Supplier Diversity Plan: a Framework for Equitable Procurement Practices
A supplier diversity plan is a framework for organizations striving to develop and maintain inclusive, equitable procurement practices. By outlining strategies to identify, engage, and integrate small and diverse suppliers—such as historically underrepresented businesses owned by minorities, women, veterans, and LGBTQ individuals or those with disabilities—these plans enable public agencies to better address disparities in their procurement practices. This blog examines the importance and purpose of supplier diversity plans, the steps to create, implement, and monitor them, and the challenges and misconceptions public agencies may encounter along the way.
What is a Supplier Diversity Plan?
A Supplier Diversity Plan for public agencies and organizations is a strategic initiative focused on driving equitable access to contracting opportunities for small and diverse businesses. Public agencies and other organizations often adopt supplier diversity plans in order to maintain compliance with government regulations, drive equity goals, and support economic growth for communities.
Why is Supplier Diversity Important for Organizations?
Supplier diversity is important for organizations for a variety of reasons:
- Promotes equitable contracting – a supplier diversity program plan and strategy means that small and diverse businesses – such as minority-owned, women-owned, veteran-owned, disabled-owned, and LGBTQ+-owned – have a fair opportunity to compete for public contracts, which fosters economic inclusion and wealth-building in local communities.
- Maintains compliance with regulatory requirements – many public agencies and other organizations have goals and targets that drive their strategic supplier diversity program plan. Managing, tracking, and reporting on these requirements can be challenging. Many organizations rely on tools like B2Gnow Supplier Diversity software to manage their supplier diversity program plan and maintain compliance with complex regulatory requirements.
- Drives community engagement and organization reputation – by implementing a supplier diversity strategic plan, organizations demonstrate their commitment to transparency and equitable contracting, which supports an increase in public trust and a positive reputation.
- Promotes job growth and strengthens local communities – engaging and growing a small, local and diverse vendor pool supports small and diverse businesses within the local community resulting in job creation, generational wealth building, and positive economic impact. Further, it keeps more tax dollars in the local community.
What Are the Benefits of Implementing a Supplier Diversity Plan?
The benefits of implementing a supplier diversity plan are numerous. Here are a few key benefits of implementing a supplier diversity plan for both organizations and small and diverse vendors:
- Access to additional funds: In many instances, public agencies with robust supplier diversity programs may qualify for additional funding benefits due to strong diversity and inclusion initiatives.
- Positive economic impact: Engaging and providing an opportunity for small and diverse businesses to compete for government contracts contributes to job creation and positive economic impact.
- Wider pool of vendors: Organizations who are outreaching, engaging and growing a pool of small and diverse vendors often see increased competition, greater innovation, improved service, reduced risk, and a positive impact on their supply chain.
- Enhanced compliance, reputation and trust: Organizations who commit to a supplier diversity plan often have diverse business utilization goals to meet, and a supplier diversity program plan helps to fulfill these targets. When organizations achieve and meet their compliance goals and targets, the result is often a positive reputation for supporting diversity and inclusion, making organizations more attractive to small and diverse suppliers, stakeholders, and others in the community.
- Equitable contracting: Supplier diversity plans provide small and diverse firms with a fair opportunity to compete and win government contracts. Winning government contracts often results in increased growth and revenue for small and diverse firms, supporting their long-term success.
- Builds and strengthens partnerships: Supplier diversity plans often include educational workshops, networking events, and opportunities for small and diverse firms to connect and partner with large contractors and public agencies, setting them up for lasting success.
- Valuable resources and tools for small and diverse firms: Supplier diversity plans equip small and diverse vendors with resources, tools, and invaluable networking opportunities to compete more effectively, expand into new markets, and grow their role in the public sector supply chain.
How Do Organizations Identify Diverse Suppliers?
Organizations use a number of methods to identify diverse suppliers – many of these methods are manual and time-consuming. By leveraging a solution like B2Gnow Supplier Diversity Software, organizations can access one central platform enabling them to source more small and diverse vendors, facilitate vendor registration, engage and outreach to vendors, easily manage vendor data, and tap into the most comprehensive certified vendor database – with most directories available in real-time for a level of accuracy found nowhere else.
What Steps Are Involved in Developing a Supplier Diversity Plan?
There are several steps involved in developing a supplier diversity plan to ensure it’s sustainable, impactful and aligns with organizational goals and values. Public agencies, contractors and other organizations follow essential steps when developing a supplier diversity plan. Here are a few key elements that organizations should consider:
- Create supplier diversity plan goals and objectives: Ensure that your supply diversity plan has goals that are clearly defined and align with top-level organizational goals and objectives.
- Understand complex regulatory requirements: Research and understand any federal, state, local, etc. compliance requirements and regulatory mandates that may impact your supply diversity plan.
- Achieve stakeholder buy-in: Inform, educate, and secure critical stakeholder buy-in for your supplier diversity plan. This step is critical to ensure support and sustainability of your supplier diversity plan.
- Draft a supplier diversity plan policy document: Draft a plan complete with guidelines and processes that clearly outline your supplier diversity plan and initiatives.
- Set qualification criteria and certification: Define and create standards for vendor qualification and outline a certification process
- Develop a plan to start and grow your small and diverse vendor pool: Create a plan for how you will engage, outreach to, and grow your supplier diversity vendor pool. Consider leveraging a solution like B2Gnow supplier diversity software. B2Gnow allows organizations to tap into the most extensive, real-time certification directory and leverage powerful tools to create automated, targeted outreach campaigns to vendors for email blasts.
