Top Supplier Diversity Programs Broaden Value Proposition To Drive Increased Market Share…

The Hackett Group Research Also Shows That Virtually All Diversity Suppliers Meet or Exceed Expectations

IBM, American Red Cross, and WEConnect All Spotlight the Value of Supplier Diversity Programs

MIAMI & LONDON, February 16, 2017 – Virtually all diversity suppliers meet or exceed expectations, and top corporate performers in supplier diversity experience no loss in efficiency, according to new research from The Hackett Group, Inc. (NASDAQ: HCKT). In addition, they see improved quality and often extract other benefits, including increased market share and access to new revenue opportunities. The research challenges the attitude of many business leaders, who worry that dedicating resources to supplier diversity will divert attention from other strategic activities.

To truly unlock the full potential benefits of supplier diversity efforts, The Hackett Group recommends that companies consider expanding beyond traditional goals such as complying with regulations. Top performers in supplier diversity recognize the value of objectives such as the ability to gain access to new markets and improve supplier partnerships. In addition, companies should look beyond basic measures such as the percentage of spend with diverse suppliers and calculate the true value of supplier diversity by using more sophisticated performance metrics such as satisfaction levels and other secondary metrics that are aligned to long- and short-term plans and objectives.

Companies with top-performing supplier diversity programs focus on several areas to make the most of their efforts, and go beyond the basics, the research found. These companies develop supplier partnerships, mentor local suppliers, collaborate with suppliers on product innovation, and share their experiences with other companies. They use supplier diversity as a reputation-builder to help increase market share and retain talent, and rely on social media to develop customer and brand awareness. They also actively educate internal stakeholders on the value of supplier diversity, and interact with local communities of suppliers and consumers to better understand the market, establish relationships, and share supplier diversity goals.

While most supplier diversity programs have a domestic focus, The Hackett Group’s research found that more than 40 percent of all global companies with a U.S. supplier diversity program plan to expand globally within the next two to three years. The Hackett Group recommends that companies manage U.S. and global programs as a single initiative, where appropriate. Partnering with corporate diversity groups, which manage workforce diversity, is also highly advisable, as is working with third parties that can help companies connect with diverse suppliers.

“Supplier diversity is evolving from a check-the-box corporate social responsibility requirement to a strategic enabler providing access to innovative products and increased market share in new and developing communities,” said The Hackett Group Research Director Laura Gibbons. “Top-performing organizations are taking advantage of this opportunity, and applying the tenets of social diversity to new areas such as supplier partnering, reputation management and global expansion with exceptional results.”

“There are certainly challenges that need to be overcome,” cautioned Ms. Gibbons. “It can be difficult to obtain the necessary support to invest in supplier diversity programs. Business leaders often worry that dedicating resources to this will impact procurement savings or even quality. But our research clearly shows that this is not true. Top performers are not seeing losses in efficiency, and quality often improves. Overall, the risks to focusing on supplier diversity are quite low, and the potential upside is significant. In fact, up to 10 percent of sales come with supplier diversity requirements, suggesting that the lack of such a program can even result in lost revenue.”

According to Michael Robinson Program Director – Global Supplier Diversity, IBM, “At IBM, we’ve been leading the way in corporate supplier diversity efforts for nearly 50 years. Today, we’re the only company, that we know of, which has a diverse supplier requirement in every country where we operate worldwide. We count on our supplier network, and ask the same thing of our women- and minority-owned suppliers as we do of our majority suppliers… that they help us provide value to the customer, strengthen our brand, understand our markets, and identify what’s coming next in the world of technology. It’s in our best interest to find the best suppliers, and a focus on supplier diversity is an important part of how we do that.”

According to Jillnell Joiner, Senior Supplier Diversity Manager, American Red Cross, “At American Red Cross, we’ve been very focused on expanding our supplier diversity efforts over the past few years, and communication has become a key best practice for us. We want to make sure suppliers, including minorities, women and veterans, understand that the door is open.”

“Some things are simple… if a supplier reaches out to us, we respond, no matter what,” explained Ms. Joiner. “Last year we also did workshops in 15 states across the country, in partnership with the National Minority Supplier Development Council, to help suppliers understand the extent of our supplier diversity efforts, and how best to do business with us. These workshops have been a great asset for us.”

