Most people may not know what SMWBE is. It is the acronym for Small, Minority and Woman-Owned Business Enterprise. More than that, it represents a significant opportunity for all companies to optimize costs, unleash innovation and make a real impact on our economy by tapping into underutilized talent which exists all around us. And in today’s world, there are other very talented pools of emerging diverse businesses such as Veteran Owned Businesses (VOB) and Service-Disabled Veteran Owned Small Businesses (SDVOSB).
It is very easy for companies to do business with large vendors or suppliers of the particular product or service they require. Quite honestly, no one is going to get fired for taking the “straight and narrow” or “safe path” to procurement. However, in today’s operating climate, risks abound. Optimizing costs is imperative, and innovation is a necessity to stay ahead of the competition. Now more than ever before, it is a smart move to balance your third-party/supplier portfolio with a healthy mix of these diverse businesses.
Your company will benefit in many ways from tapping into very experienced, entrepreneurial talent that is driven by passion to compete and deliver exceptional outcomes for their clients. And, of course, this is quite often coupled with very competitive pricing and value-added customer service.
This is not to say that you can achieve these benefits by simply closing your eyes and pointing to a diverse business on your computer screen. You do still need to impart a risk-based approach to procurement to ensure you follow the same risk assessment and due diligence processes you would for working with larger, more established third-party suppliers. The difference is that you will frequently uncover innovative solutions and service offerings, supported by people who have significant levels of past experience either working at larger companies or in many cases people coming from the military.
These smaller, entrepreneurial companies bring many of the same capabilities of their larger competitors, but you get the extra benefit of insights gleamed from a more diverse population of suppliers. With this also often comes a company that is more likely to provide very competitive pricing as they look to establish and grow their business. As you tap into the wider-perspective of supplier diversity, you will uncover strategic and tactical benefits for your company.
Don’t wait for regulatory compliance to be the sole reason your organization finally embraces supplier diversity because it could be too late. It is likely your competitors are already working on it, and they can be unleashing the growth and profitability achieved by embracing a real supplier diversity program.
Paul is the Director of Business Development & Client Success for Vendor Centric, a consulting firm that specializes in procurement and third-party management. Connect with Paul on LinkedIn or drop him a note at firstname.lastname@example.org.