IBM: supplier diversity leadership going strong, going global
Its SD program started forty-four years ago. IBM is a founding member of groups like NMSDC and WBENC,
and a Billion Dollar Roundtable member
IBM (Armonk, NY) has a long tradition of encouraging diversity in all aspects of its business. The supplier diversity program began in 1968 when a manager was put in charge of promoting local and minority businesses as suppliers. The company began securing booths at trade fairs and bringing suppliers into IBM for business management training.
"The greatest challenge we faced was getting people to understand that supplier diversity was a strategic part of IBM's overall business plan, that it was not just a social program, but a win-win situation. Many of these local businesses were also IBM customers," says Michael K. Robinson, IBM program director of global supplier diversity for the company's integrated supply chain.
Over $3 billion in diverse spend
IBM's supplier diversity program has enjoyed tremendous growth, putting it in the company of others at the Billion Dollar Roundtable. In 1990, IBM's spend with diverse suppliers was $370,000. "Today we have surpassed $3 billion worldwide in our first and second-tier spend combined," says Robinson. The program is headed by a global program director with a dedicated staff of eight program managers in the U.S. and an additional two in non-U.S. locations. In 2011, IBM spent 11.9 percent of its tier 1 procurement dollars in the U.S. with diverse suppliers.
Robinson says the current focus is on the globalization of the program and worldwide supplier development through commercial and federal mentoring programs, outreach, education and skill development. IBM sponsors and participates in events and works with organizations like the National Minority Supplier Development Council (NMSDC), the Women's Business Enterprise National Council (WBENC), WEConnect International, the National Gay and Lesbian Chamber of Commerce (NGLCC), and the United States Business Leaders Network (USBLN). IBM is a founding member of each of those organizations.
Recently, IBM announced it would be leading Supplier Connection, a new initiative in which Fortune 500 companies have committed to buy more goods and services from U.S.-based small business enterprises (SBEs) in an effort to spur the U.S. economy and job growth. "Today, Supplier Connection has seventeen member companies, and hosts a portal where small businesses register their companies, core capabilities and certifications. Member companies then help registered small businesses connect into their supply chains. The Supplier Connection portal is open to U.S. small businesses, including independent contractors, with less than $50 million in revenue or fewer than 500 employees," says Robinson.
IBM has two formal mentoring programs, one for its commercial suppliers and the other for federal suppliers. The company accepts certifications from a number of organizations, including NMSDC, WBENC, NGLCC, Central Contractor Registration (CCR)-8a, Small Disadvantaged Business (SDB), woman-owned SDB, HUBZone, state, local and federal government agencies, and the United States Business Leaders Network.
To ensure that diverse businesses receive maximum opportunities, IBM requires that at least one diverse supplier be included in all requests for proposal (RFPs), whether the work is done in the U.S. or elsewhere. And IBM's tier 1 suppliers are expected to provide opportunities to diverse suppliers as part of their contractual obligations to IBM. "Building and maintaining a community of diverse suppliers increases IBM's opportunities to hear new ideas, apply different approaches, and access additional solutions that respond to customer needs. In addition, diverse and small businesses are flexible, responsive and innovative," Robinson says.
PCCi: former IBMer understood a need
Pierson Computing Connection (PCCi) (Mechanicsburg, PA) specializes in technology infrastructure installations, including setup and installation of wired and wireless networks, PCs, servers, printers, interactive whiteboards, projectors and other computer equipment. It serves clients up and down the East Coast. PCCi president Deb Pierson founded the company in 1993.
"I was working for IBM in the early 1990s. At first I worked as a project manager for the Commonwealth of PA, and we were having trouble identifying woman or minority-owned businesses that performed high-quality equipment installations. When IBM offered me a buyout that included one year of benefits, I decided to leave and start a small business. My parents had started a construction business, so I was familiar with the process," Pierson says.
For the first five years, Pierson was the company's only employee, specializing in project management. She subcontracted installation services, and personally ensured that all installations met standards. Her first customer was IBM.
"As a former IBM employee, I had relationships with the state and local government team that supported Pennsylvania. Because my business grew out of a recognized need for a high-quality installation services partner, my former IBM colleagues almost immediately saw the benefit to their customers and began using our services. As our business grew, we increasingly accommodated IBM's specific needs in the government sector," Pierson says.
Ultimately, Pierson was able to begin hiring staff and PCCi began to perform all aspects of its technology integration work in-house.
Mentoring pays off
Today, PCCi has forty employees. Recently the company was chosen by IBM to be part its mentor-protégé program. "We've been able to send key team members to Tuck School of Business training sessions at Dartmouth. This training provided a basis for these team members to communicate, and allowed us to examine many aspects of our business and set goals for our team," Pierson says.
In addition, IBM has provided an executive who mentors PCCi as the company works toward its goals. "As a result of the mentoring, we have completed a new strategic plan, revised our marketing materials, re-organized our personnel and developed initiatives to add new technology service offerings, all in just over eight months!" Pierson says with enthusiasm.
The value of certification
PCCi has been certified as a woman-owned business for many years, first with the Commonwealth of Pennsylvania, and then with WBENC. In addition, the company is certified with agencies in eight other states.
"Our certification has opened the door with customers and prime contractors," Pierson says. "Once the customer does business with us on a project where certification is required, they almost always come back for additional project work, even for projects where certification is not necessary."