Fighting Poverty One Business at a Time

January 21, 2014 by Jeff Reich 0

Photo: Screenshot

Yunus Social Business Haiti country director Claudine François and her team can visualize key business information with SAP Business One. (Photo: Screenshot)

Today, a new breed of non-governmental organization (NGO) is creating a mindshift in the way we think about poverty and economic development. Organizations like Yunus Social Business (YSB) are leading the way with a new perspective and a new set of tools. SAP is partnering with them to help make a difference.

Founded in 2011 by Nobel Peace Prize Laureate Prof. Yunus, YSB helps create social businesses – small to mid-sized enterprises that generate profits to serve social objectives and address humanity’s most pressing needs. As a social business in its own right, YSB also starts incubator funds and provides advisory services to companies, governments, foundations, and NGOs. It currently runs programs in Haiti, Albania, Tunisia, Uganda, Brazil, and Colombia. It moves beyond conventional, one-time cash donations, and short-term emergency relief efforts. Instead, the group is aggressively launching sustainable social businesses around the world to strengthen individuals and communities over the long term.

SAP and YSB Social Business: a partnership for change

To illustrate the point, Claudine François, veteran business executive and YSB Haiti country director, offers an unexpected twist to a very familiar proverb: “We’ve all heard the saying ‘Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime,’” she says. “Our role at Yunus Social Business is to help the fisherman commercialize the fish – to really solve a long-term problem by creating a sustainable, dynamic fish market.”

Next page: YSB establishes seven social businesses with SAP support

The devastating 2010 earthquake in Haiti challenged YSB and SAP to put these bold ideas into action. Inspired by YSB’s approach to sustainable development, SAP committed financial support, employee expertise, and technical know-how to help set up an infrastructure to rapidly grow social businesses across the country. Since 2010, YSB has established seven social businesses with SAP support. The business models are as innovative as they are diverse. And by now, the partnership has the infrastructure to invest in significantly more projects within the next 18 months.

YSB’s engagement in the area of education is illustrative of the way the organization tackles complex problems with intelligent, unconventional solutions. The Haitian government is unable to provide adequate schooling for all children, particularly in rural areas. Lacking adequate, steady funding, many of the private schools are forced to lay off teachers and close. Social businesses promise to end this vicious cycle. The initial results are encouraging. In fact, YSB-sponsored startups are already generating enough revenue to cover the long-term operating expenses of 10 schools.

SAP Business One: managing customer relationships and retail operations

During the three-year startup phase in Haiti, SAP actively contributed to the overall strategic direction of the initiative and delivered the necessary operational and financial support. YSB, in turn, provided social business consulting, local knowledge and expertise, and additional donor recruitment. Once the initiative reached the operational phase in 2013, SAP co-CEO Jim Hagemann Snabe committed an additional €500,000 to the Social Business Incubator Fund that provides investment capital to YSB-sponsored social businesses. He also donated SAP Business One. This solution allows YSB to centrally manage the financials, customer relationships, and farming and retail operations of all social businesses from a single system.

Next page: SAP provides YSB with a unique selling point

Alexandra van der Ploeg, from the SAP Global CSR program, explains: “The SAP partnership with YSB in Haiti is a showcase example of how our company is having a powerful, sustainable impact on local communities following a crisis. By empowering YSB, we are becoming an innovative force for social change in the world’s underserved markets.” Rather than traveling all the way back to the central office in Port-au-Prince, for example, the social businesses can send business report results directly to the central office. From there, François and her management team can visualize key business information and generate real-time reports.

“When potential investors find out that our social business model runs on SAP, their eyes light up. They know that our business is run seriously, transparently, and that we are able to track every penny. It’s a big vote of confidence. It gives us a unique selling point that we can present to future investors and donors,” says François.

Startups create job opportunities and improve education

SAP and YSB social business startups are having an enormous, positive impact throughout Haiti. They have created as many as 300 jobs. As many as 1,000 children are now able to go to school and receive reliable and quality education.

Next page: The next steps for YBS

Moving forward, YSB hopes to build on this early success and use it as a template for future engagements worldwide. “The social business model we have implemented in Haiti has great potential anywhere in the world – from Haiti, Africa or Asia,” says François. “SAP software makes it easier than ever to build scalable social business models with a modest amount of seed money. It’s how we’re achieving a lot of transformation in communities.”

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