Business spend management vendor Coupa is hoping to change the way that companies are able to connect with a more diverse range of suppliers, by launching a new inclusion initiative. Coupa's belief is that companies are struggling to diversify their supply base to include companies from underrepresented groups because of a lack of information and technology.
Instead of creating diversity roles within organisations, Coupa wants to embed diversity into workflows, so that companies have insight into where they are spending their money and who with. This will be coupled with new tools - including a diverse supplier portal, which can be found at supplierinclusion.com - and educational resources to drive the necessary change.
The aim is to deliver economic growth directly to companies that are owned by minority and underrepresented groups, by directing business their way, away from the incumbents. At the same time, Coupa believes that this will create more competition in buyers' supply chains and drive innovation opportunities.
The Coupa Inclusion Initiative, which has been launched following the acquisition of diversity supplier specialist ConnXus earlier this year, will help companies incorporate diversity into processes by surfacing inclusive suppliers by region, industry and diversity classification. The programme is currently focused on North America, but there are plans to expand it internationally.
Some of the groups that Coupa has partnered with include the National Minority Supplier Development Council (NMSDC), Women's Business Enterprise National Council (WBENC), Minority Supplier Development United Kingdom (MSDUK), Global Supplier Diversity Alliance (GSDA), and National Gay & Lesbian Chamber of Commerce (NGLCC). To become a supplier in the Coupa Inclusion Initiative, register your business here.
We got the chance to speak to Rod Robinson, Vice Presidents of supplier inclusion and sustainability at Coupa, who is also the founder of ConnXus, about the programme and its ambitions. When asked what success looks like for the initiative, Robinson's answer was unequivocal - it's about driving direct economic growth for diverse suppliers. He said:
What success looks like is this - "wow, I joined the Coupa portal 24 months ago and my business has grown 100% as a result of that". That's the headline we want to create. We want suppliers to be successful. Our success will be measured by the success of suppliers on the platform.
In addition to the supplier portal, the initiative also includes:
Resources such as whitepapers, videos, and certifications, which are available to help diverse suppliers gain the requirements needed to partner with larger companies
An advisory board of global diversity leaders and experts to help guide Coupa to become a destination for inclusive suppliers who need mentoring, exposure, and connections with buyers
The business need
Robinson said that his drive for inclusive supply chains comes from his experience previously working as a Chief Procurement Officer at a major US corporation, where he found that an optimal supply chain was one that was more open and competitive, rather than relying on a small pool of the same suppliers. He said that driving this agenda at the time led to lower costs, higher quality and optimal value - whilst bolstering growth for diverse, smaller firms. He said:
Having a more open supply chain meant that you were open to more innovation and there was more competition amongst the suppliers. And so that was really it for me, it was really to drive efficiency.
That's what ultimately what my team and I realised, when I was running procurement at Cincinnati Bell years ago, was that there was a lot of success in not only driving costs out of the supply chain but also increasing diversity. So really it's about value at the end of the day.
Prior to being acquired by Coupa in May, ConnXus was already seeing huge demand for its solutions, Robinson said. However, he added, that since the killing of George Floyd and the resurgence in the Black Lives Matter movement, demand has significantly increased as companies continue to educate themselves on diversity programmes. Robinson said:
We are seeing a three to five X increase in demand. After the George Floyd incident and the racial unrest, it was crazy because just about every Coupa customer I came into contact with wanted to know if they could buy the ConnXus solution today.
In terms of the impact on the suppliers themselves, Robinson uses ConnXus as an example. He said that in the firm's early days ConnXus was made up of a team of just four employees, including Robinson himself. However, the first major contract the company landed was with McDonald's, which unsurprisingly had an immediate impact on ConnXus's growth. He added:
We were a certified diverse firm and if McDonald's had gone to the incumbent, it would have been business as usual. The fact that they were willing to take a risk on me and my three employees, the result was we went to 12 employees because of that contract. When small businesses succeed, the economy succeeds. You can have way more impact not going with the incumbent.
Why integration with Coupa matters
It shouldn't be overlooked that central to this initiative is ConnXus's integration with Coupa's business spend management platform. Robinson said that companies typically try to respond to diversity initiatives by hiring ‘diversity chiefs', which often struggle to drive any real change for those that need and deserve the opportunities.
However, what this initiative does is embed diversity into the processes across the organisation. Robinson explained:
I've always been a believer that supplier diversity shouldn't be a separate bolt-on to procurement, it should really be an integral part of the procurement process, part of the organisation's strategy.
I think what companies have struggled with in terms of launching supplier diversity programmes is just baselining. So the first step is understanding, where are we today? Really having visibility into their enterprise spend, but also having the ability to identify those suppliers within their supply chain that are certified as diverse in some way. That's the baseline product we bring to the table - a data enrichment product. That's the first step.
The next step is getting it into the workflow. Oftentimes, because organisations are siloed, purchasing decisions are made prior to the involvement of the supplier organisation. And that's part of the reason we saw opportunity with Coupa, because Coupa is a platform that was built to kill silos. We have this really rich data around diversity classifications and Coupa has nearly $2 trillion in spend, so now you can really connect spend with that supply.
This is an impressive initiative because it goes beyond platitudes and has the potential to drive real cash dollars to diverse suppliers that perhaps might not have had the opportunity previously. Not only this, but Coupa's intention to support diverse suppliers through any potential growth to help reduce the risk for larger buyers is significant. We look forward to watching this initiative expand and hearing more about the success stories off the back of it.