Authored in collaboration with Ben Winter, Head of Growth & Marketing at Fairmarkit
supplier.io and Fairmarkit are excited to announce our official partnership. Over the last two months, we have had the pleasure to work closely to identify an opportunity to impact supplier diversity programs. Through our collaboration, we are committed to driving corporate spending to diverse vendors.
Today’s leading enterprises have a unique opportunity to make a lasting impact on the communities they serve by ensuring diversity amongst their supplier base and directing more spend to those vendors. Public commitments made by leaders across industries such as Jamie Dimon of JPMorgan Chase, Zander Lurie of SurveyMonkey, and Bracken Darrell of Logitech, have energized other organizations to do the same. As technology providers, we recognize that we have a role to play as well and view it as our responsibility to help make those commitments a reality.
The combined power of supplier.io and Fairmarkit gives procurement organizations an innovative solution to supplier diversity, allowing these programs to become a more integrated part of the sourcing process. Many supplier diversity professional have limited resources and often only have time to focus on large RFPs. Powered by our robust dataset and Fairmarkit’s automated sourcing platform, companies can now ensure that diverse vendors are identified, recommended, and invited to even in their tail spend which is often not managed centrally.
Tail spend provides low-hanging fruit to grow Supplier Diversity
Tail spend is typically considered the frequent, and often unmanaged, purchases that account for a relatively small percentage of a company’s overall spend, but a disproportionately large percentage of its total transaction volume. It is around 80% of transactions in volume, yet only constitutes about 20% of a company’s spend in dollars.
Given the frequency of these tail spend purchases, it makes it difficult to include them in supplier diversity programs because of the high volume of requisitions. It becomes nearly impossible for humans to manually intervene to properly identify, invite, and ensure compliance for thousands of transactions, and thousands and thousands of diverse vendors per request.
Removing these manual processes allows them to easily ensure that diverse vendors are identified, recommended, and invited to bid for every requisition — large strategic RFPs or small tail spend RFQ purchases. This leads to a multitude of benefits including:
1. Tail spend helps you hit your supplier diversity goals faster
Driving tail spend to diverse vendors helps you hit your supplier diversity goals faster. With a higher volume of transactions, procurement teams have the ability to invite more diverse vendors to bid. This helps organizations reach supplier diversity goals faster including how many diverse suppliers are being invited to bid per requisition, adding new diverse suppliers to your supplier database, and de-risking the overall supply chain by diversifying the number of suppliers and vendors you work with.
2. Tail spend gives diverse vendors a bigger chance of winning the business
We shared in our 2019 State of Supplier Diversity for Diverse Suppliers that one of the biggest challenges for diverse suppliers is difficulty being discovered by larger companies. 77% of the respondents had less than 50 employees that work at their company. In inviting these small businesses to bid on smaller purchases, tail spend gives diverse vendors a better chance of actually winning business, not just learning about the business opportunities available to them.
3. With tail spend, buyers can actively participate in including diverse suppliers
Using Fairmarkit's platform and supplier.io's data, buyers can easily include diverse suppliers at the time of purchase. The platform automatically recommends qualified suppliers that can be invited to bids - making it easy to increase diverse supplier participation across more opportunities.
4. Automation eliminates the limits on including diverse suppliers
Fairmarkit’s automation of tail spend sourcing removes many of the barriers of sourcing from diverse suppliers. Organizations can easily identify diverse businesses from supplier.io and Fairmarkit's directories. They also no longer have to restrict themselves to artificial limits such as “3-bids-and-buy.” It is now just as easy to invite tens of suppliers and increase the number of opportunities which include diverse candidates.
5. Driving supplier diversity programs through tail spend helps the economy
According to figures from The National Minority Supplier Diversity Council, certified MBEs generate $400 billion in economic output that leads to the creation or preservation of 2.2 million jobs and $49 billion in annual revenue for local, state, and federal tax authorities. Spending money with these diverse suppliers helps your organization plus the economy, both on a local and national level. It’s a win-win.
Our commitment to supplier diversity
We know supplier diversity is more than just the right thing to do and our impact needs to be more than just words in a blog. Whether you are just getting started, or have been building a supplier diversity program for over 20 years, supplier.io and Fairmarkit are here you help you achieve your goals.
If you are interested in what a more integrated, supplier diversity program could look like for your organization, please set up time with our team to learn more.
We look forward to learning more about your commitment to supplier diversity and how we can help!