According to Elizabeth A. Vazquez, CEO and Co-Founder of WEConnect International, “Some of the most successful supplier diversity and inclusion programs come from companies that have diversity and inclusion in their DNA. They are making strategic investments in the communities they serve not only in the U.S., but around the world. Global corporations must be committed to utilizing the world’s best suppliers. Smart companies will make a conscious effort to identify underutilized suppliers in every market that can bring value, including businesses owned by women, ethnic minorities, people with disabilities, members of the LGBT community, and other groups.”

DTE spent more than $410 million with certified diversity suppliers, representing nearly 20 percent of the company’s overall spend.

FIVE REASONS SUPPLIER DIVERSITY MATTERS

by Procurious HQ on 26/01/2017 01:16

We’re often told that supplier diversity is important for any business. But are you able to articulate exactly why this is?

Here’s a cheat-sheet to help you next time a business stakeholder asks why your organisation needs a supplier diversity programme.

1. Supply managers created a lack of diversity, so it’s up to us to fix it

There’s now a level of recognition that the historical underutilisation of diverse businesses is the fault of supply management professionals.

Contributing factors include a narrow focus on cost over other value, restrictive criteria for suppliers, inflexible and non-scalable policies. Underpinning these is a tendency for big business to be most comfortable working similarly sized entities.

A 2009 study from Pew Research has found that while minority-owned firms made up 41 per cent of all companies in the U.S., they only took in 10.9 per cent of overall revenue.

Here’s the good news. Procurement and supply managers are leading the charge to address the issue, with diversity spend now firmly on the agenda and rising every year.

Reversing the contributing factors above has led to a more inclusive focus on overall value (including social benefits) over cost, flexible and scalable policies and criteria for suppliers. There is also a recognition that the strongest business relationships are often made with smaller, more diverse suppliers.

There’s an impressive array of conferences and organisations dedicated to improving supplier diversity, including:

2. Customers are increasingly expecting diversity

Simply put, your customer base is diverse, so your business needs to be diverse as well. Partnerships with diverse suppliers will give your business a competitive advantage when facing changing customer demographics.

For example, if you operate in an area with a rapidly-growing minority population, your key relationships with minority-owned suppliers will become more important than ever.

While the public relations aspect shouldn’t be the prime reason for having a supplier diversity programme, it’s still important to track, measure and report on your diverse supplier base to win recognition from your customers for the work you have done in this area.

3. Diversity drives innovation

A study by CHI Research determined that small businesses generate 13-14 times more patents per employee than large firms. Since diverse suppliers tend to be small businesses, many companies use their supplier diversity programmes to tap into new and varied creative resources and the innovation that is occurring at these firms.

The fierce competition for business amongst diverse suppliers is another driver for innovation. Essentially, diversity brings a number of different backgrounds and life experiences into your supplier mix to overcome homogenous thinking with fresh new perspectives.

4. Diverse suppliers are often more flexible

Similarly, because most diverse suppliers are small businesses, they are usually able to offer greater flexibility, better customer focus and lower cost structures than larger businesses. Smaller, diverse suppliers are less likely to be tied down by restrictive policy, red-tape or innovation-stifling bureaucracy.

5. Well-known organisations are leading the way

Finally, some of the world’s leading companies are moving ahead with impressive supplier diversity programmes. Microsoft, for example, has recently exceeded $2 billion in annual spend with M/WBE businesses.

Another technology giant, Google, launched a best-practice supplier diversity programme in 2015. It brings key partners into the Google Academy for shared learning opportunities that will drive further innovation.

AT&T celebrate their suppliers as one of their “four pillars of diversity”, the other three being the organisation’s employees, community and marketing.

If your organisation’s supplier diversity programme is still only in its infancy, it’s important to increase your focus on this area or risk being left behind.

Interested in learning more about Diversity in Procurement? Register for ISM Diversity 2017, taking place March 1-3 in Orlando, Florida

Energy Industry Experts Gathered To Discuss Supplier Diversity, Procurement Best Practices And Sustaining Operations During Industry-Wide Downturn

HOUSTON, Sept. 23, 2015 /PRNewswire/ — Energy industry experts gathered Friday at the Energy Summit and Business Expo in Houston to discuss insights on the importance of maintaining a diverse supply chain, procurement best practices and opportunities for sustaining operations during the current industry-wide downturn.

