SAP Sustainability Shea Project Blog Post 1 : How is SAP Helping the World in the Bottom of Pyramid?
Since arriving back home in Montreal, upon the completion of a 6 month abroad fellowship in SAP, I have been really busy answering questions from family, friends and colleagues on how my fellowship was and what I did while in Germany and Ghana. I find myself always answering with “Amazing”. I would then roll into my next line, which I must have said a hundred times, “I was helping to improve the shea value chain, so the women in Ghana can increase their profit to have more economic opportunities.” If they grab a cup of coffee and start pulling the chair close to me to really listen up, then I go into a long storytelling. So, I thought a series of blogs would help me share my experiences, observations and thoughts on this fellowship project and the special experience I had while spending two weeks in Ghana, Africa. If you are one of those, with coffee in hand and pulling up a chair, then welcome to my journey. I will begin the blog series with some context and background information on the project, and then move on to share with you my experiences in Ghana.
About 3 years ago, while SAP was formulating its sustainability strategy to become the role model and an exemplar of a sustainable company, we raised a question to ourselves. “What about the informal economies in the bottom of the pyramid, where most of people have never experienced electricity bills, fancy chocolates or even bank accounts?” We want to be a company that can sustain economic success while protecting the environment and being socially responsible. Why not leverage our expertise from the global value chains and connect the bottom of the pyramid to it and create the economic opportunities for the next 4 billion? With this intent, SAP made a partnership with the micro financing expert, Planet Finance (PF), to explore this opportunity of making impacts in the emerging markets. PF recommended, after some field research, that there is a perfect case where SAP can intervene with its technology and achieve one of our sustainability goals by reinforcing the global shea value chain in northern Ghana. And that is how the Star Shea Network was born! SAP and Planet Finance saw the vision that we combine education, micro financing, and technology to improve the shea value chain. We believe in education; Training the women on how to produce premium quality products teaching them the basics of economics and business, and showing them how to build groups to support one another. All this knowledge will make them more competitive in the market. We believe in micro financing that enables women to manage their products without feeling the pressure of dumping the nuts at low market prices during the shortage of cash flow. Also, micro-financing can help the women invest in tools and equipment in order to become more productive. Most of all, we believe in technology as a main driver to create opportunities by creating efficiency and connecting the informal economy to the global value chain. So, SAP designed the following sets of technology components to reinforce the shea value chain. First, we provide the information on the shea global market price for the women using the simple SMS to the group mobile phone. Second, we developed the Rural Market Connection application that connects the global buyers to the women by managing the orders received online. The system propagates the orders by splitting it to be fulfilled by multiple women groups simultaneously and each women group gets informed on their orders. Third, by leveraging the rampant mobile infrastructure in Africa, we introduced the mobile application on a smart phone that manages the sourcing of shea nuts and traces the source of supply to the individual woman. This system also provides the real time transaction data from the scattered remote villages to the central head office to plan the logistics of the delivery and calculate the payment according to the quality analysis. Fourth, we also developed the Microloan Management application that helps the MFIs’ loan officers manage their loan portfolios and clients. Last but not least, we created a StarShea.com website to promote the network and business and also as a platform to receive online orders.
The StarShea Network has sold all 93 tons of its first year nut harvest to SAP’s customer, OLAM, and women benefited from this transaction by increasing their income between 59 and 82 % in 2010*. This year, the second buying season, our women sold about 200 tons of nuts to a new buyer Wilmar, which is also SAP customer. The StarShea Network also recently made its first big shea butter sale of 17 MT.
Where do we go from here? Since we have proven our model works, SAP is planning the next steps on how to make this success sustainable for the long term. Both SAP and PF share the vision that social business is the solution for long term sustainability. Social business is the business model that was created by the Nobel Prize winner, Prof Yunus and its goal is not maximizing profit but rather solving the social issues such as poverty. We believe in social business and SAP decided to invest in the new legal entity that would enable and facilitate the StarShea Network. The IT-enabled social business will continue to work for the success of women in the StarShea network by providing market access, training, quality control and market information. SAP believes this model will be self-sustainable.
Personally, this Shea project is very special for me. As a little girl who grew up in the emerging market country of South Korea, I know first-hand about some of the challenges people face in providing for their families. I also know what it was like to be a part of a country that had economic opportunities for everyone, especially for women. If given the opportunity, the women of northern Ghana can also play a pivotal role in the sustainable development of their economy. It was exciting to work with this great team, formed from SAP Research, Sustainability, SAP Volunteers and the Partner Planet Finance that shares this vision of empowering women to create their economic opportunities. SAP believes that one day we will witness sustainable economic successes even in the most remote areas, by leveraging our innovation and technology. I hope to share my excitement and passion with you. So, please join me on my first ever adventurous trip to Africa in the upcoming blog posts.
Post 2 Here Comes the Stilettos City Girl to Crack Ghanaian Shea Nuts!
* According to a case study by Stanford University