Finance finds strong diversity programs
a help in tough times
a lot of
By Christine Willard Heinrichs
Tough times tighten everyone’s belt, but companies in the financial industry have found that good supplier diversity programs continue to open the door to business. Strengthening the diversity program with M/W/DBEs and other diverse suppliers can be a definite advantage in the community, national and even the global marketplace.
MetLife looks for bright ideas
“We are always looking for innovative, creative suppliers,” says Roy Anderson, VP of global procurement for Metropolitan Life Insurance Co (MetLife, New York, NY). “Part of our task here is educating our internal customers about the value that diverse suppliers bring
to our work environment: the new ideas for projects
MetLife senior supplier diversity specialist Sue Darago actively searches for ways to connect with diverse suppliers. She participates in conventions, trade fairs and other events nationally and in the New York metro area, and she networks through the Financial Services Industry Roundtable, an industry subcommittee of the National Minority Supplier Development Council (NMSDC, www.nmsdc.org). “There are a lot of opportunities to get MetLife on the scene,” she says.
This past May, Darago partnered with the Women Presidents’ Educational Organization (WPEO), the regional partner of the Women’s Business Enterprise National Conference (WBENC, www.wbenc.org) in the New York metro area, to host a workshop for seventy-five newly certified women business owners. Events like these build the personal relationships that lead to business success.
“Building the relationship is the first step, planting the seeds for a long-term association,”
Big and complex
MetLife is the nation’s largest individual life insurer, measured by life insurance in force at the end of 2007. The company also offers annuities, automobile and homeowners’ insurance and retail banking services as well as group insurance and retirement and savings products and services to corporations and other institutions.
In addition to financial services suppliers, MetLife needs suppliers for every corporate requirement, from servers, PCs and software to professional services, consulting support, real estate and even office furniture.
“It’s vital for us to be there not only in dollars, but with a mentorship environment to help suppliers get to the next level,” says Anderson. Darago’s work, he notes, “is valuable because it creates an environment in which diverse suppliers can grow their businesses.”
National City goes with
Vertex Computer Services
“National City has recognized that our local business economy is tied to growth of small, local businesses,” says Carolyn Lee, VP of supplier diversity and development at National City Corp (Cleveland, OH). “We are committed to growing them by creating access to opportunity.”
Vertex Computer Services (Twinsburg, OH) is one of the locals that has been part of National City’s effort. Its two offices in Ohio employ about eighty-five people, and some 150 work at its development center in India. Sharda Iyer, president, and her husband Ganesh Iyer, CEO, own and run the company. It holds technical certifications at Level 3 of the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model Integration (CMMI), ISO 9001:2000 and ISO 27001:2005, as well as minority business certifications.
The company started in product development in 1989. It changed course in 2001, applying its expertise in software systems analysis and design to IT solutions.
Today, work in the financial services industry makes up more than 50 percent of Vertex’s business. Other major clients are in retail and energy.
Focus on what’s important
“We focus on things that are important to our customers in tough economic times,” says Ganesh Iyer. “We want to help them maintain their competitive positions.”
To do that, the company found ways to apply its expertise with larger banks and Fortune 2000 companies to smaller community and regional banks. Regardless of the banks’ size, information protection and data warehousing tools help position their products and services for marketing to their customers.
Scoring the touchdown
Three years ago, National City’s supplier diversity program positioned Vertex to participate in a competitive bidding process, and the company became a preferred vendor. Former athlete Robert King, business development manager for Vertex, puts it in football terms: “They threw a few crucial blocks that let us get on the field and compete,” he says. “Once we got into the red zone, it was up to us to score the touchdown, by understanding the financial industry and meeting National City’s needs.”
The bank invites prospective suppliers in all fields to register at its portal, notes VP Lee. “Construction services, contract labor, telecom, legal; any commodity that we source externally is open to diverse suppliers,” she says.
VisionIT: access to Allstate
Ten years ago an article in Diversity/
Careers profiled David Segura’s new Vision Information Technologies (Detroit, MI) as an MBE on the rise. Segura launched his fledgling business in 1997, and a year later he was projecting $1 million in revenues. His business provided IT personnel to its clients, developing a pool of talented professionals with varied skills and connecting them with jobs.