The event was organized by the Houston Hispanic Chamber of Commerce and sponsored by Shell Oil. “This event was put together to provide a unique perspective on the implications of a changing global energy landscape on Houston’s economy,” said Dr. Laura Murillo, President and CEO of the Houston Hispanic Chamber of Commerce. “We had a significant turnout which demonstrates the importance of Houston’s evolving energy sector to our members.”
“My hope is that through today’s conversation, you as Hispanic business owners find opportunity to position your business as a partner with the oil and gas industry in the midst of this economic downturn,” said Greg Guidry, Executive Vice President – Unconventionals, Shell Upstream Americas. “The potential to unlock future growth for diverse suppliers is there and I’m committed to help Shell do its part. We hope to be the first oil and gas major to join the Billion Dollar Roundtable. ”

“We are putting in place, sponsored by our CEO, a specific targeted direct approach to increase our spend with minority and women owned businesses by 40% over the next few years,” said Deborah C. Stewart, Director Supplier Diversity & Diversity Outreach, Shell.

About the Houston Hispanic Chamber of Commerce:
The Houston Hispanic Chamber of Commerce is the leading regional advocate for the economic and civic interests of the Hispanic business community. As such, the HHCC serves as the Leader of Houston’s New Majority. HHCC represents approximately 90,000 businesses in the Greater Houston Region, ranging in size from start-ups to multi-national corporations, making the Houston Hispanic Chamber the largest in the country.

Hugh McColl reflects on 25 years of supplier diversity at BofA: ‘We understood that brains come in different packages’

In 1990, Hugh McColl Jr. was busy transforming NationsBank into the largest financial institution in the country.
“That time period was kind of like The Wild, Wild West,” the outgoing vice-chairman of Bank of America Corp. (NYSE:BAC), David Darnell, said at an event Wednesday. “It was acquisitions and moving fast. We all had goals, objectives and a lot of accountability around getting mergers done. It was a fast-paced time for the company.”
During that busy time, McColl, now the retired chairman and CEO of Bank of America, set another goal for the company: 10% of the bank’s suppliers would be minority or women-owned businesses and services.
It was the start of Bank of America’s supplier diversity program— an initiative that paved the way for BofA to be inducted to the Billion Dollar Roundtable this year. The Charlotte-based bank is the first financial services firm to join the group of 20 companies that have reached $1 billion in diversity spend annually. Today, Bank of America spends $2.5 billion on minority and women-owned suppliers.
BofA celebrated the 25th anniversary of its supplier diversity program Wednesday evening at The Westin Charlotte hotel uptown. Darnell and McColl conducted a fireside chat in front of an audience of the bank’s suppliers. At the end of the evening, recently promoted Chief Administrative Officer Andrea Smith presented McColl with the bank’s first-ever Visionary Award.
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“When you step back and think about that one idea and the deliberateness and the impact of that idea, I think you see the true essence of what it means to be a visionary,” Smith said. “So tonight it is my honor to present the first-ever Visionary Award to Hugh McColl for hatching this idea 25 years ago. For his commitment, his leadership, his vision and as he just said a minute ago, doing the right thing.”
McColl and Darnell discussed how the bank has changed over the last 25 years and the role diversity played as NationsBank scaled and expanded to become the Bank of America we know today.
“I think we really understood that brains come in all different kinds of packages,” McColl said. “We didn’t really care what the package looked like, as long as people could get the job done. We were looking for brains, energy and talent. We needed it.”

Here are highlights from the conversation with Darnell and McColl, edited for brevity and clarity:
The need for supplier diversity
McColl: Well, we were really trying to attract good people to our company and we were here in Charlotte and a lot of good people were located in cities all over the world. We knew we had to have a better city and a stronger business community. We looked around and saw lapses in small businesses, in particular an absence of minority-owned businesses. That got us interested in that. We were trying to figure out how to move that ball. We came up with the idea inside the company. We decided we were going to have 10% of suppliers be minority suppliers.
Dealing with pushback

