Build Community Wealth with the Power of a Diverse Supplier Chain
Business and supplier diversity is critical to environmental, social, and governance (ESG) and diversity, equity, and inclusion (DE&I). Yet most organizations lack workforce diversity on the DE&I agenda. Instead, organizations have narrowly focused on procurement and contracting, with little connection to ESG strategy and other DE&I initiatives.
Due to unprecedented pressures faced by organizations, these SILOs are crumbling. Organizations face multiple problems today, ranging from investors and sponsors to Pandemics & geo-political supply-chain disruptions. In addition, they lack assets like access to capital, education, networking opportunities, and other resources that fuel sustainable growth.
A study by Oliver Wyman shows the initiatives & spend of Fortune 100 companies to implement & promote supplier diversity. Here are the details:
Oliver Wyman Diversity Spend Report
Supplier diversity is not a negotiable option for Cloud 9 Infosystems. This helps us exhaustively achieve our ESG goals. During our experience for over a decade, we have witnessed the value of a diverse and inclusive corporate supply chain. Along this journey, we’ve learned that diverse and inclusive supply chains are:
1. More competitive
2. Able to unlock innovation
3. Provide access to new markets
4. Deliver socio-economic impact in local markets
Cloud 9 Infosystems has always embraced diversity. Founded 12 years ago with a handful of employees, we have grown into an all-inclusive team of 50+ employees globally. Today Cloud 9’s team has 40% women and 60% ethnic minorities. This has helped us to bring in-depth knowledge and combine them with experienced architects to cultivate fresh ideas in our organization. Combining this diversity with our constant pursuit of success has helped us win the trust of multiple clients.
Innovation – Here’s How a Diverse Supplier Chain Helps Your Organization Grow!
1. Environmental Goals
Take a Fresh look at your ESG goals, then look for diverse suppliers that can help you achieve them. Often small, diverse businesses have innovative solutions to problems but are overlooked during bidding.
Cloud 9 Infosystems attempts to work with local suppliers. This is a wonderful benefit of decreasing our carbon footprint while contributing to our local economic impact. My favorite part is when we support women and minority-owned businesses for our Cloud 9 events, such as purchasing promo products, corporate apparel, rental equipment, professional services, and more.
2. Access To New Markets
In addition to increased supply chain competition, Innovation, and costs, a diverse supplier provides you access to newer markets.
For example, Cloud 9 Infosystems secured a partnership with a diverse software supplier that provided access to a state contract beyond the supplier’s capacity. This is an excellent example of the value of supplier diversity and market share growth.
“I can’t stress enough the importance of networking. While I am still navigating the corporate partnerships, Cloud 9 Infosystems has made intentional efforts to create access for my organization through P2P partnership opportunities. I admire their initiatives to address the challenges faced by many women of color business owners today. ” – Sonali Jha, Founder and CEO of a SAAS company, Cunomial
3. Socio-Economic Impact
We have experienced the impact of efforts by large organizations like Microsoft and CDW to introduce diverse suppliers to their corporate supply chain. As a result, these organizations tend to hire diverse teams and give back to their local communities. As proof of our commitment to ESG, Cloud 9 Infosystems has leveraged a small but efficient supplier diversity program.
Purchasing food for corporate events from local bakeries, small family-owned restaurants vs. big brands, and Women and minority-owned businesses for advertising and marketing enables us to be on track for our social responsibility.
A McKinsey survey of 76 MWBEs shows that they are 67 percent more likely to hire minority talent than the average for US companies and to hire more minorities at the highest levels.
Small business owners play a key role in the diversity of their workforce.
Supply Chain Diversity: A Strategic Imperative for Corporate Organizations
At Cloud 9 Infosystems, we’re always committed to building a diverse team and workforce. Over the years, our team achieved incredible milestones to archive supplier diversity which includes:
Here’s How You Can Accelerate Supply Chain Diversity in Your Company:
1. Establish a Business Case and Get Executive Support
Supplier Diversity programs have become a board-level initiative in most organizations. However, only the procurement and supply chain team execute it. Our President has been our voice for the organization.
“Supplier diversity starts within company diversity and culture,” says Sonal, President of Cloud 9 Infosystems
Sonal avidly attends supplier diversity events, networks with groups like the NMSDC and WBENC, and is a true executive sponsor of our supplier diversity program.
That means it’s your responsibility to answer the following:
- What: A plan that maps back to your company’s intentions.
- Why: Accurately measure success and show ROI.
- How: Communicate goals, strategies, and how they will materialize
Success relies on demonstrating the progress and value to the C-Suite, educating the stakeholders, and securing their buy-in.
2. Determine Your Procurement Budget Spending
It is essential to understand where and with whom the procurement budget is spent to give us a baseline understanding.
For example, let’s say your organization spends $10 million annually across a handful of major categories, including real estate, marketing, IT (hardware and software), and professional services. Now you know where to focus your efforts on diverse supplier inclusion.
At Cloud 9 Infosystems, we achieved 35% on diverse spending and plan to increase it. This includes but isn’t limited to software and professional services, marketing, etc.
3. Identify Diverse Suppliers Aligned with Key Spend Categories
Once you understand the major spending units, you can expand your pool of potential suppliers within each unit.
NMSDC and WBENC are great platforms for connecting with diverse suppliers.
4. Establish Inclusive Procurement Policies
Mandating the inclusion of at least one diverse supplier in competitive supplier selection/RFP (request for proposal) processes will even out many playing fields.
5. Attend Supplier Diversity Events
Tier 1 suppliers often have long-established relationships and contracts with larger corporations. These networking opportunities can help Corporations create opportunities for prospective Tier 2 suppliers. Thus, Tier 2 suppliers can identify the “Primes” and compete successfully for contracts.
Getting involved with the councils can be a valuable resource to find diverse suppliers such as:
NMSDC – National Minority Supplier Diversity Council
WBENC – Women’s Business Enterprise National Council
6. Leverage Technology
A powerful AI tool can help you segment your supply base, visualize where you are today in terms of spend and diversity, and find potential diverse suppliers.
Aggregating that data into one visual dashboard helps you establish goals and KPIs, set your baseline, and easily calculate ROI.
7. Establish Goals and Best Practices
Every organization is unique, and thus, it’s vital to have clearly defined goals to measure the effectiveness of your supplier diversity program.
Our supplier diversity programs are a dynamic business strategy and are constantly improved through data points and KPIs.
8. Keep an Eye on Performance
Companies must measure progress after setting up the supplier diversity program. These parameters may vary based on your organization’s size, needs, and goals.
Key Indicators of Cloud 9’s Success in Maintaining a Culturally-Transformative Business Program:
● Establishing a Supplier diversity vision and strategic roadmap
● Diversity and Inclusion mandate
● Close connections to our external ecosystem of diverse suppliers
● Implementing an active, visible & respected executive-level sponsorship
● Rewards and Measurement initiatives & transparent communication
Conclusion:
Supporting DBEs, MBEs, and WBEs will eventually help you create a robust supplier base that fosters growth. So as you envision your corporate procurement strategy, be conscious of the value supply chain diversity could deliver to your organization.
