How to Get Business Value from Your Supplier Diversity Program

Industry experts explore 4 ways you can better connect your supplier diversity program with the business and demonstrate value

Latest Articles

Understanding Economic Impact Analysis: How it Adds Value to Your Supplier Diversity Program
Webinar Series: Supplier Diversity Masterclass
Supplier.io Integrates with Amazon Business

In a recent Supplier.io webinar, Shelly Brown, Supplier Diversity & Responsible Sourcing Champion, and Chris Sawchuk, Principal Advisor at The Hackett Group, discussed how supplier diversity leaders can align their programs with business value and drive meaningful impact across their organizations.

The supplier diversity landscape is evolving rapidly, with programs becoming increasingly critical to business success. As organizations face more scrutiny and regulations, the need for accurate data and strategic partnerships has never been greater. This blog post explores key insights from the webinar on how to maximize the business value of supplier diversity initiatives.

Why Supplier Diversity Is Important to Businesses

Supplier diversity has become a crucial element for businesses across various industries, including aviation, sports, entertainment, education, and healthcare. It drives innovation, enhances competitiveness, and helps companies better reflect and serve their diverse customer base.

A successful supplier diversity program has proven business benefits including increased market share, improved brand reputation, and stronger community relationships. It can also be a differentiator in winning new business and retaining existing clients who value diversity and inclusion. Brown pointed out how successful programs impact organizations at the executive level.

“If we’re helping dollars come in the door and building those relationships with the senior business team, and if you’re in a position to ultimately influence the conversation and strategy around the C-suite—excellent,” Brown said.

Actions to Improve Business Partnerships

To enhance partnerships with internal stakeholders, supplier diversity leaders should focus on demonstrating the value of their programs to the overall business strategy. Here are four key actions you can take to begin to build trust with your business counterparts:

  1. Develop sufficient business acumen to understand stakeholders’ objectives
  2. Align supplier diversity goals with corporate objectives
  3. Provide regular updates and success stories
  4. Collaborate on category planning and strategic sourcing initiatives

Sawchuk proposed a question: “How do you know that you’re a trusted advisor?” He explained that a key indicator is when business units seek out the supplier diversity team for insights before making decisions. This level of partnership can lead to business unit-specific targets, increased accountability, more successful bids, and improved overall results.

It’s crucial to share these successes widely within the organization. Make heroes out of the business leaders who champion supplier diversity and ensure that everyone understands the positive impact on the company’s bottom line.

Supplier Diversity as a Business Differentiator

Brown shared his experience with leveraging supplier diversity to stand out from the competition. He emphasized the importance of understanding the interconnectedness of supplier and client relationships.

“If you’re in the services business, take an opportunity to learn who your largest enterprise suppliers are,” Brown said. “Quite often, you might discover some of your largest supplier relationships are also your client relationships as well.”

By partnering closely with sales teams and executives, supplier diversity professionals can add significant value to customer relationships. For example, Brown described how he integrated an inclusive leadership strategy into his company’s enterprise client group, helping engage clients in new and meaningful ways.

This approach not only strengthens existing client relationships but can also be a powerful tool in winning new business. Executives who support and champion supplier diversity can become strong advocates for the program, monitoring progress, and driving continuous improvement.

How to Measure Impact

Measuring the impact of supplier diversity programs is crucial for demonstrating their value to the organization. The investment in diverse suppliers cascades through communities in three main ways:

  • Direct impact: The immediate effect on small and diverse suppliers
  • Indirect impact: The business generated for suppliers’ own vendors and service providers
  • Induced impact: The economic activity created in suppliers’ employees’ communities

However, measuring this impact can be challenging. Many organizations struggle to gather comprehensive data or may not fully understand the extent of their program’s influence. Failing to measure impact can lead to undervaluing the program and missed opportunities for growth and improvement.

“Yesterday we tracked spend, but tomorrow you need to be able to define and equate spend with impact,” Brown said. He emphasized the importance of using economic impact analysis tools, like those from Supplier.io, to understand the full scope of a program’s influence, including jobs created, wages supported, and taxes generated.

Key metrics to consider include:

  • Total diverse spend
  • Economic impact (jobs supported, wages, taxes)
  • Revenue influence (contracts won with diversity as a factor)
  • Supplier development and growth

Conclusion

To ensure supplier diversity enhances business value, leaders should focus on four key areas:

  1. Align supplier diversity with corporate objectives
  2. Connect with key business leaders
  3. Layer in new data proof points whenever possible
  4. Think globally

By taking these steps and continuously demonstrating the tangible benefits of supplier diversity, you can elevate your program from a compliance exercise to a true business differentiator. As organizations continue to recognize the value of diverse suppliers in driving innovation, competitiveness, and community impact, supplier diversity leaders have an unprecedented opportunity to shape the future of their businesses.

To learn more about how to measure and maximize the impact of your supplier diversity program, visit Supplier.io.

Latest Articles

Why Good Data Is TheBackbone of Supplier Diversity
3 Supplier Diversity Resolutions for 2023
The Supplier Diversity Metrics Your Leadership Team Expects