Darnell: That time period was kind of like The Wild, Wild West. It was acquisitions and moving fast. We all had goals, objectives and a lot of accountability around getting mergers done. It was a fast-paced time for the company and I know there were some leaders that didn’t really understand that we needed this kind of program. You got some pushback. As the leader of our company, how did you handle that?
McColl: Internal resistance went away rapidly. I mellowed a lot as I got older, but when I was younger we would have a discussion about it, in which I did all the talking. We really would just tell them we want to do what’s right. It wasn’t very complicated, it was just doing the right thing and if you were good enough to be in charge or part of our businesses, you ought to be good enough to figure out how to get 10% of purchases from minorities and we did that.
I couldn’t decide whether to tell this story or not, but we had one very large telephone company essentially tell us they couldn’t do that, or wouldn’t do that and everybody said we can’t do anything — they won’t do it. I said, ‘Oh yeah? We could do something.’ So we started switching to Sprint. Guess what. They came around fast because we had a very large telephone bill.
We don’t do anything in a halfway deal. We liked to be the best at whatever we did. If we were going to have a minority purchasing business, we were going to be No. 1 in the country.
McColl’s secret formula
McColl: Something we shouldn’t lose is talking to our customers because people who don’t talk to customers, they will lose them. At the end of the day, customer satisfaction is a huge part of everything.
I always thought the formula was taking care of your own employees first. Then they will take care of the customers and that will take care of the shareholders.
Who hired Darnell?
McColl: I have to ask you a question. Did I hire you?
Darnell: I will tell you that you came to Chapel Hill to hold a ‘Meet the president of NCNB.’ I went, and that night — that’s when I decided that’s where I wanted to work, and it’s been a fun 36 years.
McColl: Well, we were glad to get you.
Words of wisdom
McColl: It seems to me that we should feel good that we’ve been successful and we’ve done it because we wanted to. We’ve had fun doing it and it’s the right thing to do. I don’t believe we want praise for it necessarily, we are just doing what we think is the right thing.
If I’m around here in a decade from now, which I plan to be — y’all cant get rid of my pension and it’s expensive by the way — I hope we can do this again.

National Assoc. of State Procurement Officials (NASPO) Priorities for 2015

Author: Elena Moreland/Monday, February 23, 2015

NASPO announces the release of its inaugural Top 10 Focus Areas for State Procurement for 2015. The priority areas will help narrow the association’s focus when developing new publications and research, planning conference sessions, and hosting webinars to share best procurement practices.

The top 10 ranking of state procurement focus areas reflects the collective voice of State Central Procurement Officers who voted on their top 10 priorities, based on the relevance and existing or anticipated impact on state procurement policies in their respective NASPO member state.

Based on the voting results, the highest priority area for state central procurement offices nationwide is Procurement Reform and Reengineering of Procurement Processes. The second highest priority is the commitment to use procurement data collection and Spend Analytics as strategic assets to enhance procurement oversight and efficiencies in all states. Planning and Managing Large Technology Procurements and the need to involve state central procurement offices early in the process came in third. Following closely in fourth place came Measuring Success in State Procurement, including outcome-based performance measurements and data-driven decisions.

You can access the complete Top 10 Focus Areas for State Procurement at: http://www.naspo.org/dnn/ResearchPublications/WhitePapersIssueBriefs.aspx

SoCalGas Reports Record Spending with Diverse Suppliers

LOS ANGELES /PRNewswire/ — Southern California Gas Co. (SoCalGas) achieved a record year in 2014 with 48.4 percent of its contracting budget going to woman, minority, and service-disabled veteran-owned business enterprises. Over the years, SoCalGas has steadily increased its procurement with diverse suppliers and is seen as a national industry leader.

“We have long known that our supplier diversity activities bring economic benefits to not only our suppliers, but also to the regional economies where they do business,” said Dennis Arriola, president and CEO of SoCalGas. “At SoCalGas, supplier diversity isn’t just a program or a department. It is an integral part of our strategy, our commitment to diversity in action and a smart and effective way to run our business.”

As a result of SoCalGas’ efforts, spending last year reached a total of $571.4 million with diverse firms or 48.4 percent of the company’s total procurement. Diverse suppliers provide SoCalGas with everything from meters to pipes to information technology to advertising solutions to financial investment advice.

One example of a diverse supplier is Loop Capital Markets, an African American-owned, full-service investment bank, brokerage and advisory firm. It was one of four companies selected to work on the utility’s $250 million, 30-year bond deal. Working with SoCalGas, Loop Capital Markets has seen firsthand the company’s commitment to supplier diversity.

“We’ve heard their executives talk about supplier diversity and how it’s part of their DNA. That’s been really clear from the interactions we’ve had,” said Sidney Dillard, partner, Corporate Investment Banking at Loop Capital Markets.

SoCalGas was recognized last year for its efforts with supplier diversity and won numerous awards from a variety of organizations including: Asian Business Association of Los Angeles, Elite Service Disabled Veteran Owned Business of Los Angeles, Greater Los Angeles African American Chamber of Commerce, National Latina Women Business Association, Southern California Minority Supplier Development Council, and U.S. Hispanic Chamber of Commerce.

