Diverse Spend: Industry Best Practices

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    • #292465

      1. Does your company remove certain spend from your baseline to determine their overall supplier diversity spend percentage. For example, are certain categories (telecom) or certain suppliers (IBM) excluded from the baseline of spend to calculate diverse supplier spend percentage?

      2. Does your company follow any industry (tech/logistics/finance , etc.) standards to report Tier-2 diverse spend to your customers for benchmarking purposes? For example, which department handles the Customer Reporting broken down by industry, how often this reporting happens and any other data you think will be relevant.


    • #294991

      Examples of exclusions from addressable spend:   

         * employee expenses
         * taxes
         * OEM costs
         * government entities

       The Small Business / Supplier Diversity Program resides in Supply Chain, with quarterly reporting along with a year-end program review;   We follow government guidelines/regulations for the reporting of Tier 1 and Tier 2 spend.   

    • #294993

      WWe take a look at our total spend and then carve out areas where there would not likely be a diverse supplier available–e.g. payroll services, banking, benefits, certain large IT/sensitive areas. We then create what we call the “sourceable”  spend. We focus on this area for diverse supplier opportunity.  Because there are frequently revenue caps on what can be considered a diverse suppliers, this helps us keep us focused on the realistic opportunity.  From there, we then create a plan by category, sourceable spend and timeline of activity.


    • #294995

      1. No, we don’t remove any spend from baseline to determine overall supplier diversity spend percentage.

      2. We report Tier-2 spend to our customers on CY quarterly basis. Supplier Relationship Management (SRM) team within S&P Org handles the Customer Reporting.

    • #294996

      1. We utilize our addressable spend to analyze our diverse spend data.  We are now looking at this expect example, of are their categories that are not relevant and we should exclude them, such as Rent, Taxes, etc.  

      2. We are not reporting on Tier 2 as of yet.

    • #294997

      1. Yes, we follow the Financial Services Roundtable for Supplier Diversity (FSRSD) best practices when it comes to exclusions.  We calculate our diversity spend percentage based on “eligible spend”. 

      2. We do not provide Tier 2 reporting to many customers and this is handled on a case by case basis.  If you are providing this widely to many customers then industry standards should absolutely be followed.  Your customer needs to understand your Program requirements and make sure they know the details of what you’re reporting. 

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