Strengthen your supply chain with an MBE and purpose-driven outsourcing Underpinning every meaningful corporate diversity program is a belief that a business needs a purpose beyond profits and that leaning into that purpose will enable it to attract and motivate employees, suppliers, investors, and customers.
Former Best Buy CEO Hubert Joly defined a company’s purpose as “the ultimate goal of the business, the essential reason why it exists, and how it contributes to the common good.” He suggested that focusing on underlying human needs — rather than on the products and services offered to address them — is critical, as business is fundamentally about human relationships. Joly argued that every business is part of an ecosystem, which means it must look to actively give back to others in the community.
Suppliers, particularly diverse ones, are often an underutilized part of a company’s ecosystem. A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. They include minority-owned enterprises (MBEs), woman-owned enterprises (WBEs), disability-owned business enterprises (DOBE), and many more. McKinsey estimates that 10,000 certified, diverse businesses are ready to compete on merit and drive economic impact.
Supplier diversity yields both intangible and tangible dividends Equal opportunity is, for many, still beyond reach. Many corporations have pledged to address inequity and inequality but have yet to execute with the desired impact, in America or beyond. A Hackett Group survey suggests that worldwide, only 38% of top-performing companies have supplier diversity programs in place today.
In an increasingly global economy, supplier diversity can help companies deliver on the promise of working for a higher purpose. Choosing an MBE can invigorate a struggling community. An MBE partnership can also demonstrate commitment to corporate social responsibility (CSR) – creating shared value quickly.
Numerous analysts and executives cite the benefits of embracing inclusive procurement and leading with a purpose. These benefits include:
Generating sustainable local wealth and economic opportunity for the disadvantaged
Maintaining high moral and ethical standards
Increasing competition to drive down costs
Increasing resilience and agility in the supply chain in uncertain times
Enhancing brand image through CSR commitment
Reaching wider markets and customer communities
Improving service and product quality with feedback from diverse groups
Attracting staff with a true interest in the company
Demonstrating community and business leadership
By reaching beyond the corporate walls to build stronger connections within the community, diverse suppliers drive meaningful results. The tangible benefits of partnering with an MBE can be quantified on several dimensions , including:
Better ROI and higher profits: From a financial perspective, a Supplier Diversity Study by the Hackett Group found that companies that dedicate 20% or more of their spend to diverse suppliers can attribute as much as 15% of their annual sales to supplier diversity programs.Lower operating costs: A report by Coupa Software indicated that companies in the top quartile of spending on diverse suppliers save an additional 0.7 percentage points in total procurement expenditures.Increased innovation: Harvard Business Review reported that cultural diversity is a boon to innovation, and businesses run by culturally diverse leadership teams were more likely to develop new products than those with homogeneous leadership.
Supplier diversity has a multiplier effect Doing business with diverse suppliers not only positively impacts procurement spend — it stimulates the downstream economy. Diverse suppliers create a sustainable supply chain by positively impacting their local economies, creating jobs, and generating revenue and taxes.
On the new frontier of diversity, particularly in the business process outsourcing realm, is impact sourcing. Everest Group describes impact sourcing as “socially responsible business process outsourcing” that drives inclusivity and prioritizes talent within communities with high potential but limited employment prospects.
Impact sourcing is often associated with developing countries, but it’s a concept that applies in America, too. U.S. citizens and localities surely benefit when employers have proactive programs to provide opportunities to those fleeing abusive relationships, young mothers looking for part-time flexibility, jobseekers in the Rust Belt, or military veterans and BIPOC or LGBTQ youth starting new careers.
As a certified MBE in the outsourcing sector, VXI understands the importance of creating shared value through purpose-driven outsourcing. In the U.S., for example, VXI has transformed abandoned retail stores into state-of-the-art call centers. Specifically in Morrow, GA, VXI employs 1,500 people in a former J.C. Penny store, helping to hone tech, communication, and managerial skills. With just one example, VXI has created an opportunity cycle generating over $150 Million in economic impact!
Through a profits-through-purpose strategy, VXI enables its partners to quantify impact through job creation, employee development programs, capital investments in the community, and relationships with other MBEs and local businesses that benefit through the multiplier effect.
With the recent acquisition of Chime Solutions and the arrival of Mark Wilson, the organization’s Chief Impact Officer, VXI is helping leading brands fast-track their supplier diversity programs and generate outcomes far beyond profit.
Read further about VXI’s DEI and supplier diversity programs , or contact us to learn how purpose-driven outsourcing can benefit your organization and its CX objectives.
