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Supplier Intelligence

7 Key Insights into the State of Supplier Diversity in 2017

state-of-supplier-diversity-what-we-learned-about-supplier-diversity-programs-in-2017.jpgWe at CVM Solutions wanted to learn more about the state of supplier diversity in 2017. We wanted to know what was happening in the trenches, from the supplier diversity professionals throwing all their energy into ensuring their programs are identifying, contracting, and developing diverse suppliers. So, we decided to ask them.

Our 2017 State of Supplier Diversity Report – Supplier Diversity Programs received input from 145 supplier diversity professionals across a range of industries. The answers provided incredible insight into where supplier diversity is currently, and where it’s going. Here are just a few of the things we learned (for a deeper dive into the data, be sure to download the full report):

Corporate responsibility and corporate culture are important drivers of supplier diversity.

Respondents to our survey could pick more than one response (and 76 percent chose more than three) and were given myriad options to choose from when asked what the primary drivers are for their diversity programs. Corporate responsibility was the most cited driver, selected by 74 percent of respondents. Alignment with corporate culture and workplace inclusiveness was next at 64 percent. Customer requirements (61 percent) was the only other choice that was cited by at least half of respondents, suggesting that supplier diversity fulfills different needs for different organizations.

Certification agencies are the most common way to find diverse suppliers.

In another question that allowed for more than one answer, two-thirds of respondents said they found diverse suppliers via certification agencies. Third-party providers, other diverse suppliers, and Google search all were cited by at least 40 percent of supplier diversity professionals, suggesting there’s no one absolute best way to find vendors.

Nearly 70 percent of supplier diversity professionals rate their programs as at least somewhat effective.

Breaking this finding down further, 44 percent of respondents rated their programs as somewhat effective, and a full quarter said they were very effective. Only 13 percent felt their programs were ineffective.

Finding diverse suppliers is the biggest challenge for supplier diversity programs.

We gave respondents the chance to answer this open-ended question: “What is your biggest challenge in the supplier diversity space?” We received plenty of interesting answers, and the common theme that emerged was that finding diverse suppliers is tricky. The challenge isn’t in just identifying vendors to contract but also getting current procurement policies, processes, and philosophies to account for diversity initiatives. This reply was especially telling:

“We are a decentralized purchasing department, so the education of our end users who are purchasing for their departments or division can be challenging. As part of that challenge, we need to find ‘champions’ within each division to promote our diversity program.”

More than half of programs use Excel or another generic database solution to manage their efforts.

Surprisingly, 58 percent of respondents are employing Excel or some basic application to manage their programs, as opposed to just 19 percent that are using a dedicated supplier diversity software platform. Hint, hint: Supplier diversity solutions can streamline your processes, save time and resources, and deliver better results. Our respondents know this—of that 19 percent relying upon such software, 85 percent reported a supplier diversity program that is at least somewhat effective.

Only about a fifth of programs measure the economic impact of their efforts.

This caught us off guard as well: Just 19 percent of respondents answered yes when we asked if they measure economic impact. Larger companies (26 percent) tended to do so more than smaller organizations, but even that difference wasn’t significant.

Approximately a third of respondents have a formal supplier development program.

The survey revealed that 35 percent of respondents said they operate a formal supplier development program, and another 24 percent said their efforts were informal. Not surprisingly, the larger the company and/or the more mature the supplier diversity program, the likelier it is that it has a formal development program.

The data we have highlighted throughout this report underscore the importance of supplier diversity. Case in point: 84 percent of diverse suppliers say the existence of a corporate supplier diversity program influences their decision to purchase from such a company. More insights like this, from the vendor’s point of view, are available in our companion survey of 277 diverse suppliers.

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For over a decade CVM's mission has remained unchanged: lead the transformation of Supplier Diversity program management and support Supplier Diversity programs. CVM helps corporate supplier diversity programs in every stage of their evolution; from those that are just getting started, to the most advanced, world-class programs. Equipped with unparalleled data intelligence, superior technology and expertise guidance, businesses can effectively establish and advance their Supplier Diversity initiatives.