environment for the development and growth of small businesses and cooperatives through the provision of enhanced financial and non-financial support services, competitiveness, market access, promotion of entrepreneurship, advancing localization and leveraging on public and private sector procurement. The strategic outcome oriented goals of the department are: Goal 1: An effective and efficient administration. Goal 2: An enabling environment for competitive small business and cooperatives. Goal 3: Sustainable small business and cooperatives in rural and town ship communities. The overall national outcome that the DSBD and Seda takes the cue from is the creation of decent employment through inclusive economic growth. In order to ensure the achievement of this outcome and enable economic growth and job creation by the small business sector, the department will focus on the following interventions: Introduction of measures to reduce red tape around authorisation for investment in metros (supported by the Department of Trade and Industry). Through Development Finance Institutions, enhance township economies (supported by Department of Economic Development). Enhanced support for township economies through improved transport and commuter costs (supported by the Departments of Cooperative Governance and Traditional Affairs, Transport and Human Settlements as well as the Presidential Infrastructure Coordinating Commission). Coaching and incubation programmes in support of SMMEs and CO-OPS (supported by the Departments of Economic Development, Agriculture, Forestry and Fisheries and Trade and Industry). Programmes to ensure increased access to employment and entrepreneurship for black women and youth aimed at advancing support for emerging and smaller enterprise. Develop appropriate sanctions with regard to non-compliance in relation to the 30-day payment period. Seda s Results Based Management Framework which is illustrated below depicts how Seda s strategic objectives links to the strategic oriented outcome goals, the expected intermediate and ultimate outcomes, as well as the government outcome of decent employment through economic growth. 22 Annual Performance Plan 2016/ /2019

23 Table 2: Seda s Results Based Management Framework GOVERNMENT OUTCOME 4: DECENT EMPLOYMENT THROUGH ECONOMIC GROWTH Ultimate Outcome (Impact) Increased contribution of small enterprises to the SA economy, and promotion of economic growth, job creation and equity. Intermediate Outcomes Increase in turnover of assisted small enterprises Increased number of people employed in assisted small enterprises Reduced mortality rate of assisted small enterprises Strategic Outcome Oriented Goals (Outcomes) SOOG1: Improve the sustainability of small enterprises and cooperatives SOOG2: Increase Seda delivery network to reach unserviced areas SOOG3: Maximise support offered to Seda clients through stakeholder contribution Strategic Objectives (Outputs) Increase number of diagnostic assessment conducted on small enterprises Increase number of clients participating in the Supplier Development Programme Increase number of clients supported through mentorship and coaching Increase number of clients supported through trade facilitation Increase number of clients trained on national and international standards Increase number conformity assessment and product testing support Increase the number of clients supported with systems implementation Increase number of clients accessing Technology Transfer support Increase number of clients participating in the Incubation Support Programme Increase number of Cooperatives supported Increase number of clients participating in the BESD Programme Increase number of clients participating in the National Gazelles Programme Establish new incubators in prioritised provinces (including virtual incubators) Increase collocation points with identified partners Develop a framework for Seda branch location and resourcing Increase number of partnerships for small business development and support Increase financial support sourced from partners Annual Performance Plan 2016/ /

24 Seda s strategic outcome oriented goals and strategic objectives are aligned to that of the DSBD. At a strategic outcome oriented goal level, Seda expects to play a leading role in contributing Goals 1, 2 and 4 of the DSBD, and also contribute to Goal 3. On Goal 3 Seda is expected to contribute towards in the implementation of the Integrated Strategy for Youth, Women and People with Disabilities. The table below illustrates the alignment between Seda strategic outcome oriented goals and the strategic objectives of the DSBD. Table 3: Strategic Outcome Oriented Goal Alignment DSBD and Seda DSBD STRATEGIC OUTCOME ORIENTED GOAL Goal 1: Sustainable, competitive and growing small businesses. Goal 2: Sustainable small business in rural and township communities. Goal 4: Strategic partnerships for integrated support to small businesses. SEDA STRATEGIC OUTCOME ORIENTED GOAL Goal 1: Improve the sustainability of small enterprises and cooperatives Goal 2: Increase Seda delivery network to reach unserviced areas Goal 3: Maximise support offered to Seda clients through stakeholder contribution. SEDA STRATEGIC OBJECTIVES Increase number of diagnostic assessment conducted on small enterprises Increase number of clients supported through the Supplier Development Programme Increase number of clients supported through mentorship and coaching Increase number of clients supported through trade facilitation Increase number of clients trained on national and international standards Increase number conformity assessment and product testing support Increase the number of clients supported with systems implementation Increase number of clients accessing Technology Transfer support Increase number of clients participating in the Incubation Support Programme Increase number of Cooperatives supported Increase number of clients participating in the BESD Programme Increase number of clients participating in the National Gazelles Programme Establish new incubators in prioritised provinces (including virtual incubators) Increase collocation points with identified partners Develop a framework for Seda branch location and resourcing Increase number of partnerships for small business development and support Increase financial support sourced from partners 24 Annual Performance Plan 2016/ /2019

