Hilton plans to double their sourcing of diverse suppliers by 2030. Salesforce is committed to spending $100M with Black-owned businesses over the next 3 years. Johnson and Johnson intends to increase their diverse spend by 20% and achieve a $4.5 billion in global impact spend with small and diverse suppliers by 2025.
What do all of these enterprise organizations have in common? They have dedicated years to achieving their diverse spend goals. While ideal to expand supplier diversity programs quickly and vital for small and diverse businesses to be included in sourcing events, it’s important to remember the impact on supplier diversity goals is incremental. It takes time to find the right suppliers to fit your organization’s needs, identify and track current and potential diverse spend, and bring these suppliers into your supply chain.
Now, this is not to say that larger impacts are not possible, so long as you are leveraging strong supplier data and using the right technology to advance your processes. In this blog we’ll examine the most important factors to consider when beginning your supplier diversity journey and you’ll learn how TealBook enables organizations to increase their supplier diversity spend without relying solely on net new suppliers.
Important factors within the supplier diversity journey
Whether your procurement team is looking to build a new supplier diversity program or expand an existing one, there are several things to keep in mind on your diversity journey.
Why implement a supplier diversity program
Supplier diversity has become one of the most important priorities of organizations around the world. In fact, The Hackett Group’s 2021 Supplier Diversity Study found that almost 75% of the 100 global and U.S.-based organizations plan to increase their diverse spend and expand existing supplier diversity programs within the next several years.
Why has supplier diversity taken such a front seat in the procurement process? When you consider the internal and external benefits supplier diversity offers, it’s easy to see why procurement teams should have a supplier diversity mandate.
A strong supplier diversity program can:
- Reduce risk and increase competition
- Expand business opportunities
- Attract talent
- Boost company reputation
- Create economic equity within the community
With these benefits in mind, it’s essential to understand what is needed to successfully grow your supplier diversity program.
A successful diversity program relies on strong data
Every decision made within procurement needs to be supported by smarter, more dynamic supplier data. This is especially important in regard to supplier diversity.
For starters, you need to have a solid grasp on whom you’re working with and who qualifies as a diverse supplier—i.e., your supplier data needs to be consistently refreshed, analyzed, and leveraged for all procurement decisions. Businesses are constantly changing, as are their diversity qualifications, so you may find suppliers you thought were qualified as small or diverse, no longer do, or vice versa.
It is also vital that you are able to track diverse spend and account for the suppliers receiving more or less of your budget. You may find you’re not spending nearly as much as you thought with diverse suppliers or there is room to reallocate budget to additional suppliers and increase qualified spend.
If you’re unable to rely on strong data to build or expand your supplier diversity program, the question becomes this: how can you leverage the right technology to make better decisions within your organization and achieve diversity goals?
A TealBook customer experience
When an enterprise organization came to TealBook, they had a goal to expand their current supplier diversity program. Previously working with a competitor, the organization was able to identify $352.8M in qualified diverse spend, equal to 3.1% of their total spend. TealBook established this as a baseline and got to work using our technology to uncover additional qualified spend.
Upon ingesting the organization’s data, TealBook was able to identify additional qualified spend in the amount of $112.9M. Post-implementation, we also uncovered an additional $89M in potential diverse spend. These immediate wins were then supplemented by longer-term achievements.
With TealBook, this customer met their Tier 2 goal of $32.3M while simultaneously identifying another $140M to be achieved. Finally, an additional $15M of diverse spend was identified through future sourcing and supplier discovery processes.
TealBook’s enhanced supplier diversity capabilities identified a grand total of $709.7M of incremental qualified diverse spend, a 100% increase compared to the work done with the original competitor. This was all achieved in one year, setting the customer up for huge success moving forward.
How does TealBook’s data and technology enable such impactful change with supplier diversity programs? Let’s take a look.
TealBook’s supplier diversity capabilities
By taking a data-first approach to procurement and supplier diversity and leveraging machine learning and AI, TealBook enables enterprise organizations to build and grow supplier diversity efficiently and at scale.
Address your Tier 1 supplier diversity goals by:
- Granularly searching through over 500K small and diverse suppliers
- Getting enhanced visibility into your diverse spend
- Saving and comparing diversity reports quarter over quarter or year over year
- Accessing self-certified suppliers to combat certification expiration.
Address your Tier 2 supplier diversity goals by:
- Inviting suppliers to upload their spend data
- Leveraging updated supplier outreach
- Tracking Tier 2 spend reporting
On top of our platform capabilities, TealBook is committed to ensuring our customers have the industry knowledge and support they need to excel as they grow their supplier diversity programs. Through our community programs, TealBook hosts a group that allows our customers to network with peers in multiple TealBook facilitated sessions and create individual executable supplier diversity programs specific to each organization.
Over the course of several weeks, customers can openly discuss the key factors in growing a supplier diversity program, analyze current policies, build out current and future goals for diversity tiers, and examine how TealBook can be used to increase supplier diversity spend within their respective teams. From your implementation and beyond, we work diligently to help our customers succeed.
Create impactful change with TealBook
TealBook makes it easy to begin or expand a diversity program, discover diverse suppliers and spend, and generate supplier diversity reports in a single click. If you’re ready to achieve your supplier diversity goals, reach out to our team today!
