Making connections with Fortune 500 companies can be challenging, and sometimes even a bit mysterious.
Helping to demystify the process of corporate procurement, the BIZ Procurement Series periodically talks with corporate supplier diversity representatives who participate on the NGLCC's Procurement Council, and taps into their insights on developing a business relationship with corporate America.
In the latest installment of the Procurement Series, Tim Ruddell, manager of sustainable and firm-wide procurement for KPMG, explains what KPMG looks for in a supplier, why being an certified LGBTBE matters in the procurement process, and why sending a sloppy e-mail could ruin your chances of landing a contract with his company.
BIZ: What is KPMG's philosophy about supplier diversity and why does it have such a strong program?
TR: KPMG recognizes the value of diversity, and the benefits that diverse businesses can bring as suppliers and sub-contractors to the firm, our clients and our communities. This "triple bottom line" means that our supplier diversity program has strong and wide-ranging support within KPMG. This is vitally important to the future success of the program, given our structure as a partnership.
BIZ: What is KPMG looking for in its first-tier and second-tier vendors/suppliers?
TR: KPMG's firm-wide procurement team has to balance a number of factors, including managing risk for the firm, the quality of goods/services and, of course, cost-seeking the best overall value, which may be defined differently for each project we undertake. Many of our most successful suppliers are collaborative in their approach and look to contribute to our success in many ways. For a single supplier, this may mean presenting us with a cost-reduction or avoidance opportunity, an innovative new product or service, or a new approach to packaging or shipping to minimize our environmental impacts.
BIZ: What would you advise a business that has just become certified as it considers approaching a Fortune 500 company?
TR: Know your potential client's business, and be prepared to build your relationship from the ground up. Be sure to mention your certification, but do not focus on it too much in your value proposition. Do not be disheartened if doors do not open to you immediately. Many organizations work on three- or five-year agreements, or even longer for certain categories, and we may only perform a few major RFPs each year. The barriers to entry as a new supplier may vary based on many factors-the procurement cycle for the category, incumbent relationships, cost (financial and otherwise) of transition to a new supplier, your existing relationships and reputation, and even the procurement team's influence in the purchasing decision, as we expand our reach through our many locations and departments.
BIZ: What is the best point of entry for certified businesses? Should they reach out to you first or to the department responsible for contracting?
TR: For KPMG, contacting us-supplierdiversity@kpmg.com with a general description of your goods/services is the best first approach. If you already know who your target is within KPMG, or if you have existing or previous relationships, please let us know. We are contacted by hundreds of suppliers every week, so we cannot guarantee an individual response. However, we maintain records of all such supplier inquiries so that when appropriate opportunities arise, we can reach out to you.
BIZ: Are there pitfalls that new businesses need to avoid?
TR: Persistence is a virtue in sales, but patience equally so. If we aren't currently in a position to work with new suppliers in your category, sending us daily e-mails insisting that you give your 30-minute presentation to our chairman may not be warmly received. We genuinely cannot respond individually to every solicitation of business we receive-the number of salespeople working at NGLCC-certified businesses greatly outnumbers our procurement team, so please do not be offended if we decline your offer of a detailed presentation.
Personally, my biggest turn-offs in new business solicitations:
1. A sloppy e-mail which is obviously cut-and-pasted, and sent to all your prospects. I've received several solicitations where the salesperson forgot to remove the name of one of our competitors or another corporation from their e-mail before cutting and pasting, which is obviously embarrassing for all parties. We may not be a household name, but receiving messages addressed to "KMPG" also makes me cringe.
2. Claiming strong existing relationships that do not exist. While honesty is obviously encouraged and knowing our business is very important, you may place yourself out of the running by telling us who you know within KPMG if they give you a less-than-glowing review or have never heard of you.
3. Pointless persistence. If we do not buy what you are selling, please remove us from your list and move on. For example, we don't have a fleet of cars, and we don't need brokerage services.
BIZ: Do small businesses really have a chance to work with KPMG?
TR: Absolutely. Last year, we spent more than $53 million with more than 800 small businesses in the United States. The top three SIC industry codes for small businesses at KPMG are 7371 (Computer Programming Services), 8742 (Management Consulting Services) and 7373 (Computer Integrated Systems Design). These are the big-ticket items, but to give an idea of the variety of small businesses we work with, our bottom three SIC codes are 3269 (Pottery Products), 5031 (Lumber, Plywood, Millwork, and Wood Panels) and 3432 (Plumbing Fixture Fittings and Trim).
BIZ: Does NGLCC certification really matter, especially if business owners feel that they already provide a great product or service?
TR: Yes. NGLCC certification does several things. It provides direct or improved access to procurement. Our us-supplierdiversity@kpmg.com e-mail address is intended only for certified diverse-owned businesses. We have no such unique point of contact for general sales inquiries from other potential suppliers.
It also strengthens the LGBT business community by adding your voice as an "out" entrepreneur. As the number of certified businesses increases, so does the impetus for Corporate America to include LGBT-owned businesses in their supplier diversity programs. We realize it's a chicken/egg scenario, and so we enjoy seeing healthy growth in both the certified supply-base, and the number of our peers who commit to include certified LGBT-owned businesses in their supplier diversity programs. One won't happen without the other.