25 The organisation implements its strategic objectives fully aware of the need to redress the demographic profile of South Africa s economy. Youth and women owned businesses and those owned by people with disabilities receive support through Seda s product offerings and specialised programmes. The organisation has also identified advocacy and lobbying as one of the high impact programmes. Although policy formulation and creation of a conducive regulatory environment are mandates of the department, Seda will utilise its knowledge of the sector and constant engagement with small enterprises and cooperatives to contribute to the discourse on small enterprise development. The last strategic objective of encouraging partnerships to ensure mutual cooperation that will benefit small businesses and cooperatives affirms Seda s view that the organisation cannot implement its mandate successfully on its own. Key partnerships that Seda will work towards are on supplier and enterprise development, resource and programme complementarities, and sharing of good practices. Although Seda is aligned to the mandate and priorities of the DSBD, the current budget allocation of the organisation limits the ability to make a material contribution to mandate implementation. Seda is well positioned, by virtue of its extensive network and over a decade experience in delivering interventions and solutions to small enterprises and cooperatives, to take on additional responsibilities particularly in areas where there is agreement in terms of priority such as incubation, technology transfer, mentorship and coaching, etc. 12. DESCRIPTION OF THE PLANNING PROCESS Seda s planning cycle for the 2016/2017 to 2018/2019 period was preceded by the strategy planning workshop of the DSBD which took place in August The workshop which was attended by Seda s executive management team, highlighted areas of focus and the envisaged outcomes of the DSBD. The Seda Board strategy planning workshop which was facilitated by an external strategy firm, was attended by the Board, executive management and senior management from the delivery network, as well as senior management from the governance and strategic support units. Executive and provincial management presented the progress report in implementing the approved strategy, as well as factors that impede effective strategy implementation. The Government Technical Advisory Centre (GTAC) from National Treasury was also requested to review Seda s first draft of the 2016/2017 to 2018/2019 Annual Performance Plan using the results-based approach. The Institute of Futures Research from Stellenbosch University also gave a macro perspective on certainties, uncertainties and scenarios leading towards The macro perspective focused on the political, economic, social, technological, environmental and legal (PESTEL) factors. Feedback and recommendations from the Seda Board strategy planning workshop were incorporated into the second draft Annual Performance Plan 2016/2017 to 2018/2019, and further discussed at a management planning workshop in October The purpose of the management workshop was to come up with ways of implementing the action items from the Seda Board strategy planning workshop. These will be part of the Seda Business Plan 2016/2017 work plans of the various divisions within Seda. Annual Performance Plan 2016/ /

26 13. FINANCIAL PLAN Seda applies the zero-based budgeting approach which ensures that only value-added activities are included. Such activities are tested for value addition, as well as contribution to actual delivery of small enterprises. It further allows Seda to manage the available budget effectively PROJECTIONS OF REVENUE, EXPENDITURE AND BORROWINGS The table below details Seda s budget for the three year planning cycle as per the MTEF allocation. Seda s MTEF allocation was decreased by R73,9 million for the 2016/17 financial year. Due to approval of utilisation of the surplus funds of 2014/15, the 2015/16 budget increased to R 769,1 million. This resulted in a R 105,4 million reduction in the budget for 2016/17. The organisation has had to, as a result of the reduced allocations during the 2015/2016 financial year, cut back on some planned strategic initiatives such as incubation expansion, the one municipality one product (OMOP) programme and promotion of Seda s interventions in the key growth sectors. The substantial increase in the 2017/2018 financial year will make it possible to implement some of these strategic initiatives. Seda is a service organisation and, as such, needs to allocate adequate funds to the compensation of employees. The current allocation to compensation of employees is below the industry benchmark, due to available financial resources. With the current and anticipated funds not expected to increase relative to our needs, the organisation has had to hold back on filling of some vacancies which has an adverse impact on service delivery. Table 2: Seda Budget 2014/ /19(Rand Million) AUDITED FIGURES FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 INCOME R million Seda - DTI from MTEF budget 498,3 478,2 481,5 583,2 617,0 STP - DTI from MTEF budget 126,4 132,2 139,2 146,1 154,6 DTI Specific projects External earnings 69,1 78,2 35,0 12,0 12,0 Other income 19,6 11,0 8,0 5,0 6,0 Utilisation of accumulated surplus 69,5 Total Income 713,4 769,1 663,7 746,3 789,6 EXPENDITURE Compensation of employees 230,9 272,2 291,3 311,7 333,5 Goods & Services 398,9 483,5 359,0 420,7 441,6 Depreciation 13,5 13, 4 13,4 13,9 14,5 Interest 1, Total Expenditure 645,2 769,1 6 63,7 746,3 789,6 26 Annual Performance Plan 2016/ /2019

