How building business capability and changing procurement practices can create more inclusive economic opportunities.
How do businesses get chosen to supply large companies and what can make it easier for capable MSMEs to access those opportunities? The answer begins with procurement: the process organisations use to decide what they buy, which suppliers they work with and how those business relationships are managed. Procurement decisions do more than meet an organisation’s operational needs. They influence which businesses gain access to markets, secure contracts, build commercial relationships and grow. This makes procurement an important part of the wider conversation about economic transformation.
For small and emerging businesses, however, entering established supply chains can be challenging. An MSMEs may offer a valuable product or service but struggle to meet buyer requirements, reach procurement teams or demonstrate that it can deliver consistently. Addressing these challenges requires more than preparing businesses to compete. It also requires examining how procurement processes create, or limit opportunities for supplier participation. At the South African Supplier Diversity Council (SASDC), capacity building is central to supporting businesses as they strengthen their foundations and develop the capabilities needed to participate in economic opportunities. But for this development to translate into meaningful growth, supplier readiness must connect with procurement practices that enable businesses to access markets.
Procurement Is More Than Purchasing
Procurement is often understood as a process of sourcing products and services at the right price, quality and standard. These considerations are essential, but procurement decisions also shape the distribution of commercial opportunities. When MSMEs gain access to procurement opportunities, they can build revenue, establish customer relationships, develop a track record and potentially create employment. When opportunities remain difficult to access, even businesses with valuable offerings may struggle to grow. This raises an important question: are procurement processes creating meaningful opportunities for capable emerging suppliers, or are existing practices unintentionally making participation more difficult?
Requirements relating to compliance, supplier registration, operational capacity, financial resources and previous experience can serve legitimate business purposes. However, organisations should also consider whether their processes are proportionate to the opportunity, clearly communicated and accessible to suitable suppliers. Shifting the system does not mean abandoning quality, accountability or performance standards. It means examining how procurement can meet business needs while enabling a broader range of capable suppliers to compete fairly.
Building the Capacity Businesses Need
Creating more inclusive procurement opportunities is only one part of the solution. Businesses must also be equipped to respond to those opportunities. Capacity building helps businesses strengthen the knowledge, skills, systems and resources they need to operate effectively. It provides a foundation for developing capability which is the ability to apply those foundations in practice, respond to challenges and meet market requirements. At SASDC, capacity building is an important part of supplier development. Understanding what makes a business procurement-ready requires looking beyond its product or service to consider how the entire organisation functions.
Four areas help illustrate what this involves.
1. The Organisation: Establishing a Strong Foundation
A business needs appropriate organisational structures and processes to operate reliably. This includes ownership and board arrangements, employees, partnerships and the compliance requirements
relevant to its activities and target markets. Understanding these areas can help businesses strengthen accountability, organise their documentation and prepare to meet applicable buyer requirements. For procurement teams, this information can help establish whether a potential supplier meets the requirements of a particular opportunity. For MSMEs, strengthening these foundations can improve their preparedness to engage with corporate buyers.
2. The Business Concept: Demonstrating Value
Businesses need a clear understanding of their business idea, product portfolio, revenue model, customer portfolio and market position. These elements help a supplier explain what it offers, which customer needs it meets and how it creates value. For emerging suppliers, this clarity can make it easier to identify suitable procurement opportunities and communicate their value to potential buyers. It can also help them assess whether they have the capacity to meet a contract’s requirements. Buyers, in turn, benefit from clear information about what suppliers can offer and how their products or services align with organisational needs.
3. Customer Relations: Building Visibility and Trust
Networking, marketing, sales and service, communications and public relations, and branding all contribute to how a business connects with customers and presents itself in the market. A capable supplier may still struggle to secure opportunities if potential buyers are unaware of its services or cannot easily assess its offering. Strengthening customer relations can help MSMEs communicate their value, build professional networks and establish trust. But visibility also depends on whether organisations make procurement opportunities known and provide clear information about how interested suppliers can engage with them. Connecting supplier visibility to accessible procurement processes can help bridge the gap between businesses that are ready to supply and buyers seeking suitable suppliers.
4. Operations: Delivering on Commitments
Financial management, funding, production and deliveries, IT systems and facilities all influence whether a business can fulfil its commitments. A supplier may win a contract but struggle to finance materials, meet delivery schedules or scale production to the required level. Understanding these operational demands helps businesses identify gaps and prepare for the opportunities they pursue. Capacity building can help businesses strengthen their operations and develop realistic plans for growth. Corporate buyers also need to communicate their requirements clearly and consider whether their procurement arrangements support reliable, sustainable supplier relationships. The objective is to help businesses become more capable while ensuring that procurement opportunities connect to suppliers that can deliver the required value.
Strengthening these four areas can help MSMEs prepare for procurement. But a capable business cannot benefit from opportunities it cannot access. A supplier may have the right product, appropriate compliance documentation, a clear value proposition and the operational capacity to deliver, yet still struggle to enter an established supply chain because of limited visibility, restrictive processes or a lack of connections to potential buyers. This is where the responsibility for transformation extends beyond the supplier. Organisations need to consider how they identify potential suppliers, communicate opportunities, assess applications and engage with emerging businesses. They can also examine whether supplier-development initiatives are connected to actual procurement needs
Supplier Diversity as a Tool for Transformation
Supplier diversity encourages organisations to broaden participation in their supply chains by creating opportunities for diverse and historically underrepresented MSMEs. Its value lies not only in increasing the number of suppliers considered, but also in helping address barriers that prevent capable businesses from accessing markets. This requires supplier development and procurement to work together. Businesses need support to strengthen their organisational foundations, business models, customer relationships and operations. Buyers need procurement practices that allow suitable suppliers to be identified, assessed and considered fairly.
At SASDC, supplier diversity and capacity building are connected through the broader objective of supporting more inclusive economic participation. By strengthening supplier capabilities and encouraging engagement with inclusive procurement, SASDC contributes to the conditions needed for emerging businesses to pursue market opportunities.
Shifting the System from Intention to Action
Building capable suppliers is essential, but it cannot carry the full responsibility for transformation. Organisations must also examine the procurement processes and decisions that determine which businesses can participate in their supply chains. This means looking beyond supplier registration numbers to consider whether opportunities are accessible, whether requirements are clear, whether supplier development responds to real market needs and whether businesses can build sustainable commercial relationships. For businesses, understanding procurement and strengthening their capacity.
Published : 22 October 2026