[ Training consultants for SMEs ]

Raising standards for small businesses

By and large, the institutions offering services to promote small and medium-scale enterprises like chambers of commerce and industry are not adequately equipped for the task and in many cases lack the requisite market gearing. Smallish businesses thus have no access to professional services, so no significant demand develops – even though the importance of tailored SME promotion services catering to market requirements has been clearly underlined in recent years by the ongoing debate about “best practices”.

With donor organisations and state agencies revising their own remit, there is a growing need for service providers which operate on a cost-covering basis and are financially and organisationally independent. InWEnt sets out to satisfy demand by offering quality service programmes at fair market prices. In the medium term, this is the strategy of the future. The sustainability of such institutions, however, can only be assured by attractive products and efficient corporate organisation.


PROCESS training concept

Since 1993, InWEnt (formerly Carl Duisberg Gesellschaft) has been working in Southern Africa on the development of a set of training measures called PROCESS (Promotion of Consultancy of Entrepreneurs in Southern African States). Designed to raise professional standards in SME support organisations, the seminars provide a solid grounding in management consultancy services specifically tailored to meet the needs of SMEs.

The PROCESS programmes start with a theoretical part, which looks at tools for improving operational efficiency and strategic analysis and reviews typical management consultancy problems. There then follows a practical part, in which participants provide advice for real companies, directing the entire consultation process themselves and, at the end of it, producing a report and a list of recommendations. Report and recommendations are then professionally presented to the management of the company. Apart from the valuable content of PROCESS courses, what makes them particularly appealing for participants are the finely tuned, hands-on method of instruction and the chance to work with real companies conducting real operations.


PROCESS in Mozambique – A tailored project

Even compared with the task in the neighbouring states of the Southern African Development Community (SADC), professionalising SME consultants in Mozambique is a tough challenge. Because of the political situation in the past, many of the country's private companies are less than ten years old, so the SME sector is fairly underdeveloped. What is more, most management consultants who could offer services for SMEs tend to work for international financial institutions because the fees that are realisable in that sector are higher. Consequently, the group targeted by PROCESS – SME support organisation staff – is very small indeed.
The growth of the SME sector in Mozambique and the consultancy services it requires have recently been boosted by a series of events. One major development came in 2000 with the start-up of aluminium producer MOZAL, the biggest foreign investment project in Mozambique today. Since production started, MOZAL has sought to work mostly with local ancillary companies – but has frequently been frustrated by the relatively low quality standards of Mozambican firms.

To improve cooperation between MOZAL and local businesses, the World Bank has launched the ‘MOZAL Linkage Program’, which is designed to help local SMEs meet international standards. The aim, is to get some of the SME support provided by local consultants. Experts see this as a means of ensuring greater sustainability.

In the field of SME promotion, InWEnt’s objectives broadly coincide with the development policy interests of the World Bank. So the two institutions have agreed to cooperate, with InWEnt working with World Bank subsidiary International Finance Corporation (IFC) and its African SME promotion programme APDF (African Development Programme Facility).

The agreed cooperation project involves running a PROCESS programme to help strengthen the SME sector. The programme offers the possibility of pooling resources to train SME consultants and thus make a substantial contribution to supporting local SMEs. The incentives for SME consultants are in place: demand for SME consultancy services is assured at least by the companies seeking to meet the requirements for cooperation with MOZAL.

The PROCESS project in Mozambique has, as a consequence, been co-financed since July 2003 by IFC/APDF and the German government. In addition to the kind of PROCESS activities InWEnt conducts in neighbouring SADC states, the training programme in Mozambique includes post-seminar support for the SME consultants as an integral part of the course. For this, InWEnt is setting up a help desk to respond to local consultants' enquiries. Another primary focus of the work will be to strengthen the poorly developed SME consultancy market by boosting demand for consultancy services.


Project partners: universities and PricewaterhouseCoopers

Project partners in Mozambique include two private universities, the ‘Instituto Superior de Ciências e Tecnologia de Moçambique’ (ISCTEM) in Maputo and the ‘Universidade Católica de Moçambique’’ (UCM) in Beira, as well as the local branch of PricewaterhouseCoopers. The difficult situation in Mozambique made it necessary to find strong partners for PROCESS, partners with the kind of profile and reputation needed to win the confidence of entrepreneurs and consultants. In the present constellation, responsibility for the training courses rests with the universities (in two different cities); PricewaterhouseCoopers runs the help desk and provides premises for the project office. The partners have a long-term interest in continuing the training activities even after the project expires, so the sustainability of the programme should be assured.

PROCESS's first few months in Mozambique have shown that the cooperation between the World Bank Group and InWEnt on the one hand and the universities and PricewaterhouseCoopers on the other is a highly promising basis for project activities. Although the situation is difficult for small and medium-scale enterprises and the consultancy sector catering to their needs, entrepreneurs and consultants are interested in the training courses and open to discussing SME consultancy services in general.

Although it remains to be seen how much the SME consultancy market will grow in the future, the first signs of progress can already be seen. One enthusiastic course participant reported: “As a direct result of our workshop I landed myself some consultancy work with our ‘dummy course client’. Right now a signed contract is on my desk, and I’ll begin working on one of the recommendations we made in just a few weeks’ time. Already, they have indicated to me that after this project, they would want me to move on to the other recommendations. Thanks for your expert tutorship and guidance, things are happening!”

Bernhard Adam
is a senior project manager with InWEnt's "Sustainable Market Economy"
division bernhard.adam@inwent.org;