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Supplier Diversity Blog by supplier.io

Supplier Diversity as Path to Procurement Getting a Seat at the Table

Businesspeople sitting at a table discussing important business goals

Procurement has always wanted a seat at the table. They want guaranteed acceptance by C-level executives, recognition that procurement makes valuable strategic contributions to the company, and the opportunity to provide input on decisions made beyond their own functional remit.

Savings calculations weren’t enough to earn procurement a seat despite companies’ reliance upon them through times of recession. Neither was their ability to help address the threat of supply chain disruption or third-party risk. With the increased visibility and interest directed toward supplier diversity programs, many procurement leaders are confident that they have now found an issue that will allow procurement to pull up a chair and stay a while.

According to the 2021 State of Supplier Diversity report, supplier diversity programs are owned by procurement in 71 percent of companies. This is true despite the emergence of Diversity, Equity, and Inclusion offices (DEI) and the surge of new supplier diversity programs founded over the last three years. 

Companies must realize that supplier diversity programs are different from the many other responsibilities procurement has taken on in the past. Keeping them close—both for the sake of their ability to drive inclusion and for the advisory role they can play—is an important and beneficial step. 

Supplier diversity programs improve brand reputation.

More than half of companies believe supplier diversity is a key influencer of brand value, according to the 2021 State of Supplier Diversity report. In fact, brand reputation is the way most companies measure the impact of their investments in supplier diversity. That positions supplier diversity as a top-line or revenue-driven issue. Having the team responsible for delivering those results in the room when important decisions are made seems like a wise choice. Procurement has the data to track progress against expectations and can make actionable suggestions to improve performance against company goals.

Executive-level decisions involve tough tradeoffs.

Each executive leader comes to the table to represent a particular point of view. Sales, finance, marketing, operations, R&D—each of them provides their input for discussions and decisions that have to take a comprehensive view of both opportunities and opportunity costs. If procurement is not present for those conversations, supplier diversity considerations and implications lose an advocate on the team best positioned to advise leadership about how decisions related to supplier partnerships will impact diversity spend. 

Supplier diversity affects management’s performance objectives.

In 2021, 39 percent of executives had part of their performance objectives tied to supplier diversity, the 2021 State of Supplier Diversity report found. This means that opportunities to include more certified diverse-owned businesses should be considered regularly for the sake of personal and operational success. In order to satisfy these objectives, managers have to be thinking about supplier diversity all year long, not just at performance review time. By keeping the associated goals and objectives front and center, procurement can help managers help themselves, their company, and their suppliers.

Historically speaking, procurement wanted a seat at the table as a mark of acceptance by corporate executives. Perhaps this is why the move wasn’t made in many companies. Now, however, it is in the company’s best interests to bring procurement into the fold, especially when supplier diversity and supply chain inclusion are important factors in executive compensation, brand valuation, and customer acquisition and retention.

To learn more about supplier diversity, download the full 2021 State of Supplier Diversity report.

State of Supplier Diversity

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The team has a long history in driving innovative solutions in supplier diversity. We believe that companies deserve solutions that are effective and provide measurable value and results. Started more than a decade ago, supplier.io has rapidly become a prominent provider of supplier diversity solutions to leading corporations. We currently support customers in automotive, healthcare, insurance, retail, manufacturing, education, and banking. One in five Fortune 50 company relies on supplier.io.