Top 10 tips for developing a supplier diversity programme

Procurement Magazine takes a look at the top 10 considerations for procurement professionals developing a supplier diversity programme according to SpendHQ

For many in the procurement industry, CSR and ESG are high-priority trends among leading global executives. Many organisations today are facing pressures from customers, stakeholders and suppliers alike to be more diverse in their operations. 

What are the benefits of a supplier diversity programme?

  • Enhanced brand appeal for a broad audience
  • Stimulation of competition among suppliers to drive cost savings and innovation
  • Strengthens CSR efforts making the organisation more attractive to investors
  • A positive impact on a company’s reputation as an employer

Discover below, 10 of the top considerations for procurement leaders developing a supplier diversity programme:

1. Diversity lacks a common definition

When it comes to diversity, diversity can look different for customers, suppliers and stakeholders, depending on their requirements. 

A key way for organisations to ensure that they meet the requirements is through effective management and utilisation of data. Data is key to gaining certifications, as well as being able to provide insight into the details of suppliers.

2. The challenges of large volumes of data

While data is key, procurement as a function produces some of the highest amounts of data. Merging and analysing data is a challenging feat to tackle and often requires the implementation of digital solutions if an organisation is to gain the highest value from its strategy.

3. Certification data needs to be mapped out

Similar to the above, supplier diversity certification data is challenging to navigate when it comes to cleansing, normalising, and categorising data. Harnessing a dedicated data tool can help organisations to navigate this time-consuming task. 

4. Visibility beyond Tier 1

According to SpendHQ, a diversity programme can not be truly ‘world-class’ if you do not have depth of information and associated metrics. This has become a growing trend among customers, particularly larger ones when it comes to a diversity strategy.

5. Supplier diversity isn’t an aggregate 

It is important to be able to break down spend within an organisation, not only by classification but by location and category of spend. This comes back to the varying requirements of different stakeholders when it comes to a diversity strategy. 

6. Avoid siloed data

It is important for cross-functional collaboration that the data associated with supplier diversity can be accessed by the necessary departments so that the information can be incorporated into the planning across the organisation. 

7. Use the information

In order to be successful, it is important to align the strategy with the wider organisation. Programmes frequently fail due to lack of traction, executive buy-in, or being under-resourced. 

8. Integrate the supplier diversity data into sourcing and procurement

“Failure to integrate supplier diversity into sourcing and procurement will mean it remains in the realm of theory and good intentions rather than concrete reality,” explained SpendHQ.

Common challenges faced by those in the function include the many data issues mentioned above, as well as disconnects in the process. Organisations will need to overcome such obstacles in order to be successful. Prescriptive analytics can help to identify risk and optimise supplier diversity strategies across multiple dimensions.

9. Forward planning

Supplier diversity programmes can quickly become redundant after a short period of time if it lacks long-term goals and objectives, or has objectives that are over-ambitious. It is important to find a balance when integrating a supplier diversity programme. 

10. Supplier diversity is a moving target

It is important to remember that supplier diversity is a constantly moving target, one that needs to be regularly assessed. “Without this, your program will get stale and wither over time,” stated Spend HQ.


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