Procurement Without Bias: Taking Supplier Diversity Beyond A Spending Goal

Marcell Vollmer

Supplier diversity is quickly evolving from a corporate social responsibility initiative to a strategic enabler. Increasingly, companies are realizing the competitive potential of supplier diversity programs – from greater market share among emerging customer segments and stronger stock performance to faster innovation cycles and entry into untapped markets. In fact, according to DiversityInc.’s 2016 ranking, many of the world’s largest companies – including Accenture, AT&T, and Walmart – are heavily investing in the power of minority-owned, women-owned, veteran-owned, LGBT-owned, and SBA-defined small-business vendors.

The sustained success of increased diversity depends on insights into every supplier’s operational and financial performance. Yet making such assessments without a hint of bias – conscious and unconscious – is more complicated than most people think. Without a broad range of creative skills, technical abilities, Big Data analysis on internal and external data, and personal experiences, procurement teams may be blind to the emerging opportunities and incoming risks in the supplier network.

To productively measure supplier diversity to secure long-term value and growth, the procurement culture needs to become as diverse and inclusive as the network it onboards.

Taking bias out of procurement with a transformed culture

Organizational diversity is quickly becoming an outlet for fostering innovation, understanding customer and business needs, outperforming the competition, and maximizing productivity and value-driven outcomes. And for chief procurement officers (CPOs), such benefits can translate into an incredible opportunity to deliver bottom-line value.

To strip bias out of procurement, CPOs should consider four fundamental building blocks in their workforce diversity strategy:

  • Gender intelligence: Improve overall collaboration and communication between men and women, which is essential to level the playing field for productive discussion. Some best practices include engaging in knowledge-sharing forums, promoting advocacy programs, and pursuing an assessment methodology and business certification standard for gender equality such as EDGE.
  • Cross-generational intelligence: Achieve greater success in innovation by engaging the experiences from people of all ages, roles, work styles, and career stages. The openness of intentional inclusion can lead to an environment where every team member can engage in breakthrough thinking and lend insight that leads to actionable decision making.
  • Culture and identity: Create a greater sense of community by empowering the many voices of the organization. By drawing on people’s differences, procurement can tap into its greatest strength: an engaged and motivated workforce that proactively searches for unrealized value and opportunity.
  • Different abilities: Focus on every employee’s unique abilities and skills – and provide an environment that is inclusive of those with special needs. To inspire different ways of thinking from a variety of backgrounds and capabilities, the procurement function should accommodate every person’s needs and work styles to eliminate any unnecessary barriers to innovative thinking.

Less bias brings greater value and opportunity for procurement

The playing field for vendors of all sizes, demographics, and abilities is forever altered. Technology, such as a business network platform, is providing unprecedented access to sales opportunities, supplier options, and insight that drive informed purchasing. To ensure the business procurement from the best suppliers available, a clear strategy for bias-free, diversity-driven culture and leadership is imperative.

For more on procurement strategies in the digital economy, see Predictive Procurement: How Big Data Will Change The Game.

Marcell Vollmer

About Marcell Vollmer

Marcell Vollmer is the Chief Digital Officer for SAP Ariba (SAP). He is responsible for helping customers digitalize their supply chain. Prior to this role, Marcell was the Chief Operating Officer for SAP Ariba, enabling the company to setup a startup within the larger SAP business. He was also the Chief Procurement Officer at SAP SE, where he transformed the global procurement organization towards a strategic, end-to-end driven organization, which runs SAP Ariba and SAP Fieldglass solutions, as well as Concur technologies in the cloud. Marcell has more than 20 years of experience in working in international companies, starting with DHL where he delivered multiple supply chain optimization projects.