27 13.2 ASSET AND LIABILITY MANAGEMENT Seda s asset and liability management works towards ensuring a balance between assets and liabilities. The largest asset is cash and cash equivalents, while trade and other payables make up a sizeable portion of the liabilities. Table 2: Asset and Liability Management (R Million) AUDITED FIGURES FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 ASSETS R million Carrying value of assets 37,2 59, ,5 Inventory 0,4 0,4 0,4 0,4 0,4 Receivables and prepayments 12,6 10,0 11,0 10,0 10,0 Cash and cash equivalents 273,8 185,4 148,7 150,3 149,4 Total assets 324,0 255,2 214,1 210,7 207,3 LIABILITIES Accumulated surplus/deficit 111,4 56, Finance Lease 10,3 0,0 0,0 0,0 0,0 Operating Lease 20,6 20,0 20,5 20,5 20,3 Trade and other payables 163,0 156,3 155,0 150,0 145,0 Provisions 18,7 22,0 23,6 25,2 27,0 Total equity and liabilities 324,0 255,2 214,1 210,7 207,3 27

28 13.3 CASH FLOW PROJECTIONS The table below details the organisation s cash flow projections for the 2014/2015 to 2018/2019 period. Table 3: Cash Flow Projections (R million) AUDITED FIGURES FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 CASH FLOW DATA R million Cash flow from operating activities -17,8-68,3 0, 0 26,0 27,7 Cash flow from investing activities -15,9-35,6-8,0-8,7-9,5 Cash flow from financing activities -0,6 0,0 0,0 0,0 0,0 Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year -34,3-103,9-8,0 17,3 18,2 308,0 273,7 169,8 161,8 179,1 Estimate of available cash 273,7 169,8 161,8 179,1 197, CAPITAL EXPENDITURE PROGRAMMES Seda s planned capital expenditure programme aims to ensure equitable access by small enterprises to support services. As a result, Seda branches need to be equipped to service large volumes of clients and also to reach clients in outlying areas. Table 4: Capital Expenditure (R million) AUDITED FIGURES FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 ACQUISITIONS R million Buildings: non-residential 3,40 2,10 1,00 1,00 1,00 Transport equipment 4,00 14,10 2,20 2,40 2,50 Furniture and office equipment 2,30 7,40 0,90 1,20 1,50 Computer equipment 7,40 12,00 3,90 4,10 4,50 Total Acquisitions 17,10 35,60 8,00 8,70 9, INFRASTRUCTURE PLANS Seda does not have an Infrastructure Plan as it does not have infrastructure projects large enough to meet the National Treasury requirements DIVIDEND POLICY Seda does not have a Dividend Policy. 28 Annual Performance Plan 2016/ /2019

29 B PROGRAMME PERFORMANCE Annual Performance Plan 2016/ /

30 This part of the Annual Performance Plan lists the strategic objectives that will be measured to give an indication at a strategic level of the levels of achievement of the Strategic Outcome Oriented Goals for Seda and Seda Technology Programme. These strategic objectives will be reported to the Board and the DSBD on a quarterly basis and ultimately form part of Seda s Annual Report. Seda s strategy and annual plan is implemented under three programmes, which are set below. 14. DESCRIPTION OF PROGRAMMES 14.1 PROGRAMME 1: ENTERPRISE DEVELOPMENT a) Purpose: Provide needs based and growth oriented business support to small enterprises and cooperatives through Seda branches. b) Description of programme: Seda provides business related information, advice, consultancy, training and mentoring services in all areas of enterprise development. These services aim at providing solutions related to various business functions from production to human resources, finance, marketing and export development. Rural enterprise development and cooperatives are supported through the Cooperatives and Community Private Partnerships Programme (CPPP). Performance is expected to increase year on year on all strategic objectives with the exception of small enterprise assessment and advice, and the Basic Entrepreneurial Skills Development programme. The number of clients assessed and provided with advice is dependent on the available resources as well as complexity of client businesses. Seda aims to increase its proportion of clients with more than 21 employees, as these are the clients with the highest potential for creating jobs and contributing to economic growth. The complexity of these businesses will result in more time and resources allocated per client. The BESD programme is a multi-stakeholder programme, with an agreement that ends in 2016/ Annual Performance Plan 2016/ /2019

31 Programme Strategic Objective, performance indicators and annual targets for 2016/17 STRATEGIC OUTCOME ORIENTED GOAL STRATEGIC OBJECTIVE PERFORMANCE INDICATOR/MEASURE AUDITED ACTUAL PERFORMANCE MEDIUM-TERM TARGETS PROJECTED 2012/ / / / / / /19 Improve the sustainability of small enterprises and cooperatives Increase number of diagnostic assessment conducted on small enterprises Number of diagnostic 10,208 10,619 10,697 11,400 10,830 10,290 9,776 assessment conducted on clients businesses Increase number of clients participating in the Supplier Development Programme Number of clients supported through Supplier Development Programme Not Not Increase number of clients supported through mentorship and coaching Number of clients supported through mentorship and coaching Not Not Increase number of clients supported through trade facilitation Number of clients supported through trade facilitation Not Not Increase number of clients trained on national and international standards Number of clients trained on national and international standards Increase number of Cooperatives supported Number of Secondary marketing cooperatives supported Number of Primary cooperatives established Not Not Not Annual Performance Plan 2016/ /

