The Business Performance Monitoring Tool (BPMT) is an initiative launched by Sharakah – The Fund For Development of Youth Projects (S.A.O.C.) in 2014 to offer SMEs a structured mechanism that – by analysing their performances – identifies strengths and weaknesses as well as the most suitable way to overcome difficulties and obstacles hindering their competitiveness.
Companies that ask for the assessment are required by Sharakah to share a series of documents to check basic information related to their work. These documents are then analysed by Sharakah experts who draft a report including the main findings. Following this first phase Sharakah experts dedicate a full-day site visit to collect other relevant information that will be summarized in a final report. The two reports are then compared to give experts a clear framework of the situation and draft an action plan to guide companies in their effort to improve their performances. In addition a dedicated Sharakah consultant is available for 12 months to support and assist entrepreneurs.
Sultanate of Oman.
Sharakah – The Fund For Development of Youth Projects (S.A.O.C.)
2014 – ongoing
The initiative is funded by Sharakah with the support of diverse Omani Public and Private Organisations.
The tool is accessible to existing SMEs who have completed at least 1.5 years. The service is free to Sharakah members, while the payment of a fee is required to other companies.
The aim of the initiative is to make available a well-structured mechanism to assess companies performances and more importantly to provide them with the competencies and tools to improve their work and make them as more competitive as possible.
The tool analyses SMEs performances to identify their strengths and weaknesses. The analysis is conducted in two phases:
The company provides Sharakah with a series of documents – like business plans, lists of clients and employees, tenancy agreement, bank statement, etc. – that enables the analysis of the performances according to diverse criteria that evaluate seven areas:
- compliance with regulations, general guidelines and administrative procedures;
- communication, evaluating the business’ communication capabilities and skills and the effectiveness of the used communications mechanisms;
- product/service quality;
- marketing and branding, evaluating the branding and the promotional capabilities of the business;
- human resources and capacity building, evaluating the measures, policies and procedures that the business implements to support the staff;
- financial and credit history, analysing the SME financial and credit position;
- policies and standardization, checking the business adherence to industry and international standards.
Once all documents have been analysed, a first report is drafted by Sharakah experts and shared with the company.
During the second phase Sharakah experts visit the company and carry out one day interview to employees, suppliers and, whether possible, clients. The findings of the site visit are then included in a final report that, compared with the first one, enables Sharakah experts to define the performance of the company. The assessment results are classified in a range from 0 to 100%:
- From 0% to 30%: this score indicates that the company performance is very scarce and need significant improvements.
- From 31% to 65%: performances are acceptable, meaning that all over all the company has good standards but there is room for improvements.
- From 65% to 100%: the company’s performances do not require any improvement as it established a good balance between sustainability and growth.
Once the performances are clear, companies are provided with an action plan focused on the area that needs to be improved. In addition to the action plan, a Sharakah consultant will offer assistance, support and advices for 12 months.
More than 150 SMEs took benefit from this service over the last 5 years. Sharakah conducted an evaluation of the BPMT on 24 enterprises acting in diverse fields which participated in the Khazzan Project, an initiative supported by BP Oman and implemented by Sharakah to support Omani SMEs growth.
Involved entrepreneurs particularly appreciated the assistance provided by Sharakah which was perceived as a fundamental support to gain competencies on how to have a clear business idea and develop it in a proper way. According to the results of the analysis the majority of SMEs accessing the programme improved their performances as showed by the following examples:
- A company acting in the field of healthcare and medical services improved its rating from the 27.86% to the 47.76%, in particular the areas with the highest impact have been the compliance (from 42% to 64%) and the financial and credit history that registered low performance of 24% in the first monitoring and grew up to 63% after the participation to the programme.
- One of the business assisted – a company dealing with consultancy services in sustainable development such as assessment of existing projects or development of strategies and policies – registered a good performance in the first evaluation step (59.5 %) that thanks to the involvement in the programme reached the 73.3% with relevant growth rates in compliance (from 55% to 88%) and financial & credit history area (from 39% to 57%).
- Significant improvements have also been registered by another company whose performances at the beginning of the journey were quite low (19.41%) but thanks to the support received reached better results (39.39%) by enhancing considerably the rates in the marketing and branding area (from 5% to 29%) and in the financial and credit history (from 8% to 41%). These are positive data, but the analysis also shows that other areas need significant improvements to impact the overall performance of the enterprise (i.e. policies and standardization area registered a very negative performance – 0% – in the first evaluation phase and reached only 5% at the end of the programme).
- There are also companies that registered an improvement of their general performances, but were not able to reach good rates in all the areas analysed by the tool. This is for example the case of a company whose general performance grew up from 19.73% to 30.25% but that didn’t implement adequate measures to boost the areas in which it was lagging behind.
The most relevant challenge is related to the fact that entrepreneurs are often reluctant to share information and documents, in particular regarding their compliance with financial and administrative duties. This typology of documents is of course crucial for a proper assessment, but the most important thing is – and Sharakah uses this to mitigate this challenge – that entrepreneurs are aware of the risks they face when they are not compliant. Sharakah found out that presenting them the worst situation possible is an efficient key to mitigate this challenge.
SMEs need to improve their performance in order to compete against larger corporates and to attract/maintain talents. Furthermore companies do not need someone who just says them what to do, they need to access a structured mechanism that enable them to identify problems and provide them with the competencies to understand which could be the most suitable solution to successfully manage its challenges.
Being a fee-based service the initiative is highly sustainable. In addition to this, the initiative is likely to be replicated considering the number of companies that took benefit from the BPMT so far and that continues to ask for accessing the tool.