i.            Support in MIS selection and migration.

The SME’s financial management and internal controls are significantly hindered by the lack of an appropriate ERP system and Management Information System (MIS). The SME relies on Excel to record its activities and is considering acquiring an ERP system such as QuickBooks or Sage. The changes in the MIS will require that the consulting firm conducts activities such as:  definition of the SME's requirements and specifications of the new MIS; identification of needs for hardware, network, communication and other infrastructure requirements; support in drafting the procurement/tender notice, support in analysis of the bids based, support in contract negotiation with the selected solution provider; support in data migration; support in system roll-out; support in issuance of the first reports issued using the new automated system during and after Go-live;  increased formalization to adapt the new MIS to existing processes and procedures. The consulting firm must ensure that the system outputs and reports meet the SME’s needs (e.g., issuance of management accounts, periodic reports for top management, periodic reports for the board, etc.). The SME will allocate necessary capital expenditure for acquiring the new system and ensure adequate hardware and ICT infrastructure.

Successful integration of ERP and MIS requires immediate staff training in technical skills (that should be provided by the MIS service provider) and longer time to operationalize the new systems and processes (change management process), which is where the consulting firm can add great value. Priority should be on improving the quality of financial and accounting reporting and helping the staff to use the MIS to its full capacity as a decision-making enabler. This should include enhanced reporting mechanisms that will help the SME to monitor its performance and compliance with loan covenants.

      ii.            Support in Finance and Accounting Processes

Given the current growth trajectory and anticipated expansion of the SME, its exposure to potential new financiers, it is crucial to formalize the business further and to develop tailored accounting and financial management policies, procedures, and tools, as well as, implementing risk reporting, enhancing bookkeeping and asset management, implementing sound credit management procedures, managing cash flow and treasury functions, and updating related policies are crucial.

The consulting firm will therefore be responsible for disseminating new or updated Standard Operating Procedures (SOPs) and providing comprehensive staff training through on-the-job or classroom sessions, as needed, which are integral to successful implementation. Once a robust framework is established, the consulting firm will guide the SME in producing consistent monthly management accounts and accurate financial projections. The consulting firm should support the SME to track key impact indicators, and basic or standard loan covenants collaboratively defined with the SME.

    iii.            Enhancements to HR management

The SME went through some HR constraints in the previous year, with the long-serving Finance Manager resigning in 2023, some staff capacities gaps (soft and technical skills), and distribution of roles issues which had an adverse impact on the SME. The SME therefore needs support to bolster the organizational structure, to review key functions, focusing on administrative management and adopt cost-effective solutions to address capacity gaps (recruitment strategies for filling vacant positions) and address the absence of clear role definitions for certain positions. Beyond the organizational structure, there is correlated need to formalize or update HR protocols for accounting and payroll, propose a strategy for succession planning, include grievance mechanisms, update health and safety protocols, and develop other protocols and policies deemed necessary.

     iv.            Enhancements to environmental and governance best practices

The SME’s business directly contributes to the achievement of SDG2 (Zero Hunger) and specifically, through its provision of affordable nutritious food and the organization of smallholder farmers, to targets 2.1 (covering access to safe, nutritious and sufficient food) and target 2.3 (looking at increasing productivity and incomes of small-scale food producers). There might be opportunities for the SME to making positive or reducing negative impact of its activities to SDG 8, SDG 1, SDG 5 (the company has no specific gender focus, but does employ many women for lower level, unskilled/casual tasks - Gender awareness training could add value), SDG 9, SDG 10 and SDG 13. Preliminary discussions at board and top management levels, around the need to put in place an impact management and measurement strategy, drafting the strategy, team and board roles and responsibilities, and selection of key impact metrics could improve the SME’s path towards improved sustainability.

Furthermore, the SME is faced with some environmental risks linked to the usage of pesticides or the usage of generators to operate the new seed processing plant. Formalizing an ESG policy with a focus on the environmental risks within an enterprise risk management system could help mitigate this issue. It is expected that the consulting firm will support the SME in designing an impact strategy to ensure they can adequately measure and mitigate their impact, including the selection, collection, and reporting of KPIs.

In terms of the governance structure, an advisory board is in place, which is a 3-member board consisting of a legal attorney, the founder of an NGO (ex-banker) and a business guru from the energy sector. Key roles of the board have been to assist in the recruitment processes (to provide an impartial view) in addition to its usual activities of offering insights into the SME’s strategic direction. As the SME is expanding and has access to more debt funding, there is a need to reinforce and set up a more structured board aligned with best practices. It is expected that the consulting firm advises on a governance structure that fosters effective participation from the SME's directors, strategic investors, local independent non-executive directors, and senior management team. This may include creating a board induction pack, defining board profiles and roles, outlining board composition and secretarial duties, designing board induction sessions and workshops, and providing training and capacity building for senior management, etc. The consulting firm will assist in organizing and preparing for local board meetings, including the 1^st board meeting, ensuring that the SME’s impact vision is documented and translated into a tangible action plan.

It is expected that the consultancy allows sufficient time for the SME’s staff and management to absorb the activities and pilot them (including testing and operationalizing the enhancements where applicable) before closing the assignment, ensuring the activities are not costly, complicated, or time-consuming.