By 2007 VisionIT had shortened its name and earned more than $107 million for the year. This is a tribute not only to Segura’s technical and business acumen, but to the effectiveness of supplier diversity programs.
“All you really ask for is access, good insight and visibility,” he says. “I need the people who make supplier decisions to be aware of VisionIT and the services we provide. Margaret Klinsport really understands what we need, and gave us the opportunity to be heard.”
Klinsport is supplier diversity manager for Allstate Corp (Northbrook, IL). She takes supplier diversity beyond corporate walls.
for minority suppliers
In February 2008, for example, Klinsport tapped fellow members of the Financial Services Roundtable subcommittee of NMSDC. She invited competing insurance companies to Allstate’s first supplier diversity exchange.
The event brought seventy-five suppliers together with key purchasers at Allstate, and execs and managers from Nationwide Investment Services Corp (Columbus, OH), AAA Michigan (Dearborn, MI) and Caremark (Woonsocket, RI). Rainbow PUSH Coalition founder Jesse Jackson addressed the event, and Allstate CEO
and president Tom Wilson also spoke. “The key to the day was that I had top-down support,” says Klinsport.
After the speeches, each prospective supplier was assigned a table, trade-fair style. Allstate reps and others could meet them and learn what they had to offer. After lunch the suppliers met individually with prospective purchasers in one-on-one discussions. Every participating supplier met with at least one purchaser.
“So far we have six new contracts and are working on more,” Klinsport says.
“Allstate’s mini-conference for minority suppliers allowed us to take another step forward,” Segura adds.
Of course supplier diversity at Allstate involves more than major events like the exchange. The company also offers mentors to suppliers. One of the prospective suppliers, for example, is a collection agency that has not done the kinds of collections Allstate requires. Allstate has offered to train the business’s employees to become competent in that area.
“It’s a way to expand and support the diverse business community,” Klinsport notes.
For MBE Segura, understanding the needs of his client companies is crucial.
Segura grew up in the Detroit, MI area where his parents settled when they immigrated from Mexico. He began VisionIT in the automotive industry, finding IT personnel for Web development, network development, ERP and other IT solutions for the Fortune 500 automakers.
As the company grew, Segura competed for the business of major corporations in other industries. His company now serves healthcare, energy and other financial services companies as well as the insurance industry.
Networking within the minority community helps attract gifted IT people. Segura makes it a point to attend national meetings of the National Society of Hispanic MBAs, BDPA, SHPE and other minority organizations as well as meetings of their local chapters.
Segura is selective as to the companies VisionIT accepts as clients. He tries to work only with companies that actively support diversity. “We want to build a great environment and have confidence that we are providing our team members the best possible opportunities,” he says.
When Klinsport finds herself confronted by unusual requests for IT personnel at Allstate, she calls on diverse suppliers to meet the demands. “We have to stay ahead of the next technology need,” she says. “We search among minority- and women-owned businesses, where not a lot of people look.”
Freddie Mac works with
Trilogy Technical Services
Freddie Mac, the mortgage finance company (McLean, VA), works with Rhoda Arzt and her Trilogy Technical Services to help fill its IT positions. Freddie Mac’s legal requirement to engage M/WBEs was re-emphasized by Section 1116 of the recent 2008 Housing and Economic Recovery Act.
“The program has always been in place,” says Bunni Wheeler-Young, manager for supplier diversity. “The Housing and Recovery Act of 2008 puts extra emphasis on our efforts. We’ve stepped up our game in terms of how we focus our outreach to the community.”
Freddie Mac seeks out diverse vendors to help fulfill its mission as well as its business
and service goals. “We don’t necessarily wait for the opportunities to reach us,” says
Freddie Mac’s mission is to provide liquidity, stability and affordability to the U.S. housing market; it serves diverse communities across the nation. “Our supplier diversity program
helps us connect with and serve people in the communities where we live,” says Wheeler-Young. “And it links us to companies with unique experiences and backgrounds that can help
Rhoda Arzt came to technical staffing from the business side, as she worked her way up to VP of corporate compliance at Maryland National Bank (Baltimore, MD). Producing detailed compliance projects for tax reporting, accurately and on time, introduced her to the technical side. She discovered she liked the kinds of jobs others found tedious. “Even if they thought it was a terrible, awful project, I would do it,” she recalls.
