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David Cho, Chief Procurement Officer at the University of Massachusetts, sat down for a fireside chat to share his wisdom with the Boston business community. Although UMass recently launched their new centralized procurement platform that supports the five campuses only a year ago, the function is still in a growth mode while trying to achieve its mission of better and faster services to UMass and partner communities. Some of the concepts he will be sharing here may still be aspirational targets and not yet fully operationalized within UMass. Cho brings expertise and experience from 25+ years of driving transformation within procurement organizations.
Cho shares candidly that, “one cannot over emphasize the importance of supplier diversity today and its impact on our broader community.”
His insightful responses to procurement’s most pressing questions underscore this urgency and importance.
Question One: How can procurement be leveraged with a company’s diversity and inclusion goals?
Cho: Procurement should be part of the overall recipe of a company’s Diversity, Equity, and Inclusion (DE&I) targets, specifically in terms of how it engages with external third parties. Establishing supplier related diversity targets can be part of a holistic drive to match how institutions are promoting across the board. Ideally, over time, an overall dashboard that represents both internal (hiring, training, etc.) and external facing (supplier spends by DE&I category, etc.) insight become a powerful progress report.
Another example could be to encourage that all business reviews of preferred or major suppliers include visibility into their diverse second tier/subcontractor expenditures and how this spend is trending to provide a great barometer around DE&I engagement outside of the walls of your company.
Question Two: What incentives can leadership provide to drive results that will lead to increased diverse supplier spend?
Cho: In short, direct executive leadership involvement can be a terrific incentive to an enhanced supplier diversity program within any organization. Once a baseline is established that defines supplier diversity metrics, promoting targets that drive diversity initiatives can certainly help. Incentives, where possible, can certainly include individual and team recognition in many forms but, frankly, letting employees know that their senior and/or executive leadership is promoting this behavior, and is providing employees with the tools and influence to properly operationalize diversity spend growth more than compelling.
In general, employees want to promote these kinds of efforts, but it is ideally in an environment where the culture of the organization allows teams to take calculated risks where such actions could flourish. If executive leaders are directly engaged to demonstrate their resolve and they designate greater authority to those who can influence these outcomes, it can evolve into something much greater than the optics of embracing supplier diversity. I am confident that often, that kind of leadership alignment will be a tremendous motivation at the staff level to create a new reality.
Question Three: What are some challenges companies face on promoting equitable procurement practices? What solutions do we see emerging in the procurement field?
Cho: From my standpoint, a company’s desire to promote equality in terms of supplier diversity is to ensure that businesses owned by underrepresented portions of our society have access to opportunity to bid, access to conduct business and from the procurement point of view, the real possibility of obtaining contracts which formally institutionalizes that access.
However, many decision makers have a tough time taking the leap of faith with potential diverse supplier partners who, many times, may not have that longer track record of performance. Onboarding a partner takes quite an investment of time and expends ‘credibility currency’. So, cultivating a partnership quickly to determine who can and cannot meet the targets of an enterprise can be difficult. Yet, there are certainly opportunities to promote younger, diverse companies to partner as a subcontractor (aka second tier spend) to a prime supplier. Some potential methods can include:
When businesses in the Commonwealth lead the way through collective collaborative efforts, diversity, equity, and inclusion can thrive within the region.
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