The Role of BDS Providers
The functions and responsibilities of managers have been categorised into four main categories: planning, leading, organising and controlling. The POLC Framework, though not encompassing all the different facets of a manager’s role, is sufficient in defining the role of SMME managers, many of whom, management is a new role.
Business Development Support providers have traditionally focused their support on the Planning and Organisation function. Programmes are designed to help SMME owner/managers define their operational strategies and some, provide consulting services to assist in the organising of resources and implementing of the plans developed. Although planning is the first and most important function of managers, it is common knowledge that it cannot and should not be done in a vacuum. Planning involves decision making. Deciding what to do and deciding what not to do. Good decision making, requires information. Information about the business’ current financial, operational and market position, and information about all the available options. It is for this reason that, the less discussed function of Controlling, is important.
Controlling is essentially the definition of business performance management. It involves the setting of targets and standards, monitoring performance, comparing performance against targets and standards, and using the information to make informed business decisions that lead to increased effectiveness of mangers and efficiency of business processes. Without an effective controlling function in SMMEs, the planning function does not work optimally. And for BDS providers who are supporting SMMEs, without setting up the controlling function, both within the programmes and the organisations of the SMMEs, the measurement of impact of their support interventions is difficult to measure and report.
The information generated through a well-oiled controlling function is useful and important for the following reasons:
- or SMMEs, it informs strategic, tactical and operational planning decisions. The more information SMME owner/managers have about their business over time, the better their decision making about the direction of their business. Longitudinal business performance information also enables SMME’s access to funding, from traditional banks and/or private investors, as many funding organisations require proof of performance and not just future plans detailed in business and strategic plans.
- For BDS Providers, the information informs the design and implementation of support programme interventions to ensure the highest impact possible. Baseline and ongoing business performance information of the SMMEs being supported, illuminates the 3rd party risks to programme’s achievement of its impact targets and enables informed decision-making across the programme management life cycle.
- For Investors, the information informs decisions about which businesses to fund, enables risk measurement, growth projections and builds trust in the entrepreneurial and managerial skills of the entrepreneur.
By minimising the focus on the Controlling function of SMME owner/managers who are supported in BDS programmes, BDS providers are limiting their ability to provide effective ‘access to finance’ support to SMMEs, which is a real sustainability and growth need for many businesses. They are limiting their ability to monitor, measure and report on the impact of their business support interventions. Lastly, they are limiting managerial growth of SMME owner/managers, which ultimately is the real impact that will lead to lasting programme impact – the goal for many, if not all, business support programmes.
In the next article of this 3-part series, we will discuss the ways to establish the controlling function in BDS programmes and SMME organisations.