32 STRATEGIC OUTCOME ORIENTED GOAL Improve the sustainability of small enterprises and cooperatives Increase Seda delivery network to reach underserviced areas STRATEGIC OBJECTIVE Increase number of clients participating in the BESD Programme Increase number of clients participating in the National Gazelles Programme Increase collocation points with identified partners Develop a framework for Seda branch location and resourcing PERFORMANCE INDICATOR/MEASURE Number of clients supported through BESD Programme Number of clients supported through National Gazelles Programme Number of co-location points Developed framework for branch location and resourcing AUDITED ACTUAL PERFORMANCE MEDIUM-TERM TARGETS PROJECTED 2012/ / / / / / /19 Not Not Not Not Not Not Not Not Not Not Framework developed and approved. 1,000 1,000 Programme no longer running. Programme no longer running. Implementation of framework Implementation of framework 32 Annual Performance Plan 2016/ /2019

33 Programme performance indicators and quarterly targets for 2016/17: REPORTING STRATEGIC OBJECTIVE PERFORMANCE INDICATOR/MEASURE PERIOD 2016/17 ANNUAL TARGET QUARTERLY MILESTONES 1 ST 2 ND 3 RD 4 TH QUARTER QUARTER QUARTER QUARTER Increase number of diagnostic assessment conducted on small enterprises Number of diagnostic assessment conducted on clients businesses Quarterly 10,830 2,383 2,924 2,166 3,357 Increase number of clients participating in the Supplier Development Programme Number of clients supported through the Supplier Development Programme Quarterly Increase number of clients supported through mentorship and coaching Number of clients supported through Quarterly mentorship and coaching Increase number of clients supported through trade facilitation Number of clients supported through Quarterly trade facilitation Increase number of clients trained on national and international standards Number of clients trained on national Quarterly and international standards Increase number of Cooperatives supported Number of Secondary marketing cooperatives supported Quarterly Number of Primary cooperatives established Quarterly Increase number of clients participating in the BESD Programme Number of clients supported through Quarterly 1, BESD Programme Increase number of clients participating in the National Gazelles Programme Number of clients supported through National Gazelles Programme Quarterly Increase colocation points with Number of colocation points Quarterly identified partners Develop a framework for Seda branch Developed framework Quarterly location and resourcing Approved Framework Not Done Not Not Annual Performance Plan 2016/ /

34 14.2 PROGRAMME 2: SEDA TECHNOLOGY PROGRAMME a) Purpose: Provides technology oriented interventions and incubation support to small enterprises and cooperatives. b) Description of programme: Through STP, Seda provides technology transfer, business and technology incubation services, as well as incentives for management systems implementation (such as ISO9001 and OHSAS 18001), product testing and certification, as well as machinery and equipment. Seda s projected medium term budget allows for an increase in the number of supported incubators, albeit not to the level that would be comparable with countries such as Brazil and India. Establishment of new clients under the incubation programme will be an area of focus going forward, particularly in provinces such as Limpopo, North West, Northern Cape, Free State and Western Cape. Programme Strategic Objective, performance indicators and annual targets for 2016/17 STRATEGIC OUTCOME ORIENTED GOAL STRATEGIC OBJECTIVE PERFORMANCE INDICATOR/MEASURE AUDITED ACTUAL PERFORMANCE MEDIUM-TERM TARGETS PROJECTED 2012/ / / / / / /19 Improve the sustainability of small enterprises and cooperatives Increase number of clients participating in the Incubation Support Programme Number of clients incubated 2,282 1,587 3,016 1,881 2,069 2,276 2,503 An accessible delivery network that includes under serviced areas Increase number conformity assessment and product testing support Increase the number of clients supported with Systems implementation Increase number of clients accessing Technology Transfer support Establish new incubators in prioritised provinces (including virtual incubators) Number of clients supported through conformity assessment and product testing support Number of clients supported with Systems implementation Number of clients supported through Technology Transfer Number of incubators supported Annual Performance Plan 2016/ /2019

35 Programme performance indicators and quarterly targets for 2016/17: PROGRAMME PERFORMANCE STRATEGIC OBJECTIVE INDICATOR REPORTING PERIOD 2016/17 ANNUAL TARGET QUARTERLY MILESTONES 1 ST 2 ND 3 RD 4 TH QUARTER QUARTER QUARTER QUARTER Increase number of clients Number of clients incubated Quarterly 2,069 2,069 2,069 2,069 2,069 participating in the Incubation Support Programme Increase number conformity assessment and product testing support Number of clients supported through Quarterly conformity assessment and product testing Increase the number of clients supported with Systems implementation Number of clients supported with Quarterly Systems implementation Increase number of clients accessing Technology Transfer support Number of clients supported through Quarterly Technology Transfer Establish new incubators in prioritised Number of incubators supported Quarterly provinces (including virtual incubators) Annual Performance Plan 2016/ /

