19 Mar Driving Diversity and Inclusion through Procurement: The Best Value Approach
In today’s interconnected world, diversity and inclusion (D&I) are not just buzzwords but essential components of successful business strategies. Public entities need to make sure that they are not using relationships to guide their decision by giving everyone in the community a chance to win projects. Lawsuits, protests, and disputes are happening all over the world due to discrimination and other biases. If you are not evaluating your process to make sure that you have a powerful defense for any accusations, then you are in danger! Within the realm of procurement, the Best Value Approach stands out as a powerful tool for promoting D&I practices. By prioritizing factors beyond just cost, this approach fosters a procurement landscape where diversity and inclusion can flourish. Let’s delve into how the Best Value Approach is driving positive change in procurement and advancing D&I initiatives.
Breaking Down Diversity and Inclusion in Procurement
Diversity in procurement involves engaging with suppliers from various backgrounds, including minority-owned, women-owned, veteran-owned, and LGBTQ+-owned businesses, among others. Part of doing this is to stay unbiased to any individuals or companies. On the other hand, inclusion ensures that these diverse suppliers have equal opportunities to compete and thrive in the procurement process. Competition is always a good sign of a good industry so clients will allow different measure to enable these businesses to penetrate the market.
Advantages of Diversity and Inclusion in Procurement
Embracing diversity and inclusion in procurement brings numerous benefits. It avoids the variety of political issues that come up if your process doesn’t accommodate for these situations. It also fosters innovation by bringing fresh perspectives to the table, enhances supplier relationships, and drives economic growth by supporting underrepresented businesses and communities. The community thrives as the community sees that everyone is included. Suppliers avoid places where they can see that relationship governs all projects. As a community includes more suppliers into their procurements, the supplier base, competition, and performance will increase. This overall goal of having higher quality services for the community should be at the forefront of all clients minds.
How the Best Value Approach Supports D&I
Focus on Supplier Diversity Metrics: By incorporating supplier diversity metrics into the evaluation process, organizations using the Best Value Approach can actively track and promote the engagement of diverse suppliers. Every supplier will have the opportunity if they can show with their performance that they are qualified. It can allow vendors to show value in other areas!
Evaluation Beyond Cost: Traditional procurement methods often prioritize the lowest cost, which may inadvertently exclude diverse suppliers. The Best Value Approach considers a range of factors, giving diverse suppliers a fair chance to showcase their value beyond just pricing. This allows for suppliers to get a fair chance at showing they can add greater value than the next supplier
Promoting Innovation: Diverse suppliers often bring unique perspectives and innovative solutions to the table. By valuing innovation in the procurement process, the Best Value Approach encourages the inclusion of diverse voices and ideas. This allows different options to be considered rather than the same traditional solution. This doesn’t change that every solution needs to be validated and confirmed but it allows suppliers the opportunity to prove that their solution is the best! This opportunity is a lot more than suppliers are getting anywhere else!
Risk Management and Resilience: Diverse supplier networks can enhance risk management and business resilience by providing greater flexibility and redundancy in the supply chain. The Best Value Approach considers these factors, promoting the inclusion of diverse suppliers as a strategic advantage. When different suppliers are competing for jobs, all suppliers will be working harder to mitigate risk and create a better user experience.
Case Studies: Real-World Impact
Several organizations have successfully implemented the Best Value Approach to drive diversity and inclusion in procurement:
- IBM: IBM has a robust supplier diversity program that utilizes a form of Best Value Approach to evaluate suppliers based on criteria beyond just cost. This approach has led to increased engagement with diverse suppliers and enhanced innovation in their supply chain.
- The United States Government: Federal agencies in the United States are mandated to promote supplier diversity and inclusion. Many agencies have adopted the Best Value Approach to meet these goals, resulting in increased contracting opportunities for small businesses, minorities, women, veterans, and other underrepresented groups.
- Middle Eastern Companies: Private companies in the middle east need good reasoning to bring in suppliers from different countries into their country. It can be difficult for them to branch out to other suppliers when they rely solely upon their own suppliers. It has worked for them to see the different benefits from the competition!
Overcoming Challenges
While the Best Value Approach offers significant benefits for promoting D&I in procurement, challenges still exist. These may include limited supplier diversity data, unconscious bias in decision-making processes, and resistance to change within organizations. The biggest challenge is having organizations adopt this philosophy after doing things the traditional way for so many years. Addressing these challenges requires ongoing commitment, education, and collaboration across stakeholders. It also takes a concentrated and concerted effort that takes into consideration all parties involved in the procurement process. One party can severely deter the ability for procurement to promote D&I.
Conclusion: Driving Change Through Inclusion
In conclusion, the Best Value Approach represents a paradigm shift in procurement, one that prioritizes diversity, inclusion, and value creation over simple cost-cutting measures. By embracing this approach, organizations can foster a more inclusive procurement ecosystem that not only drives business success but also creates positive social impact. In this shift, procurement doesn’t have to be biased to any company. Companies can all improve together through the competition that BVA brings to the industry. This doesn’t just hep the clients but the vendors will also benefit from the differential that will be shown from high performing suppliers versus the low performing suppliers. Together, let’s continue to champion diversity and inclusion within procurement, ensuring that everyone has a seat at the table.
To learn more about the Best Value Approach go to out YouTube Channel for: CLICK HERE or website CLICK HERE.