From Pilots to Impact – What Every Corporate Needs to Know About ESD

Enterprise and Supplier Development (ESD) is one of the most important tools corporates have for driving transformation in South Africa. Beyond compliance, well-designed programmes can create new jobs, build sustainable businesses, and strengthen supply chains. But for many corporates, the first steps into ESD come with a hard reality check: pilots often fall short of expectations.

This doesn’t mean ESD doesn’t work. It means pilots reveal the weak points in design and execution – and corporates that pay attention to these lessons can build stronger, longer-lasting programmes.

Why Pilots Struggle

In our work with corporates across multiple industries, a pattern emerges. Pilots often face the same challenges:

1. No clear ownership.
   When ESD is treated as an add-on rather than a core business function, it lacks momentum. Without a dedicated owner or department, programmes drift.
2. Fragmented reporting.
   Too often, pilots run without strong reporting structures. Without regular data on SME progress, corporates cannot track ROI or adjust strategies.
3. Training fatigue in communities.
   SMEs have often been through countless workshops. When training is not linked to real supply chain opportunities, it feels like another hoop to jump through.
4. Entitlement and repayment resistance.
   When funding is perceived as an obligation – “the corporate owes us” – repayment of loans is resisted, and trust breaks down.
5. Minimal transformation.
   Without supply chain integration, pilots don’t deliver visible impact. SMEs may gain knowledge but remain outside procurement pipelines.

The result: a pilot that ticks boxes but doesn’t inspire confidence.

The Value of Pilots

It’s easy to view these struggles as failures, but in reality, pilots are powerful tools. They are learning laboratories that show corporates where the gaps are. They reveal what doesn’t work, so that future programmes can focus on what does.

Instead of judging a pilot on numbers alone, corporates should ask:

• What barriers did this expose?
• What systems were missing?
• How did SMEs respond to the interventions?
• Where do we need stronger internal alignment?

Pilots are not the end – they are the foundation for building a stronger long-term ESD model.

The Turning Point – Anchoring ESD in Structure

The difference between struggling pilots and impactful programmes comes down to one word: structure.

Corporates that succeed with ESD take these steps:

• Create a dedicated ESD function. Programmes need a home inside the business, with direct accountability to procurement or commercial teams.
• Build strong reporting systems. Regular tracking of SME progress, job creation, and supply chain readiness is essential.
• Align ESD with procurement. If opportunities are not ringfenced and integrated into the supply chain, SMEs remain stuck in training mode.
• Invest in trust-building. SMEs must see corporates as partners, not distant funders. This requires consistent communication and visible opportunities.

Why This Matters for Corporates

For corporates, the implications are clear:

• Tick-box ESD is high risk. It delivers little value to communities, fails to meet transformation expectations, and damages corporate reputation.
• Strategic ESD builds resilience. When SMEs are supply-ready, corporates gain reliable local suppliers, stronger compliance alignment, and community goodwill.
• Long-term ROI is real. Successful ESD strengthens the bottom line by reducing supplier costs, cutting risk in procurement, and building inclusive value chains.

Key Lessons Every Corporate Should Apply

From pilot challenges to programme design, five clear lessons emerge:

1. Don’t treat ESD as charity. It must be tied to procurement strategy, not a standalone CSI initiative.
2. Give ESD a home. Appoint a dedicated owner or department responsible for delivery and impact.
3. Measure everything. Set clear KPIs for SME readiness, supply chain integration, and job creation.
4. Build accountability with SMEs. Programmes should be framed as partnerships, with both sides responsible for outcomes.
5. View pilots as investments. Use them to test, adapt, and prepare for long-term programme rollouts.

Conclusion

Enterprise and Supplier Development is too important to leave to chance. Pilots may expose weaknesses, but that doesn’t mean they fail. It means they teach. The corporates that get ESD right are those that treat pilots as learning phases, adapt quickly, and commit to structured, long-term models.

The lesson is simple: ESD impact doesn’t happen by accident – it happens by design.

At Phakamani Funds & Solutions, we’ve seen how corporates can turn early pilots into engines of transformation. With the right structure, ownership, and integration, ESD delivers measurable results for both businesses and communities.

If your organisation is piloting or scaling an ESD programme, let’s talk about how to design models that deliver beyond compliance – creating resilient suppliers, stronger supply chains, and lasting community impact.