36 14.3 PROGRAMME 3: ADMINISTRATION a) Purpose: Provides strategic leadership and support to the Seda delivery network to ensure successful implementation of strategy. b) Description of programme: i. Office of the CEO: Provides overall management of Seda s resources and manages the legal, compliance, board secretariat, Internal audit and risk functions. ii. Finance: Provides support with respect to financial resource allocation and management as well as supply chain management. iii. Corporate Services: Provides business oriented services in human resource management, facilities management, communications and marketing iv. Strategy and Information Management: Responsible for strategy formulation, monitoring and evaluation and management of information and technology. From a support functions perspective, the organisation will focus on budgeting and allocating more funds towards direct service delivery areas, such as the provincial network and incubation. The current vacancy rate, as well as introduction of specialist positions will have an effect on Seda s vacancy rate in the short to medium term. The medium term goal is to get the vacancy rate to 10% and maintain it at that level. Through partnerships the organisation aim to leverage funds to augment our budget allocation which is not growing, this initiative will ensure that we extend our services to more clients in spite of our limited financial resources. Another objective for partnership is to ensure that targeted established organisations affords our clients access to their supply chain thereby improving the sustainability of our clients. 36

37 Programme Strategic Objective, performance indicators and annual targets for 2016/17 STRATEGIC OUTCOME ORIENTED GOAL STRATEGIC OBJECTIVE PERFORMANCE INDICATOR/MEASURE AUDITED ACTUAL PERFORMANCE PERFORMANCE TARGETS PROJECTED 2012/ / / / / / /19 Effective and efficient budget management % of Seda budget 72.7% 74.3% 71.02% 73% 74% 75% 76% allocated to the delivery network. Effective and efficient human resource management Vacancy rate Not Not 27% 12% 10% 10% 10% Maximise support offered to Seda clients through stakeholder contribution Increase number of partnerships for small business development and support Number of partnerships sourced for small business development and support Not Not Not Not Increase financial support sourced from partners Value of service cost covered by partners Not Not Not Not 10,6 Million 10,9 Million 11,2 Million Programme performance indicators and quarterly targets for 2016/17: PROGRAMME PERFORMANCE STRATEGIC OBJECTIVE INDICATOR Effective and efficient budget management Effective and efficient human resource management Increase number of partnerships for small business development and support Increase financial support sourced from partners REPORTING PERIOD 2016/17 ANNUAL TARGET QUARTERLY MILESTONES 1 ST 2 ND 3 RD 4 TH QUARTER QUARTER QUARTER QUARTER % of Seda budget allocated to the Quarterly 74% 74% 74% 74% 74% delivery network. Vacancy rate Quarterly 10% 10% 10% 10% 10% Number of partnerships sourced Quarterly Value of service cost covered by Quarterly 10,6 Million 2.3 Million 3.3 Million 2 Million 3 Million partners Annual Performance Plan 2016/ /

38 38 Annual Performance Plan 2016/ /2019 C LINKS TO OTHER PLANS

39 15. INFORMATION TECHNOLOGY PLAN The ICT Plan positions the ICT function as key to the implementation of the organisation s mandate and ultimate attainment of the vision. The ICT strategy takes its cue from Seda s Strategic Framework and Strategy Map. To contribute to Seda s vision of being a centre of excellence for small enterprise development in South Africa, the Seda ICT function will work towards operating according to excellence standards and continuously adding value to the organisation. The ICT function will further work towards ensuring the development of innovative solutions that will enable Seda to meet its strategic objectives. Below are some of the areas being explored with business for possible development and implementation. Strategic Objective 1. Improve the sustainability of small enterprises and cooperatives ICT can provide an agile platform to enable Seda to deliver its services, programmes and products. This can be done through: Continuous improvement of the CRM system and integration with other systems. Improved communications with clients using CRM and mobile telephony. Introduction of a basic ICT course for SMMEs. Allowing clients to conduct online pre-assessments. IT involvement in hosting and development of Seda s diagnostic tools. E-Learning. Implementation of these initiatives would result in improved user satisfaction and productivity, and ultimately improved business performance by Seda s assisted clients. Strategic Objective 2. An accessible delivery network that includes under serviced areas ICT can play a critical role in the provision of secure, reliable and sustainable access to business support services through: Utilising social media to attract new clients and inform existing clients of key initiatives. Online provision of programmes such as access to markets. Automation of key processes will greatly enhance the organisation s support functions and also realise financial savings in the medium to long term. The Objectives Matrix articulates the alignment of the ICT Strategic Objectives to the Seda Strategic Objectives. Annual Performance Plan 2016/ /

40 Table 5: Seda and IT Objectives Matrix ORGANISATIONAL STRATEGIC OBJECTIVES IT STRATEGIC OBJECTIVES IT TECHNICAL OBJECTIVES IT OPERATIONAL OBJECTIVES Improve the sustainability of small enterprises and cooperatives To provide an agile platform to enable Seda to deliver its services, programmes and products. To develop and implement a service oriented Enterprise Architecture of infrastructure, systems, data and information structures. To implement security systems to ensure the security of information and other strategic assets. To implement cost cutting measures while improving operational efficiencies across the organisation. An accessible delivery network that includes under serviced areas To provide secure, reliable and sustained access to business support services. To develop and implement enterprisewide systems to enable the efficient execution of both core and support activities. To develop and implement an IT Service Management framework. To implement a resilient and scalable IT infrastructure encompassing server farms, distribution networks and workstations. To develop and implement operational policies and procedures to guide IT operations. To assist the Exco and Exbo Committee of the Board to govern the current and future use of information systems and technologies by developing and implementing an IT Governance, Risk and Compliance Framework. To develop and implement a resource plan that will identify and attract key technical and highly skilled personnel. To give assurance to EXCO and the Board in terms of continuity by developing and implementing a Business Continuity Management strategy and plans. 40 Annual Performance Plan 2016/ /2019

