More and more companies are tracking their diverse vendor population and reporting on purchase percentages and total spend with these diverse vendors. Many companies have redoubled their efforts or started new initiatives to ensure their organizations have diversity within their vendor populations. Many large corporations now have a Chief Diversity Officer or similar position, elevating the importance of diversity not only amongst their human resource population but also for vendors and contractors, as well as at the C-suite level. For organizations that have a goal to track diversity, whether it be for the company or for outside stakeholders, there are several things to keep in mind.
What is Vendor Diversity
First, we must define what we mean by diversity or diverse vendors. Diverse vendors are a designation given to companies where the majority of their ownership qualifies as a diverse group. This can be based on factors such as race, ethnicity, gender, or even classes such as veterans or LGBTQ+, for example. Companies may let vendors identify themselves and “self-certify” their status.
This often exists in companies that want visibility into their vendor makeup but are not concerned about reporting or hitting targets for investors or government parties. Other companies interested in a more formal, certifiable process may require vendors to provide proof of certification. This requires them to provide a copy of the actual certificate from an authorized certifying agency. In these instances, there is a need to track the expiration of these certifications to ensure vendors stay in compliance and verify that the data companies report are accurate and up to date.
Tracking Diverse Vendors
Having identified a vendor’s diversity classification, companies can track the volume and types of spend with that organization. Then, they can use this information for contracting, community outreach, vendor recruiting, contract compliance, and more. The process of identifying, onboarding, tracking, and vetting certification compliance, and reporting spend patterns can be extremely labor-intensive and costly.
Vendor portals with robust onboarding and management capabilities help immensely with diversity tracking, certification, compliance, and reporting processes. ICG’s vendor onboarding solution has a highly configurable diversity module that facilitates the collection of information from diverse vendors. This allows buying companies to establish and maintain compliance through the collection of data.
By establishing a vendor self-service model, vendors have the capability and responsibility to provide all the data and documentation necessary to verify their diversity status and that they are staying in compliance. This means buying companies can easily establish and manage a diversity program via the vendor portal. The buying company can then identify vendors for sourcing/procurement activities, track diversity vendor information, and report on diversity spending. Vendor onboarding capabilities can add value to companies by promoting vendor self-service, decreasing costs, and improving vendor relations. Having AP automation with a strong reporting component can make tracking vendor spending information quick and easy.
Staying in Compliance
When tracking diversity status becomes important, so does staying in compliance. The initial verification of diversity is just the first step. After this, escalating notifications to both the buying company as well as the vendor can be sent out as the verification nears expiration. This is a great way to ensure that your vendors always stay in compliance.
Get Started
ICG offers solutions that are great for tracking vendor diversity and compliance. Since they are entirely customizable to your organization, these solutions are great for whatever vendors your organization works with. Contact ICG today for more information or for a demonstration of one of our comprehensive vendor onboarding solutions.