SoCalGas’ commitment to diversity extends beyond its diverse suppliers to its workforce and the communities it serves as well. Last year, SoCalGas donated more than $4.8 million and thousands of volunteer hours to the more than 500 communities it serves, benefitting underserved community groups in African American, Hispanic, Pacific Asian, Asian Indian and Native American communities. And SoCalGas’ commitment doesn’t stop there. Its diverse workforce of more than 8,300 employees includes 65 percent minorities.

Birmingham Civil Rights Institute to Host Supplier Diversity Event

Birmingham Business Journal

SAM HODGSON/BLOOMBERG

Birmingham, July 9, 2015 / The Birmingham Civil Rights Institute and Skye Connect Inc. are partnering on a supplier diversity training event on July 15.

The training, which will focus on new metrics and strategies for supplier diversity, will be led by Alice Gordon, CEO of Sky Connect and Layle McKelvey, supplier diversity manager for United Airlines.

The training will demonstrate how supplier diversity can improve innovation, drive technology enhancements and lower costs in both the service and manufacturing industry. Gordon formerly led the supplier diversity efforts at Alabama Power Co., which has nearly 2,000 diverse vendors and millions in spending with diverse companies.

Registered attendees will also have a chance to learn how to do business with United Airlines.

The target audience is supplier diversity managers, human resource professionals, sourcing agents, procurement managers and others.

Novation Named Among “The Best of the Best” Supplier Diversity Programs by U.S. Veterans Magazine

IRVING, Texas, Jul 09, 2015 (BUSINESS WIRE) — Novation, the nation’s largest health care services company, was recently recognized by U.S. Veterans Magazine on its annual “Best of the Best” list for Supplier Diversity Programs. The magazine polled hundreds of Fortune 1,000 companies to arrive at this nonbiased list of organizations that offer the best opportunities for veterans, transitioning service members, disabled veterans, spouses and veteran business owners.

The annual list serves to give guidance and current information to readers with the goal of spurring more active outreach and diversity policies among government agencies and corporate entities. Study results are valuable to jobseekers, business owners, students, consumers and managers.

“Novation has a strong and ongoing commitment to encouraging and supporting diverse suppliers,” said Cathy Denning, Novation’s senior vice president of sourcing operations. “This recognition by U.S. Veterans Magazine is a testament to our belief that diverse suppliers are of crucial importance to a successful supply chain process. Through our Supplier Diversity Program, we will continue to foster relationships between large and diverse suppliers.”
Since its inception in 1999, Novation’s Supplier Diversity Programhas worked with Minority, Women, Veteran, and Small Business Enterprises by providing support and networking opportunities that raises their visibility and helps them connect with prospective customers. In 2014, alliance members and affiliates served by Novation purchased approximately $1.1 billion in goods and services directly from small and diverse suppliers. In addition, Tier II (subcontractor) spend with diverse suppliers was approximately $1 billion in 2014.

U.S. Veterans Magazine Names DynCorp to 2014 Best of Best Lists

U.S. Veterans Magazine Names DynCorp International to 2014 Best of Best Lists for Top Veteran-Friendly Companies and Top Supplier Diversity Programs

Business Wire

MCLEAN, Va.–(BUSINESS WIRE)–

DynCorp International (DI) has once again been recognized by U.S. Veterans Magazine (USVM) on their lists of Top Veteran-Friendly Companies and Top Supplier Diversity Programs as part of their 2014 “Best of the Best” evaluation.

“Founded by veterans, today we employee thousands of veterans and partner with veteran-owned businesses to bring our customers the best services possible,” said James Geisler, DynCorp International interim CEO.

For the annual evaluation, USVM polled hundreds of U.S. Fortune 1000 companies, reviewing employers, initiatives, government agencies and educational institutions. The lists were compiled from market research, independent research, diversity conference participation and survey responses that were performed by DiversityComm’s agents and/or affiliates. This year, more than 250 companies and institutions participated.

“Veterans are entrepreneurial, they assume high levels of trust, and they’re resilient,” said Mona Lisa Faris, president and publisher, U.S. Veterans Magazine. “This magazine was created to support our troops, and we at USVM are proud to recognize other businesses that are also making veterans a priority.”

USVM’s goal is to open employment, business and supplier opportunities within the federal government and corporate America for veterans, transitioning service members, disabled veterans, spouses and veteran business owners.