- Track, measure and report on the progress and success of your supplier diversity program plan: Rely on an all-in-one platform like B2Gnow to effectively manage, track, and report on your supplier diversity program. With a focus on compliance and equity, B2Gnow’s innovative software streamlines vendor certification, project data collection, compliance, and reporting processes, ensuring transparency and fairness in contracting practices. B2Gnow maintains North America’s largest database of over 500,000 certified, disadvantaged business entities, helping the federal government, more than half of state governments, hundreds of counties, cities, airports, general contractors, and Fortune 500 companies manage their supplier diversity and compliance programs through technology solutions for 25 years.
- Promote the success of your supplier diversity plan and program: Regularly promote the progress and achievements of your supplier diversity plan and program – both internally and externally, from articles to newsletters, to press releases, and more. This will help to raise awareness of the program and promote support and sustainability of the supplier diversity initiatives.
- Review and iterate the supplier diversity plan and program: Ensure that you are regularly evaluating your supplier diversity plan and program. Review challenges, needs, and opportunities, and iterate as needed.
How Can a Supplier Diversity Plan Improve Organization Performance?
A supplier diversity plan can dramatically improve public agency and organization performance. Here are just a few of the reasons why a supplier diversity plan can improve organization performance:
- Propels economic impact: Supporting and engaging small and diverse vendors by providing them with an opportunity to compete for government contracts drives job creation and strengthens communities.
- Grows the vendor pool: Organizations that leverage small and diverse vendors often benefit from increased competition, innovation, enhanced service, reduced risk, and a positive impact on their supply chain.
- Drives compliance and transparency: Numerous organizations and public agencies have inclusion goals and targets they are mandated to meet, and a supplier diversity plan ensures these targets are prioritized, leading to increased transparency as well as increased funding.
- Enhanced compliance, reputation and trust: Organizations that commit to a supplier diversity plan often have diverse business utilization goals to meet, and a supplier diversity program plan helps to fulfill these targets. When organizations achieve and meet their compliance goals and targets, the result is often a positive reputation for supporting diversity and inclusion, making organizations more attractive to small and diverse suppliers, stakeholders, and others in the community.
What Challenges Do Organizations Face When Implementing a Supplier Diversity Plan?
Public agencies and organizations may face challenges when implementing a supplier diversity plan. Common obstacles to implementing a supplier diversity plan include: finding and growing a diverse supplier pool, dealing with limited resources and a small staff, and complex tracking and reporting requirements. Due to these common challenges to implementing a supplier diversity plan, many public agencies, contractors, and organizations rely on tools like B2Gnow supplier diversity software to eliminate challenges and build an impactful, lasting supplier diversity program:
B2Gnow business diversity software provides customers with powerful vendor outreach and engagement capabilities – allowing customers to search, sort, and group vendors by a variety of parameters such as certification type, certification agency, race, gender, NAICs, and much more. Most importantly, finding certified vendors is a breeze with access to the largest database of certified suppliers – this certification data is native and real-time in the B2Gnow system.
From a tracking, reporting and compliance perspective, B2Gnow is second to none. Agencies and organizations rely on the power of B2Gnow to ensure supplier diversity compliance with federal and state regulations, ordinances, laws, executive mandates, and corporate resolutions. From 49 CFR Part 23 & 26 to public utility commissions, prevailing wage labor compliance, state, county, and city compliance regulations, tracking, and reporting, the system can even apply multiple programs against a single project.
B2Gnow supplier diversity software provides customers with unmatched time savings and efficiency. On average, customers who leverage B2Gnow to run their supplier diversity program save up to 60%-80% of time spent on administrative tasks, freeing them to focus on endeavors that make a bigger difference in the communities served.
How Do Organizations Track and Measure the Success of Their Supplier Diversity Plan?
An organization can track and measure the success of its supplier diversity plan by leveraging tools like B2Gnow Supplier Diversity Software. B2Gnow supplier diversity software is used by over 400 organizations across the country, including states, state DOTs, cities, counties, transits, airports, colleges, universities, utility companies, K-12 schools, general contractors, engineering firms, housing authorities, healthcare, and more. Organizations benefit from one solution to manage vendor certifications, handle prevailing wage labor compliance, expand their vendor pool, track and measure small and diverse vendor utilization, and access over 400 system reports, PowerBI access and data libraries, export options and API/web services. The robust tracking and reporting capabilities of B2Gnow allow organizations to easily visualize business diversity and report on the impact of their supply diversity plan and program. From supplier utilization to compliance metrics, organizations that leverage B2Gnow glean valuable insights that drive strategic decision-making and provide complete visibility into activities and the success of the supplier diversity program.
What Are Common Misconceptions About Supplier Diversity?
There can be misconceptions about supplier diversity. Some of these common supplier diversity misconceptions include lower standards, higher costs, decreased benefits, etc. The fact of the matter is that supplier diversity has a tremendous a number of benefits, including equitable contracting and increased opportunities for historically underrepresented groups, resulting in job creation and a positive economic impact on local communities. Additionally, supplier diversity drives benefits such as lowered costs, innovation, risk mitigation, and supply chain sustainability.
Conclusion
A well-executed supplier diversity plan can transform an organization’s procurement processes, creating economic opportunities, strengthening community impact, and driving innovation. By setting measurable goals, public agencies can ensure their efforts are impactful, driving meaningful and lasting change. For over 25 years, B2Gnow Supplier Diversity Software has brought a wealth of knowledge to help organizations start, pivot, and grow supplier diversity programs and achieve compliance goals. From states to state DOTs, cities, counties, transits, airports, education, general contractors, healthcare, and more – organizations benefit from one solution to manage vendor certifications, track small and diverse vendor utilization, manage prevailing wage labor compliance, and generate reports for program compliance and results. Organizations save up to 60%-80% of time spent on administrative tasks, freeing up time for endeavors that make a bigger difference in the communities they serve. Learn more and request a demo: www.b2gnow.com/demo