With that experience and the encouragement of her entrepreneurial father, Arzt started her own mortgage brokerage firm. By the early 2000s she felt she had gone as far as she could in that business and sold it. Then she met Alan and Fred Shulman, and joined them in opening a technical staffing company in the financial services industry.
“They knew how to recruit and I knew the products and challenges of financial services,”
Technical tax reporting
Arzt was eager to work with Freddie Mac, and the corporation’s supplier diversity program made it happen. With her background in technical tax reporting, Arzt understood what Freddie Mac needed.
Some clients, Arzt notes, need Sarbanes-Oxley expertise for financial restatement. Others need temporary employees in software installation and documentation. Some need staff with security clearance or U.S. citizenship. She can identify individuals with these and many other kinds of special expertise from her database of more than 40,000 contractors.
Beyond financial services staff, Freddie Mac needs folks with audiovisual technology know-how to support enterprise-wide meetings; its property development group and headquarters campus require support in a variety of business operations.
“If they come to us with a big book of regulatory issues we just wade through it,” Arzt says. “We do what we need to; we prove ourselves every day.”
TIAA-CREF invites all categories
TIAA-CREF (New York, NY) serves 3.4 million individuals in more than 15,000 academic, research, medical and cultural institutions. It has a total of more than $420 billion in assets.
The company developed a diversity sourcing objective to reflect the people who trust it with their retirement funds. “We like our sourcing to reflect the communities we serve,” declares Jean Mayer, VP of strategic procurement.
For 2008, the goal is $48 million in sourcing from diverse suppliers. “We typically include at least one diverse supplier in all major requests for quotations,” says Joan Watson, manager of the supplier diversity program.
IT suppliers must meet regulatory requirements for the security of personally identifiable information. Beyond IT, TIAA-CREF invites diverse businesses in all categories: contractors, consultants, facilities folks and others. “Requirements vary by category, and are the same for all our suppliers,” says Mayer.
Certification is essential
Third-party certification is a crucial element for diverse suppliers, since in most cases uncertified businesses will not be considered for diverse supplier goals. WBENC and the NMSDC are the independent groups whose certifications are recognized and accepted nationally. The Small Business Administration’s 8(a) business development program also evaluates businesses, and state governments, regional and local organizations may have their own certification programs.
“We recommend the more rigorous standards of NMSDC and WBENC, but we may accept certification through local and regional groups and others,” says National City’s Lee. For example, National City also works with the SBA, the Ohio Department of Development and the National Women Business Owners Corporation.
MetLife’s Darago participates in the certification committee of New York/New Jersey WPEO, the regional WBENC affiliate. The final requirement for certification is the committee’s site visit. “A lot can be said on paper, but a lot more can be understood in person,” she says.
Rhoda Arzt of Trilogy Technical Services gained confidence after receiving WBENC certification. Her company is also certified by the Maryland Department of Transportation as an MBE/DBE and by the state of Virginia as an SBE, WBE and MBE. “They put us through a rigorous process,” she says.
As diverse suppliers grow, many begin their own supplier diversity programs. With more than 1,500 IT personnel on its books, VisonIT has done that. “Diversity is a huge part of what VisionIT is all about,” says Segura. “We are very focused on reaching diverse talent, the best people in our industry with many different backgrounds and experiences. That’s one reason many corporations select us.”
FINANCIAL SERVICES COMPANIES WITH ACTIVE SUPPLIER DIVERSITY PROGRAMS
See websites for program details.
|Company and location
|Personal insurance including life, supplemental accident and health; annuities, banking and retirement products
|Government-sponsored enterprise providing financing for home mortgages and rental housing
|Merrill Lynch & Co, Inc
(New York, NY)
|Investment banking and advisory services, wealth
management, capital markets services
|Metropolitan Life Insurance Co
(MetLife, New York, NY)
Life insurance, annuities and retirement services
|National City Corp
|Commercial and retail banking, mortgage financing and servicing, consumer finance and asset management
|Robert Half International
|Professional staffing agency specializing in accounting,
finance and banking
(New York, NY)
|Retirement planning, financial products and services
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