The Proven ROI of Supplier Diversity

Bill Duggan How do you define supplier diversitySimona Rabsatt Butler Supplier diversity is a business strategy that encourages a diverse partner ecosystem in the procuring of goods and services that support the fiscal and business goals innovation growth and evolution of any business Supplier diversity strategies encourage the use of companies that are 51 percent owned and operated by a woman ethnic minority veteran person with a disability or a member of the LGBT communityDuggan What segments does supplier diversity typically cover Are there any emerging segments now being coveredRabsatt Butler Diverse partners can be found in a myriad of markets andor business areas The challenge is often finding them andor their ability to manage the size and scale of most large companies Just like areas of business there are pockets of industries that have little or no diversity but there are opportunities to diversify if we think about things differently and consider joint venture opportunities Wherever there is growth new ideas and innovation there is sure to be a diverse supplier in the mix or on the horizonDuggan Does supplier diversity have proven ROI If so how do you knowRabsatt Butler It does and each company measures that ROI differently based on their business Whether first tier direct or second tier indirect spend measuring is a part of the strategy Ernst ampamp Young shared a study where 54 percent of companies claimed a 39strong link39 between supplier diversity and new business development Companies with diverse partner business strategies claim around 36 million in reinvestible funds for their company bottom lines for every 1 million spent in procurement costs The return on cost ROC generated for procurement operations by diverse partners over average partner performers EY reported as 133 percent Second tier spend is an evolving ROI measurement and conversation For partners that provide goods or services there can be a direct link between a company39s supplier diversity strategy and a partner39s ability to win businessDuggan Is supplier diversity typically led by sourcing or the multicultural marketing team or bothRabsatt Butler Different companies have this team andor lead in either of those business areas or they can sit within the diversity and inclusion team that may sit within an HR group or on its own I sit within the accounting team within a centralized procurement team I have a dual function leading marketing procurement and supplier diversity I connect cross functionally with team member resource networks Hispanic marketing efforts and others I aim to work this strategy into the cultural footprint of the company39s DNA By doing so it becomes an important business strategy that can become an assessment factor for potential team members giving our business another element to attract top talentDuggan Today many ANA member companies are challenged with the diversity of their own internal teams Why is it important then for ANA members to also be concerned about the diversity of their suppliersRabsatt Butler ANA member companies should be concerned about it all amp8211 diversity ampamp inclusion multicultural marketing and supplier diversity What it means to be diverse is ever changing in our society and that change equates to your consumer The browning of America majority minority by 2041 multiethnic unions polyculturalism the state of America today it all matters and it matters to a company39s bottom line I can39t say it any better than PampampG39s Marc Pritchard quotIf you are not doing multicultural marketing today then you39re not doing marketingquot It is the cycle of company success your company should reflect your consumer in as many ways as possible amp8211 employees partners product advertising etc Plus when you support a diverse business you are supporting your communityDuggan Are there any unique considerations for supplier diversity in marketingRabsatt Butler I see supplier diversity as I see hiring diverse talent We all have unique and individual qualities backgrounds knowledge experience etc that make us who we are but core skills against a job or service is the level playing field I either have the skill or service you need or I don39t I either can manage your scale or I can39t my diversity shouldn39t matter I think today companies are looking for the next big thing but aren39t taking a moment to determine if they are overlooking a potential win for growth and evolution by diversifying in the multitude of ways you define diversity I may over simplify yet if I have the skill or service you need hire me and compensate me fairly If I don39t figure out if there is a way to help me grow and evolve Let39s find ways to measure the ROI understand what discounts or added value I bring to the table and let39s grow and innovate togetherClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the 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The Proven ROI of Supplier Diversity

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