The value of supplier diversity

This Friday, the National Gay & Lesbian Chamber of Commerce will host its annual banquet dinner and award Cendant with its Corporation of the Year Award (IBM won in 2004). Winning this award or any award for supplier diversity is significant for a number of reasons.

The value of expanding diversity among a supply chain should be strategic business decision for any business. In IBM's case, diversity dates back to 1900, so it is no wonder that one hundred years later in 2000, IBM was the first IT company to spend $1 billion with diverse owned businesses. But would you believe only 12 U.S. public corporations spend a billion dollars or more with diverse owned businesses? The 12 are called the Billion Dollar Roundtable and also include Altria, AT&T, DaimlerChrysler, Ford, General Motors, Johnson Controls, Lockheed Martin, Lucent, SBC Communications, Verizon and Wal-Mart. And they get it.

Similar to IBM, their commitment to greater diversity is driven by the recognition that the skills and insights needed to meet client needs are as a diverse as the human population. To succeed, corporations should recruit skills not only through employment practices but also through the diversification of the supply chain. IBM currently works with more than 300 businesses that are considered diverse including, women, GLBT, African-American, Latino, Native American and people with disabilities.

It's also good business sense. Small and medium sized businesses, specifically minority owned are growing more than 5 times greater than other groups. This represents a huge market opportunity for IBM to sell hardware, software and services.