Making a connection with Fortune 500 companies is challenging, and sometimes even a bit mysterious, and the BIZ Procurement Series is the National Gay & Lesbian Chamber of Commerce's® (NGLCC) latest effort to demystify this critical process.
In this periodic feature, we talk to the corporate supplier diversity representatives who participate on the NGLCC's Procurement Council, and tap into their insights about the process of developing a business relationship with corporate America.
In this edition of the Procurement Series, Annette Ficucello, NGLCC Procurement Council member and assistant vice president of supplier diversity at New York Life, discusses why the corporation has such a strong supplier diversity program, why potential suppliers should follow instructions when they are involved in the procurement process, and why being a LGBT-certified business matters when New York Life looks for vendors and suppliers.
BIZ: What is New York Life's philosophy about supplier diversity and why does it have such a strong program?
AF: New York Life is committed to diversity. We strive to ensure that we are a company where people of different backgrounds are respected and appreciated. We believe that diversity strengthens our workforce and enables us to serve our customers better.
Our commitment to diversity also extends to the vendors with whom we do business. We make a concerted effort to ensure that our pool of suppliers includes minority- and women-owned business enterprises (M/WBEs) as well as LGBT suppliers—it gives us a competitive edge by providing a wider range of ideas and perspectives that better reflect our diverse employee and customer base. We believe that when a broader field of qualified companies is encouraged to compete for our business, quality and value are inevitably driven upward.
M/WBEs have always been represented in our supplier population. With the establishment of the NGLCC as a certifying agency, we are proud to include certified LGBT suppliers in our program. The New York Life Supplier Diversity Program demonstrates our commitment to an inclusive approach when selecting vendors. By bringing more attention to this initiative, we have created better understanding and cooperation on the part of internal decision makers. This program is now an integral and consistent part of our procurement processes.
BIZ: What is New York Life looking for in its first-tier and second-tier vendors/suppliers?
AF: We look for suppliers who can demonstrate to us that they can add value by providing the best-quality products or services at the lowest cost, and can provide innovative and creative approaches and solutions to meet our needs. We have a rigorous bidding process and diverse suppliers must demonstrate their ability to compete and win our business by meeting our strict standards and requirements. They are expected to be able to invoice electronically, be fluent in electronic-records keeping and communication, and maintain their own Web sites. We look for our suppliers to be our partners, not just our vendors.
BIZ: What would you advise to a business that has just become certified as it considers approaching a Fortune 500 company?
AF: Newly certified businesses should do their homework and learn about the specific Fortune 500 company that they are approaching. They should understand what the potential corporate client is looking to procure. This may sound simplistic, but financial services companies do not buy the same as, for example, a manufacturing company. Information gathering should include inquiries about currently managed programs for their product or service and what the bidding cycles are. They must also possess patience to become successful partners with the company in the long run. It takes time to build relationships. It can take any new supplier, including diverse suppliers, four to five years to win a contract. I recommend that they register on the corporation's supplier diversity Web sites so their information can be retained for future reference. We ask that potential diverse suppliers register with us at www.newyorklife.com/supplierdiversity.
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?
AF: Certified suppliers should always reach out to me first. Individual business units are not responsible for contracting. Supplier diversity program managers, such as myself, have the knowledge of what goods and services are currently needed or when contracts are about to expire. And, through our networking activities, we may also have an idea of a current need at another company. For example, even if an impressive diverse supplier isn't the right fit for New York Life, I can recommend them to a peer company. We really promote the diverse suppliers in every sense of the word.
BIZ: Are there pitfalls that new businesses need to avoid?
AF: As already mentioned, lacking knowledge and incomplete research of the corporation's corporate culture and needs should be avoided. Also, there is the temptation to call too many people in the corporation. Some suppliers think the "divide and conquer" approach works, but that just puts the supplier in a bad light, as one who doesn't follow corporate policies. Aiming too high is another pitfall. For large contracts, as a new vendor to the corporation, there should be a willingness to gain entry as a second-tier supplier and settle for a smaller piece of business. This will allow the new supplier to establish a track record with the corporation. If a supplier is involved in an RFP process, they should answer all questions directly and concisely. Avoid canned responses. Procurement people do not want to read marketing copy. They want to know what you do, how you do it and what distinguishes you from the competition. Timely responsiveness is very important. If asked for additional information, respond quickly.
BIZ: Do small businesses really have a chance to work with New York Life?
AF: Yes, our 2009 spend with diverse suppliers is 8 percent of our total sourceable spend—this places New York Life at the top of the national average of corporate spend with diverse business enterprises. We are very proud of this accomplishment, and continue to strive to build on this success and improve on these numbers. We have consistently increased our year over year spend with diversity-owned businesses since the program's inception in 2002, and have experienced a dramatic increase in the number of diverse suppliers who are participating in our procurement processes. Diverse business representation in our supplier base includes traditional products and services (e.g., print, promotional items, IT staffing) and non-traditional products and services (e.g., banks for our equipment leasing, electricity, a realty company, Westchester fitness center), as well as subcontracting opportunities through our prime suppliers.
BIZ: Does NGLCC certification really matter, especially if business owners feel that they already provide a great product or service?
AF: Absolutely. New York Life depends on certifying organizations such as the NGLCC because their certification processes are so stringent. This process helps to preserve the integrity of our program. New York Life and its peers do their benchmarking against other members of the Financial Services Roundtable (FSR), an industry-specific group of National Minority Supplier Development Council members. The idea is not so much to be competitive as it is to strengthen our own programs, foster the growth of diverse businesses and promote our supplier base. We often rely on each other for referrals and will only refer certified diverse suppliers to each other. In the case of LGBT suppliers, FSR members would utilize the NGLCC database for referrals. Also, certified businesses can take advantage of the educational and mentor/protégé programs and networking opportunities provided by the NGLCC. I always encourage diverse suppliers to become certified.