41 16. RISK MANAGEMENT AND FRAUD PREVENTION PLAN 16.1 RISK MANAGEMENT PROCESS AND STRATEGIC RISK REGISTER Seda Board and management annually assess the organisation s risk environment and come up with strategic risks that the Board manages through the Audit and Risk Committee. Operational risks are managed by management through Exco. The risks take into account the organisation s strategic objectives, the strategic focus areas and the high impact programmes/themes. Table 6: Seda s Strategic Risk Register STRATEGIC OUTCOME ORIENTATED GOAL RISK NUMBER RISK DESCRIPTION RISK CONTROLS ORIGINAL RISK RATING RESIDUAL RISK RATING Improve the sustainability of small enterprises and cooperatives 1 Inadequate funding 1. Partnership and stakeholder engagement. 2. Shareholder compact in place with the shareholder. 3. Strategic and business planning. 4. International fund raising initiatives by the CEO and the board. Moderate Moderate 2 Failure to service the upper end of the SMME 1. Supplier Development; 2. Gazelles 3. Incubation support programmes. 4. Skills development programmes for business advisors. 5. Quality assurance of service offerings ( CSS and IAS) 6. Design and implementation of high impact programs 7. Partnership with specialised service providers. High High 3 Failure to attract and retain critical skills 1. Bonus scheme. 2. Performance management and development system. High High Annual Performance Plan 2016/ /

42 STRATEGIC OUTCOME ORIENTATED GOAL RISK NUMBER RISK DESCRIPTION RISK CONTROLS ORIGINAL RISK RATING RESIDUAL RISK RATING Increase Seda delivery network to reach underserviced areas. 4 Inadequate ICT resources and Strategy 1. Availability of an Enterprise Architecture 2. Full implementation of Governance Framework 3. Availability of ICT Strategy High High 5 Lack of agility to respond to client needs 1. Seda website upgrade 2. Development of an e-portal High High Maximise support offered to Seda clients through stakeholder contribution 6 Inadequate Stakeholder Management 1. Engagement with Local Government; 2. Local, provincial and national marketing outreach program; 3. Provincial and National Forums. 4. Co-location Moderate Moderate 16.2 SEDA FRAUD PREVENTION PLAN The Seda Fraud Prevention Plan has been developed within the context of the Seda Enterprise Risk Management Framework. The main objectives of the plan are: Creating a fraud intolerant culture. Fraud Prevention. Fraud Detection. Fraud Investigation. Appropriate action (e.g. prosecution, disciplinary action). Appropriate recovery or the application of sanction. An independent organisation manages the Seda Whistle-blower Hotline. The Risk and Compliance Unit has the responsibility for receiving, investigating and reporting on allegations of fraud and corruption and recommending the required action to be taken by line management assisted by the Legal, Corporate Governance and Compliance Unit. Line management is responsible for the maintenance and implementation of disciplinary action and reporting criminal matters to the South African Police Service (SAPS). The Human Resources (HR) function has the responsibility of providing guidance and support to line management on the disciplinary process. The Legal, Corporate Governance Unit is responsible for providing guidance and support to line management on the civil and criminal proceedings. In the ultimate analysis, line management is the owner of all the above processes. 42 Annual Performance Plan 2016/ /2019

43 If the Chief Risk Officer is implicated, the matter is directed to the Chief Executive Officer (CEO). The CEO will investigate the matter by engaging the services of independent forensic investigators. If the allegations are correct, the CEO will take necessary action including disciplinary action or criminal action, and report the matter to the Chairperson of the Audit and Risk Committee. If the reported case to the Seda whistle-blowing hotline does not involve the CEO, the Chief Risk and Compliance Officer will investigate and/or subject to the approval by the Audit Committee, engage forensic investigators. Where the CEO is not implicated and the investigation indicates that the allegations were correct, the Chief Risk Officer shall disclose all details to the CEO, depending on the nature of the allegations, the sensitivity of the matter and possible risk to the organisation, report the matter to the line management recommending the required action to be taken by line management. Line Management should be assisted by the Legal and Corporate Governance Unit in the process of instituting disciplinary or criminal action. If the case implicates the CEO, independent forensic investigators will be engaged, subject to the approval by the Board. Where the report indicates that the allegations were correct, the Chief Risk Officer shall disclose all details to the Chairperson of the Board. The Chairperson of the Board may, depending on the nature of the allegations, the sensitivity of the matter and possible risk to the organisation, report the matter to the full Board. The Board shall take necessary actions including disciplinary action. If the allegations were unfounded, the Chairperson of the Board will save the report and not disclose the contents. If the Chairperson and Deputy of the Board are implicated, the Audit and Risk Committee Chairperson shall appoint independent forensic investigators and, if allegations are correct, shall take necessary action including disciplinary or criminal action. All reports will be investigated on their merits. Where reports are done in good faith but the allegations are found not to be true, the case is closed and not reported. The process ensures that innocent people are not negatively affected by malicious reports. Where it is found that the reports are done in a negligent manner (where means of verifying the correct information were available but not used) and with intent to cause malicious damage to another person, disciplinary action will be taken if the person making the report is in the employ of Seda. 43

