Ansys

Q&A
Empowerdex Magazine

18 August 2017

Q: Ansys has made colossal strides, with a B-B BEE score that has increased by 37.98 points from
86.57 in 2016 to 124.55 in 2017. How did this come about? Please give some insight into how
you’ve been able to achieve this.

A: Ansys is acutely aware of the need for real and meaningful empowerment in the South African
business environment and B-B BEE is a key strategic focus for us. Contributing to the creation of a
fully inclusive economy that will simultaneously enhance socio-economic outcomes and enable us
to create and maintain an innovative, competitive and sustainable business is a key objective. We
are therefore extremely proud to be a Level 1 B-B BEE contributor and to have improved our
scorecard so significantly over the past year.

This has been the result of focussed attention on the priorities expressed in the ICT sector codes,
namely skills development and enterprise and supplier development (ESD). In the new codes,
supplier development and preferential procurement, which was previously listed separately, are
grouped together.

As importantly, we have made major strides in increasing black ownership - especially black
female ownership - over the past four years, something which we consider a major achievement.

At Ansys, we regard our commitment to BEE as an investment in a sustainable future rather than
as a business cost. We have a forward-thinking BEE strategy in place, which aligns to both
legislative requirements and ICT sector codes, and this informs all of our business decisions.

In line with this, Ansys has invested heavily in learnerships, internships and apprenticeships that
not only seek to address the skills deficits in the ICT industry, but which contribute significantly
towards achieving our targeted spend of 6% of the leviable payroll. As we have a policy of
absorbing as much of this talent into our own business as possible, we achieved 3.75 bonus
points for this in the latest ratings.

Within our own supply chain, we have focused strongly on partnering with accredited BEE
suppliers. As a result, we have exceeded our targeted spend in all of the following categories:
Exempt Micro Enterprises (120% of target achieved); Qualifying Micro Enterprise (118% of target
achieved); and Black Women-Owned Enterprises (210% of target achieved).

In addition to this, we have a policy of investing in enterprise development over a period of years
and not just within any given financial year. Bonus points were therefore awarded for
empowering enterprises to be long-term suppliers within the ICT sector.

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Q: Your gains were made despite the conversion to the revised codes of good practice, which
many companies expected would result in them losing ground. How did you experience the
conversion?
A: Ansys proactively aligned with the new codes and, as a result, found that the conversion
worked in our favour. As our priorities, investments and initiatives were aligned to the new
codes, this reflected on our scorecard.

Q: The skills deficit continues to be a challenge with regards to companies meeting both their BEE
management criteria and the new skills development target of 6% of the leviable payroll. How has
Ansys aligned its operations to mitigate against these and other challenges?

A: In terms of meeting BEE criteria at management level, Ansys has a formal BEE programme
that is aligned to national policy and legislation. The group compiles and submits an annual
scorecard and reports on progress at this level in its annual integrated report.

With regard to the new general skills development target, many companies experience difficulty
in spending 6% of their leviable payroll on training staff internally and find they are unable to do
so. We have therefore adopted a multi-pronged approach to skills development.

Our primary focus is to identify skills gaps within our own organisation and to focus on
addressing these. We identify these gaps through our performance appraisal system and address
them through our annual workplace skills planning (WSP) process. In addition, all business units
invest in SETA-accredited external learnership and internship programmes. This enables us to
have a broader impact in the ICT sector and to maximise expenditure by benefiting from partial
funding through the ICT SETA.

Q: Under the revised codes, your scorecard in the enterprise and supplier development (ESD)
category is largely dependent on the performance of your associates. What administrative and
operational adjustments has Ansys had to make in order to ensure that it can meet the
requirements in this category - and what have some of the challenges been?

A: The most significant challenge was to incorporate the new requirements into our procurement
policies in order to give greater weighting to BEE ownership when making buying decisions. This
was not an easy task as there is still a shortage of black-owned businesses that supply the high-
tech components we require in our business. According to the new codes, 52% of procurement
expenditure needs to be with black-owned or black female-owned suppliers and, unfortunately, a
supplier pool of this size does not yet exist in the ICT sector.

We have, however, managed to build critical and strategic partnerships with our ESD
beneficiaries, so that they can become financially and operationally independent, as well as long-
term suppliers to Ansys as a group.

Our group structure is also helping us to achieve the requirements outlined in the new codes.
Funds and expertise from various business units can be pooled in order to invest in

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 entrepreneurial companies, enabling them to accelerate their growth trajectory and
sustainability.

Q: Lastly, what is your overall impression of the new codes to date?

A: The main challenge we are facing is the fact that the new codes place greater emphasis on
majority black ownership. Although Ansys achieved 100% of previous targets in terms of being
black-owned, the new codes require that companies have a majority black ownership.

As Ansys is 45% black-owned, this naturally affected our most recent scores. Our shares are
publicly traded, so we would be able to improve this aspect of our scorecard if more black people
bought shares in the group and enabled us to push the level of black ownership up to 51%.

We are also of the opinion that the codes need to take into account control and not just
ownership, which would ensure that they are aligned not only with BEE objectives, but also with
JSE requirements.

In general, however, we believe that the new codes support transformation and are aligned with
government’s objectives of accelerating black participation in the economy, as well as improving
education and development in historically disadvantaged communities.

End.

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