Compliance is not simply a guideline dictated by best practice, but a legislative requirement which has created a profound impact on how organisations manage their entire value chain.
The CPA is, however, not a one-sided affair. The aims of the CPA are multiple, promoting and protecting the economic interests of the consumer, and improving access to and quality of information needed to enable consumers to make informed decisions. It also provides for consumer education and redress of issues and promotes consumer participation in decision-making processes concerning the marketplace and consumer interests. In order for this to be successful, the CPA requires responsible behaviour not only from businesses operating in South Africa, but from the consumers too.
According to Edward Carbutt, executive director at Marval SA, the effects of the CPA are far-reaching. "Since the act regulates the activities of all suppliers who market both goods and services, for service providers who do not supply a physical product, compliance becomes more of a challenge. The CPA regulates that products and services delivered should live up to the expectations of the consumer, amongst other aspects, which means that service levels must be clearly defined at the outset in order for the service provider to avoid falling foul of the act due to dissatisfaction on the part of the consumer."
Since consumers have now been empowered to lodge complaints against organisations, either in their personal capacity as a representative of an affected individual, or as a class action group of affected persons, a rise in consumer activism is to be expected. Penalties for contravention of the
CPA are severe, and organisations found to be guilty of contravention face a fine of up to R1 million or 10% of annual turnover, whichever is greater.
Says Marco Roodt, business strategist at Marval SA: "The implication of this for organisations is dramatic, since such a fine would drastically affect the profitability of even large entities and could mean the end of the business for smaller and medium sized enterprises. The value chain must now be driven by the need to protect the consumer, focusing on promoting access to information, fair marketing and sound business practices. This requires adequate corporate strategic planning, risk management, change management and marketing management, all linked into the effective use of IT and better IT governance."
ISO/IEC 20000 forms an important framework for and component of this governance, providing organisations with a set of guidelines and best practices to help them better manage their service offering and thus more easily comply with the requirements of the CPA. ISO/IEC 20000 is the international standard for service management, a code of best practice that can be implemented and more importantly measured, allowing organisations to actively measure continuous improvement based on the standards offered.
"For service organisations, obtaining the ISO/IEC 20000 standard not only gives consumers the assurance they desire that the services provided have been externally certified to international standards, but it also ensure compliance with the CPA. Risk is more effectively managed, information is made more transparent to the consumer, and a culture of continuous improvement is fostered to ensure business sustainability and continuity. By adopting the standards set out by ISO/IEC 20000, service organisations can not only improve their business, but can ensure that they remain on the right side of the law when it comes to consumer protection," concludes Roodt.