44 ANNEXURE A: INDICATOR PROFILES EDD 1. Indicator title Number of diagnostic assessment conducted on clients businesses 2. Short definition Clients that have had a diagnostic assessment done on company operations or business idea 3. Purpose/importance To determines the possible intervention which can be implemented on the business/based on the idea 4. Source/collection of data Diagnostic Assessment Report, consolidated branch files 5. Method of calculation Total number of approved assessments reports during the reporting period. Where a client is assessed twice during the reporting period, the number of clients working with will be reflected as two. 6. Baseline 12, Target and target date for the indicator by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 1. Indicator title Number of clients supported through Supplier Development Programme 2. Short definition Number of clients assisted through supplier development programme, as a result of a partnership between Seda and a large corporate or a state owned entity. 3. Purpose/importance To ensure that Seda clients benefit from partnerships established with large corporates or state owned entities. 4. Source/collection of data Consolidated branch report 5. Method of calculation Total number of clients supported through supplier development programme. 6. Baseline None 7. Target and target date for the indicator 150 clients supported by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 44 Annual Performance Plan 2016/ /2019

45 1. Indicator title Number of clients supported through mentorship and coaching 2. Short definition Number of clients assisted with mentorship and coaching interventions 3. Purpose/importance Measures Seda s efforts to ensure that clients businesses are supported by experienced mentors and coaches to improve their business sustainability. 4. Source/collection of data Consolidated branch report 5. Method of calculation Total number of clients supported through mentorship and coaching 6. Baseline None 7. Target and target date for the indicator 100 clients supported by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 1. Indicator title Number of clients supported through Trade Facilitation 2. Short definition Number of clients assisted with trade facilitation interventions 3. Purpose/importance Measures the level of access and exposure for clients to local and international markets. 4. Source/collection of data Consolidated branch report 5. Method of calculation Total number of clients supported with trade facilitation interventions 6. Baseline None 7. Target and target date for the indicator 100 clients supported by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development Annual Performance Plan 2016/ /

46 1. Indicator title Number of clients trained on national and international standards 2. Short definition Number of clients trained in implementation of appropriate national and international quality standards 3. Purpose/importance To ensure that clients understand how to improve their product quality and/or processes by adhering the required standard. 4. Source/collection of data Training workshop reports 5. Method of calculation Number of training sessions held 6. Baseline Target and target date for the indicator 563 for the year ending March Data limitations None 9. Calculation type Non-cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 1. Indicator title Number of secondary marketing cooperatives supported 2. Short definition Secondary cooperatives that Seda s CPPP programme has assisted 3. Purpose/importance Indicate the level of growth of primary cooperatives to the level of secondary cooperatives 4. Source/collection of data Consolidated reports 5. Method of calculation Total number of interventions provided to formally registered secondary cooperatives 6. Baseline Target and target date for the indicator 45 by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 46 Annual Performance Plan 2016/ /2019

47 1. Indicator title Number of primary cooperatives established 2. Short definition Primary cooperatives that Seda s CPPP programme has helped establish 3. Purpose/importance Measures Seda s efforts in assisting rural based enterprises 4. Source/collection of data Consolidated report 5. Method of calculation Total number of formally registered primary cooperatives 6. Baseline None 7. Target and target date for the indicator 90 by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 1. Indicator title Number of clients supported through BESD Programme 2. Short definition Clients receiving support through the BESD programme (partnership between Seda, Dept of Higher Education and Training and GIZ). 3. Purpose/importance To measures Seda s efforts in assisting township and peri-urban enterprises 4. Source/collection of data Programme reports 5. Method of calculation Total number of clients supported through BESD programme 6. Baseline None 7. Target and target date for the indicator 1,000 by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development Annual Performance Plan 2016/ /

48 1. Indicator title Number of clients supported through National Gazelles programme 2. Short definition Number of clients who are supported through the National Gazelles programme 3. Purpose/importance To ensure that Seda expand its support to existing businesses to access national and international opportunities 4. Source/collection of data Approved Client list 5. Method of calculation Number of clients approved for the Gazelles programme. 6. Baseline None 7. Target and target date for the indicator 200 partnerships operational by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 1. Indicator title Number of collocation points 2. Short definition The number of collocation points between Seda and partner 3. Purpose/importance Demonstrates Seda s drive to expand its access to clients 4. Source/collection of data Collocation report 5. Method of calculation Number of sites where Seda is collocating with a partner 6. Baseline Target and target date for the indicator 26 by end March Data limitations None 9. Calculation type Non-cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 48 Annual Performance Plan 2016/ /2019

