In 1990, NationsBank started a supplier diversity initiative which has become mainstream, embedded in the procurement processes of what is now Bank of America (Charlotte, NC). The goal was to spend at least 15 percent with diverse suppliers, which company leaders considered "reasonable yet impactful," says Joseph D. Hill, director of supplier diversity for Bank of America. "We have always been leaders in the industry, and setting an ambitious goal was consistent with our culture," Hill declares.
NMSDC and WBENC
The bank had a good relationship with the National Minority Supplier Development Council (NMSDC) from the start. When the Women's Business Enterprise National Council (WBENC) came on the scene a few years later, "We were in from the beginning," Hill says.
Hill has been on the WBENC board for three years, since he took over the supplier diversity function at the bank. Before that he was a client manager in Bank of America's commercial unit, involved with middle-market and small business customers.
"When I took the job, I asked myself how we could effectively spend more dollars with diverse businesses," Hill explains. Helping MBEs and WBEs develop is fundamental to the bank's supplier diversity program, he believes.
"We want to develop businesses that can provide us with products and services we need. We also need to be able to count on our supply chain to provide the most qualified suppliers."
The development activity involves "collaborating on a strategy to help small businesses strengthen their weaknesses and emphasize their strengths so they're able to take advantage of opportunities at our bank and other companies."
Hill's team includes supplier development managers based in Los Angeles, CA; Atlanta, GA; Chicago, IL and Pittsburgh, PA. They work with MBEs and WBEs in their regions to help them create useful development plans and to become more competitive in the procurement process.
This helps MBEs and WBEs build a strong relationship with Bank of America and also connect with other large companies and each other, Hill explains. "If we can help our suppliers become more confident and efficient in how they deliver their products and services to us, that can open the door to success for both us and them."
The value proposition
Mainstreaming the supplier diversity program has always been an important personal goal for Hill. "There is no way we would be willing to pay more or accept lesser quality!" he emphasizes.
"My group has to make sure our Bank of America sourcing managers understand that, and see that using a diverse supplier can mean both better price and better quality. If we do it that way everybody wins."
Bringing back the supplier forum
Next year Bank of America plans to resume its suspended networking events by hosting a supplier forum. It will definitely be a mainstream event. Both the company's key suppliers and diverse suppliers will be included; a total of 1,600 suppliers, supplier managers and other invitees will meet in Charlotte.
"We'll talk about things that apply to all of them and have breakout sessions on specific industry and commodity needs and concerns," Hill says. "We'll have sessions that put diverse suppliers together with prime suppliers.
"The heads of NMSDC and WBENC will be there and they'll speak. And everybody will understand that Bank of America's expectations of a diverse supplier are no different than they are of a non-diverse supplier."
The Brothers scholarship
Dorothy B. Brothers was a pioneer in supplier diversity at Bank of America. When she died three years ago, Bank of America wanted to honor her commitment to supplier diversity. Last year the Dorothy B. Brothers Executive Scholarship Fund was started in her name.
Each year the fund gives twenty-five diverse business owners a chance to attend executive education programs. They go to the Tuck School of Business at Dartmouth and or other business schools that have minority- and women-owned business programs.
These M/WBEs do not need to have any connection with Bank of America, Hill stresses. The scholarships are publicized nationally and any diverse supplier is welcome to apply.
Hill also notes that the bank is working to increase the applicant pool. Diverse suppliers can check out www.bankofamerica.com/suppliers to find out more about the scholarship and other programs.
WBE Alliance Technology Group
Hope Hayes, a founder and managing member of Alliance Technology Group, LLC (Hanover, MD), notes that the company was established in 1987 as a systems integrator. "Back then our business suite consisted of PCs, printers and procurement," she says with a smile. "We also provided PC and printer maintenance contracts, and we were a document imaging company with our own proprietary software."
Xerox Business Services, she recalls, used Alliance software as its lead document imaging product. "When they were becoming 'Xerox the document company' we helped them out in that."
Patrick Edwards, VP of sales and marketing for Alliance, says, "We got into the data storage game in the early 1990s. We became a tape backup provider, reselling tape libraries. We kept our PC and printer break/fix business line and we still grow that business today, but we became more of a storage integrator."
Four years ago Alliance changed its business even further, Edwards says. "Under the umbrella of a professional services organization we offer storage services; support services like computer and printer repair, loaners and helpdesk; and on-site services providing network engineers and system admins." In all, Alliance has about forty full-time people, many of them techies, plus "contractors we can bring in for specialties."
Hayes originally started the company with a couple of male partners. About the time the company got into data storage she bought out her partners and Alliance became a WBE.
Storage was Hayes' specialty. "She taught us how to go after business, how to do all the right things and provide a value to both the manufacturers and the customers," Edwards says. "We've won some diversity and WBE awards and they help get us in the door."
Alliance was certified as a WBE by the Maryland Department of Transportation (MDOT) in 1991. It got its 8(a) certification two years ago and its WBENC certification last year.
Connecting with Bank of America
Alliance, Edwards explains, has a line card of "best of breed type products" that it understands well and its people are trained and certified in. StorageTek, one of the manufacturers on the card, tipped Alliance off that stronger representation was needed at Bank of America. As Edwards remembers it, "They asked the bank if they could engage us, and so we got involved with them via StorageTek.
"We started the accreditation process two years ago. They wanted to know who we were, and whether if they did too much business with us, we would collapse under the weight. We passed the process and now we're doing business as an accredited partner with Bank of America."
Supplier development work
Accreditation included working with Brian Powers, Joe Hill's supplier development manager in Chicago. "He's wonderful, says Edwards. "He was not only concerned about whether we could handle the business, but he helped us figure out how we could create value for the bank. We created internal processes that let us focus on the enterprise-level solutions Bank of America is looking for."
As a result of the work done with Powers, Alliance has learned how to streamline its ops with other customers. For example, Edwards notes, "We've created a site survey that simplifies deliveries to any customer location. We had to really look at that for Bank of America and we carried it over to the rest of our clients."
Alliance is also discussing online procurement of standard equipment for the bank, "simplifying their purchase order and order entry process." This "Web store" idea came out of discussions with Powers and the bank's supply chain management. "Whether it takes root only time will tell, but again it's the idea of adding value, and could be applied with other customers," Edwards says.
Adding more value
Since Alliance mainly supplies StorageTek materials, its relationship with Bank of America is as a second-tier supplier. But Hayes notes that "Because of the depth of involvement that brought us in, we have direct communication with Bank of America project managers and others. It eliminates the need for the bank to constantly communicate with the manufacturer, so it's a value to the bank and a value to StorageTek, and of course it's good for us.
"Our relationship with Bank of America has helped us understand our own business better, grow and bring more people on board," Hayes concludes.