Seven years after entering into a transformation transaction in an effort to boost its empowerment record and achieve Black Economic Empowerment (BEE) status, South African ICT services and solutions provider Dimension Data (DiData) has announced a 1.26 billion rand ($147 million) pay-out as the culmination of the 2004 deal. DiData also revealed details of its transformation projects, experiences and successes over the seven-year period.
It has been a big year for the South African ICT giant. The company won three Microsoft awards at the Microsoft Worldwide Partner Conference in July, achieved “Best Employers South Africa 2012/2013” accreditation by the CRF Institute, and was listed as an “Innovator” by the Info-Tech Research Group. It is on the back of these achievements that the company announces its next big success.
DiData signed the BEE transaction in September 2004, with the Black Economic Empowerment consortium led by Andile Ngcaba. At the time, the consortium comprised 9 groups, including a number of broad-based groups, and 2,177 Previously Disadvantaged Individuals (PDIs) who were in the employment of DiData South Africa (now DiData Middle East and Africa: DiData MEA). The consortium purchased a stake of 25.01 percent in DiData South Africa, which at the time was valued at 380 million rand ($46.4 million).
Over the seven years of the transformation, DiData has implemented a number of empowerment schemes. Of particular mention is the Employee Empowerment Trust, which not only provided financial assistance to 2,177 of the company’s employed Previously Disadvantaged Individuals, but also saw the provision of training courses, and skill and self-development initiatives to the group of employees.
Coupled with the company’s growth, the empowerment scheme has achieved significant results. While at the launch of the transaction, DiData comprised only 3,000 employees in three countries, the company now boasts 5,800 employees in 20 countries. Revenue from the African continent alone has grown from 700 million rand ($85.4 million) in 2004, to 1.5 billion rand ($183 million) at the end of 2011. Much of this increase is linked to the growth in public sector revenue – for which BEE status is a legal requirement – which soared from 162 million rand ($20 million) in 2004, to an estimated 1.4 billion rand ($171 million) in 2011. As such, DiData attributes its growth to the transformation transaction, with DiData Plc. CEO Brett Dawson explaining: “Transformation has opened up massive business opportunities during the period, with revenues in the public sector market, and across the rest of Africa growing over 750 percent and 110 percent respectively… Without question, the business would not have been able to achieve such outstanding growth rates without driving an aggressive transformation strategy”.
One of the initial projects implemented in 2004 on the signing of the transformation agreement, was the creation of the Broad-Based Empowerment Trust. The Trust saw the then nine broad-based community organisations become empowered and enabled in their work. Since the inception of the Consortium, broad-based membership has risen from nine groups to 35, with the groups providing a range of services and care to over 45,000 vulnerable individuals in South Africa. Consortium leader and chairman of DiData MEA Ngcaba detailed the success: “We have empowered 35 broad-based community groups…These groups align with the government’s national priorities of health, HIV/AIDs, education, women and children, job creation, and rural development.”
DiData also created an entrepreneurship programme, which boasts 75 percent PDI participation with a substantial number of PDI women entrepreneurs taking part in the programme. The programme involves the financial and general support of entrepreneurs as they build their start-up businesses, with assistance spanning 12 to 24 months after initiation. 57 broad-based entrepreneurs have already benefited from the programme.
On announcing the 1.26 billion rand($154 million) pay-out at the conclusion of the seven-year transaction last week, it is with some surprise but overarching pleasure that DiData heard the response from the Consortium. While the PDI Employee Empowerment Trust will draw to a close, with each of the 2,177 PDIs receiving their share of the 1.26 billion rand, the Consortium with its 35 broad-based community groups will re-invest the money into the Empowerment project for a further five-year term. As such, DiData will retain its (BEE) status.
Commenting on the double-success of the transformation transaction, and the future to come, DiData Plc. Chairman Jeremy Ord said: “Dimension Data is testament to the overwhelming positive impact transformation has made in business and society as a whole. We are a proudly South African company that has remained headquartered South Africa, while building a dominant global business and leadership position in the worldwide ICT industry. Transformation is not about a point in time transaction for us, but an on-going strategic journey which we remain committed. This is a very proud day for us.”