49 1. Indicator title Developed framework for Seda branch location and resourcing 2. Short definition The framework to determine Seda branch location and resourcing 3. Purpose/importance It ensures that Seda follow an approved structure in determining branch location by considering all possible factors. 4. Source/collection of data Approved branch framework 5. Method of calculation Number of approved branch framework 6. Baseline None 7. Target and target date for the indicator Approved implementation framework by end March Data limitations None 9. Calculation type Non-cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Enterprise Development 49

50 SEDA TECHNOLOGY PROGRAMME 1. Indicator title Number of clients incubated 2. Short definition The number of clients who received assistance or benefitted from Stp Incubation support 3. Purpose/importance Measure the number of clients supported by Seda incubators 4. Source/collection of data Number of clients supported 5. Method of calculation Total number of clients enrolled in all Seda incubation centers 6. Baseline Target and target date for the indicator 2069 for the year ending March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: STP 1. Indicator title Number of clients supported through conformity assessment and product testing 2. Short definition Number of clients approved for Product testing /Certification and Management Systems Gap Analysis. 3. Purpose/importance To assist clients to improve the quality of their product. 4. Source/collection of data Quality health checks reports, list of approved clients for product testing and certification 5. Method of calculation Total number of Quality Health Checks conducted Total number of clients approved for product testing and certification 6. Baseline Target and target date for the indicator 144 for the year ending March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: STP 50 Annual Performance Plan 2016/ /2019

51 1. Indicator title Number of clients supported with systems implementation 2. Short definition Number of clients supported with the implementation of management systems 3. Purpose/importance To assist clients to improve their management system in order to ensure that their product and services acceptable nationally and internationally. 4. Source/collection of data List of approved clients for management system implementation 5. Method of calculation Total number of management systems Total number of applications done for management system implemented 6. Baseline Target and target date for the indicator 36 for the year ending March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: STP 1. Indicator title Number of clients supported through Technology Transfer 2. Short definition Number of clients approved for technology transfer funding 3. Purpose/importance To assist clients through technology transfer support 4. Source/collection of data Approved client list 5. Method of calculation Total number of approved client applications by the adjudication panel 6. Baseline Target and target date for the indicator 69 for the year ending March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Stp Annual Performance Plan 2016/ /

52 1. Indicator title Number of incubators supported 2. Short definition Number of incubators that receive financial and other support from Seda. 3. Purpose/importance To measures Seda s efforts to increase its incubation footprint, in line with the DSBD s strategic intention of increasing the number of incubators in South Africa. 4. Source/collection of data Approved Business plans or Implementation Plans. 5. Method of calculation Number of Approved Business plans or Implementation Plans submitted by Incubators. 6. Baseline Target and target date for the indicator 56 by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: STP 52

53 ADMINISTRATION 1. Indicator title % of Seda budget allocated to the delivery network 2. Short definition The amount of funds spent in the provincial offices and branches as a percentage of Seda s budget for the reporting period 3. Purpose/importance Demonstrates Seda s drive to ensure that the majority of the funds are spent where service delivery takes place 4. Source/collection of data Financial reports Method of calculation Consolidated financial reports 5. Baseline 70.2% 6. Target and target date for the indicator 74% by end March Data limitations None 8. Calculation type Non-cumulative 9. Reporting cycle Quarterly 10. Indicator responsibility Chief Financial Officer 1. Indicator title Vacancy Rate 2. Short definition Number of positions approved on the organogram that are not filled at the end of the reporting period. 3. Purpose/importance To ensure that the organisation keeps its vacancy rate at a manageable level 4. Source/collection of data HR Reports 5. Method of calculation Total number of vacant position out of the total approved positions on the organogram. 6. Baseline 16% 7. Target and target date for the indicator 10% by end March Data limitations None 9. Calculation type Non-cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Executive Manager: Corporate Services Annual Performance Plan 2016/ /

54 1. Indicator title Number of partnerships sourced for small business development and support 2. Short definition Formal agreements entered into with large corporates and state owned entities to develop small enterprise 3. Purpose/importance To ensure that Seda identifies partners who can open up opportunities for clients that the organization support. 4. Source/collection of data Signed MoA, SLA, Agreement 5. Method of calculation Number of agreements signed by Seda and partner institutions. 6. Baseline None 7. Target and target date for the indicator 20 partnerships operational by end March Data limitations None 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Chief Executive Officer/ Executive Manager: Enterprise Development 1. Indicator title Value of service cost covered by partners 2. Short definition The financial contributions that partners make towards Seda service delivery costs 3. Purpose/importance Measures the financial contribution of Seda s partnerships 4. Source/collection of data Programme reports 5. Method of calculation Total funds transferred into Seda accounts during the reporting period 6. Baseline None 7. Target and target date for R10.6 mil by end March 2016 the indicator 8. Data limitations None. 9. Calculation type Cumulative 10. Reporting cycle Quarterly 11. Indicator responsibility Chief Executive Officer/ Executive Manager: Enterprise Development 54 Annual Performance Plan 2016/ /2019

55 Annual Performance Plan 2016/ /