Supplier Diversity and e-Procurement: Why Your Initiatives Are Not at Odds

While minority-owned businesses risk being left behind in the e-business bonanza, large corporations risk inadvertently alienating minority communities by not partnering with diversity suppliers. Achieving automation presents obstacles for both sides, but...


  • Automating their diversity supplier initiative. This ensures the collection of accurate, real-time information on how much is being spent with which suppliers, giving a corporation the opportunity to better track its diversity spend and better report the results of its initiative to customers and minority communities.

  • Tracking opportunity. Not only does UtiliCorp track its diversity spending, it also follows which suppliers are bidding on RFQs to ensure that the company is providing MBEs with opportunities to compete for business. Currently, Carter estimates minority suppliers are bidding on as much as 70 percent of the company's RFQs.

  • Lowering the cost of entry for diversity suppliers. Michel points to General Motors and Boeing as examples of companies that have helped their first-tier MBE suppliers become Internet-enabled or waived fees for participation in online marketplaces.

  • Being realistic. Corporations must recognize the challenges that e-business presents for their minority suppliers, indeed for all their suppliers, and set goals and expectations accordingly. "Companies have to be realistic in their approach to doing business with all of their suppliers," says Carter. "We don't want to set unrealistic expectations for any company that strives to do business with us."

Keeping the Business Focus

e-Commerce is still a work in progress, says the NMSDC's Michel, and therefore it is still not clear what the eventual impact will be on supplier diversity. "While the general feeling is that this could be detrimental to a lot of minority business efforts on the part of corporations, who knows? Everybody suspects, but nobody knows."

Ultimately, all the stakeholders involved in a supplier diversity initiative must bear in mind that, at the end of the day, it's a business proposition, and both corporations and MBEs must benefit for the diversity efforts to be effective. Minority suppliers want to expand their market share with current and potential customers by leveraging whatever advantages they have at their disposal, including their low-cost structures, agile business models and MBE status. Corporations want to ensure that, with minority spending power rising rapidly, they capture the loyalties of minority consumers. As JCI's Layton puts it, "The way we look at it at Johnson Controls is that if we keep it in a business paradigm — meaning what can we do to help our customers reach minority consumers and, by helping our customers, exceed their expectations and get more business — then you end up with more jobs being created, more opportunities for minority individuals and more opportunity for minority companies."

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