October 1, 2004

Debunking Myths, Overcoming Challenges

           Few would argue against the fact that even in 2004 there are still stereotypes and myths which cloud the issue of supplier diversity, both in terms of what it means and why it is an important factor in stabilizing a company’s bottom line. Also, a number of companies have begun to cut back on the total number of suppliers with which they do business, a move that only increases the level of uncertainty in an already ultra-competitive minority business marketplace           

          According to Peters, Exelon once did business with about 16,000 suppliers. Today that number has been cut to about 3,000. That being said, Peters noted that Exelon’s requirements for doing business with suppliers are stringent and that there are basic levels of preparedness — including training and credentialing — that are a must.

“Our thing is to make sure that everyone is getting an opportunity (but) it is important to know that companies are certified,” Peters said. “When you go through the certifying agencies, you have been scrutinized and we know that you’re legitimate.

          “If you don’t, we don’t know who you are.”

Both Peters and Smith said that the obstacles related to improving supplier diversity aren’t just a question of supply and demand and don’t always come from the companies soliciting minority business. They say that suppliers themselves sometimes come with problems which can take them out of the running for potential work with major corporations across the country.

          Smith said that a recent business opportunity fair actually had more buyers than minority suppliers. To some degree she attributed this to outdated supplier ideas about what being “minority owned” really means.

          “Many minority firms are buying into an outdated myth that says, ‘I don’t want to be known as a minority supplier’ as if being minority owned and offering a quality service are mutually exclusive, which they are not,” she said. “Those involved in supplier diversity don’t feel that way; they expect you to come to the table prepared.

          “‘Why should we have a problem saying ‘Hey, I have a great product or service, I can help your company and oh, by the way, I am a minority-owned firm?”                     

According to DeHaven, Accenture continues to battle the myths that companies are somehow compromising value and quality when using minority, women and small business enterprises (MWSBE’s) for procurement needs. That, he said, and the belief that doing business with MWSBE’s will be more expensive represent two of the biggest challenges in Accenture’s continued efforts to implement a more diverse chain of suppliers.

“Accenture currently uses MWSBE’S for supporting both internal needs and client engagements. We have found no reductions in value, quality or cycle time when using MWSBE’S.

“The businesses are as cost competitive (if not more so) than majority owned firms,” he said. “This has been confirmed in several key categories of spend including contractors, corporate housing and design agencies where women, minority owned and small businesses are included in Accenture’s list of preferred suppliers.”