Why Indigenous Suppliers Should Know the Business Case for Supplier Diversity

Supply Nation Member organisations need a solid business case for the successful implementation of the supplier diversity (SD) initiative.  For an Indigenous supplier, understanding and knowing their customers’ business case for supplier diversity provides an opportunity to uniquely position their business to their customer’s strategic targets.  This article explains what a business case for supplier diversity is and why Indigenous suppliers who wish to do business with Supply Nation Members need to know it.

What is a business case for supplier diversity?

A business case is the reason why a company would implement a supplier diversity program. It’s important for member companies to fully understand and articulate the need, purpose and potential outcomes of a SD program. Business cases help build support both internally and externally and demonstrate the company’s commitment to supplier diversity.

Key elements of the business case include value proposition, current state, future plan, and outcomes to be achieved. With that being noted, for the successful creation and implementation, it is essential the business case for SD be aligned with the overall company goals and culture.

For the business case to be successful it will need the support of senior executives. This support includes the Board, CEO, Executive Champions, and Heads of Procurement. Once a business case is created, it should be communicated from the top (CEO) down, highlighting the company’s overall commitment to SD and the reasons why they are supporting SD.

Knowing the reasons for the supplier diversity business case

Indigenous businesses should understand that the business case for supplier diversity is the driver of the SD initiatives in member organisations. It is Supply Nation Members argument that highlights and advocates their company’s course of action intended to achieve their SD goals. It also “justifies the investment of time, money and resources needed” (Prince 2, 2013) to embed SD into their supply chains. Indigenous businesses must understand why our members have an SD business case; a few reasons include:

It sets out their vision: the business case provides a clear purpose statement of SD in the company. 

It gives a clear approach to implementation:  the SD business case provides a clear outline of the company’s strategic objectives and actions listing how supplier diversity will help their organisation achieve its strategic vision.
It sets out realistic opportunities for SD: the company will evaluate their existing supply chain and identify realistic opportunities for Indigenous businesses in the procurement process.

It enhances Supply Nation Member’s brand: The articulation and promotion of member organisation’s business case for SD. It communicates to all stakeholders that your organisation is committed to the SD initiative.

Why should I, as a Certified Indigenous Supplier, know the business case?

There are a number of reasons why Indigenous businesses should be prepared when approaching Supply Nation Members. These include:

It will help you understand the market

Indigenous businesses should have an understanding of the market context in which they operate. This will impact their performance in the market as it requires them to understand aspects such as the products and services they provide, competition, industry trends and customers. A greater understanding of the market will lead to successful business and profitable changes.

Understand the needs and wants of buying organisations

Indigenous businesses who understand the needs and wants of buying organisations are more likely to succeed in winning business compared to another who does not understand. Identifying the customer’s needs and wants will assist in understanding the buying behaviours of organisations. It will also better position you to reach your transactional targets.

Getting to know your buyer

Like the previous benefit, knowing your buyer will increase your business opportunities and chances of winning contracts. This might entail an understanding of who they are (primary contact involved with Supply Nation), why, when and how they buy, and more importantly, what they expect from their suppliers. If you know your buyer, you will have a better chance of being able to sell your products and services to them.

Support your pitch

Advertising and promotion of a Member organisation’s supplier diversity business case is a useful tool that Indigenous suppliers can take advantage of.. The business case can be beneficial for Indigenous suppliers when pitching their goods and services, for example in response to a request for tender (RFT). It’s important to do your research and observe what your potential buyer is seeking.

Move from transactional to being embedded in the supply chain

By having a SD business case, Supply Nation Members have outlined their current state, future plans and outcomes (goals). If their company is truly committed to SD, they will plan and implement strategies to achieve their stated objectives. As a result, they hope to embed Indigenous suppliers into their supply chain. A lasting partnership may be defined as one where the Member wishes to procure from the supplier on a regular basis. What this means is a deeper business relationship and continued business growth for both buyer and supplier.

A business case demonstrates why Supply Nation Members are committed to the supplier diversity initiative. It outlines their purpose and potential outcomes and more importantly it communicates their commitment. Indigenous businesses must do their research and be prepared when approaching Supply Nation Members – this includes understanding our Members’ SD business case. By understanding the SD business case, Indigenous businesses gain a better understanding of the market they operate in and they get to know the needs and wants of buyers. More importantly, having this knowledge can assist Indigenous businesses in differentiating themselves from competitors when pitching.