Technology “ready” suppliers find an advantage NEMSDC puts e-procurement matrix to work

Wil Spencer, president & CEO of the New England Minority Supplier Development Council, has a message he wants delivered to diverse suppliers: get your technology house in order.Spencer recounted that often he will receive a phone call, say late on a Friday, from a purchasing organization that wants to include minority suppliers in a contract possibility going out for bid Monday morning. But almost as often, as he seeks to recommend suppliers, he finds they may lack fundamental technologies that will bring them immediately to the attention of the corporate purchaser.

The first thing they ask for, of course, is a Web site. Too often, the supplier won’t have a Web site. I will call the supplier the next day and say you missed out on an opportunity because you did not have a Web site,” Spencer said.
“The Web site is seen as a credibility piece,” he added. “Some purchasers are concerned that buyers will overstate their capabilities. I always tell [suppliers] that before you leave the purchaser’s door and head to your car they are on your Web site. If they don’t see something on the Web site that matches what you’ve stated they’re crossing you off the list.”
Spencer noted that while having a Web site is a good, initial technology piece for suppliers, it is now considered a rudimentary requirement. Today’s technology-centric purchasing world also demands capabilities that include PDF document exchange, paperless ordering and invoicing, electronic contract management, electronic funds transfer and online stores and auctions, he said.

To close the gap between how purchasing organizations use technology and the capabilities of diverse suppliers, Spencer and Boston-based NEMSDC developed a tool called “e-Procurement ReadySM Endorsement.” NEMSDC-certified, minority-owned businesses can receive the endorsement by demonstrating competency in key technologies central to modern electronic procurement.

The e-Procurement Ready Endorsement program was launched in December 2006, and 12 minority-owned firms have received the designation so far. A full list of the recipients can be found at www.nemsdc.org. The NEMSDC, one of 38 chapters of the National Minority Supplier Development Council, was incorporated as a non-profit organization in 1975, serving Massachusetts, Maine, New Hampshire, Vermont and Rhode Island. The NEMSDC today includes a network of more than 350 certified suppliers and 100 corporations, universities, government agencies and other institutions.
Spencer noted that e-Procurement Ready Endorsement is a separate program from the general certification process for minority-owned suppliers. It simply serves as an endorsement of the market readiness for technology capability of NEMSDC-certified suppliers, he said.

In conjunction with the endorsement program, which includes workshops for candidates, is a graphic that outlines many of the requirements sought by purchasing organizations. Called “e-Procurement Ready Matrix,” suppliers can match their capabilities with key technologies employed at purchasing groups. The matrix shows how a particular technology relates to the cost-savings objectives that underlie a typical e-procurement strategy, Spencer said.

The NEMSDC announced the awarding of the first e-Procurement Ready Endorsements at its annual Business Opportunity Fair in May 2007 in Boston. The NEMSDC will further spotlight the program at its 2008 fair this May.
Ken Pritchard, client solutions director, at En Pointe Technologies Inc., a NEMSDC-certified supplier that resells value-added information technology hardware and services, described receiving the e-Procurement Ready Endorsement as a “differentiator for his Wellesley, Mass., company.

While already understanding the necessity of technology as an IT company, the endorsement nonetheless “gives us more of a market presence,” Pritchard said. “It helps us to communicate our capabilities to the marketplace.”
Brad Duatre, president of BRAVA Marketing, a NEMSDC-certified supplier that was founded in 2004 to market custom imprinted merchandise and promotional products, said his Hopkinton, Mass., company has embraced technology and the endorsement reinforces that.

Duatre noted that technology fosters critical communication between his company and his clients.
“Our clients now have Blackberrys and are able to send e-mails from the road. That fuels communication. They’re sending purchase orders electronically, and you need to be able to receive them electronically. We try to make it as easy as possible for clients whether they are on the East Coast, West Coast, Canada or overseas,” Duatre said.

Spencer, named NEMSDC president and CEO in June 2006 after joining the council as interim president in November 2005, said the message about electronic procurement is clear — suppliers need technology capability whether they are a sophisticated technology vendor or janitorial firm seeking contracts.

“One of the things we found [was] that suppliers weren’t aware that often they get kicked out of the game” of procurement opportunities simply because they didn’t have base technology capability, Spencer said. “Too often the suppliers don’t realize that.”

Spencer noted that corporations are making technology investments to streamline supply-chain processes and save costs. The purchasing organization typically is at the forefront of this drive to increase corporate competitiveness and most have begun to deploy technologies that foster productivity throughout their procurement apparatus.

But to reap the benefits of their technology investments, buying organizations are desperate for suppliers to have minimal base technology and technology competence, according to Spencer, a Howard University graduate who has more than a decade of executive experience at technology-based companies and small minority-owned IT firms in the Washington D.C. area.

“The good news is that although the investments that the purchasing organizations are making are sometimes pretty substantial in dollars, the competence and technologies the suppliers need to have are minimal. They don’t have to have anywhere near the investment in dollars that the purchasing organizations are making,” Spencer said.
Part of the desire by corporations to save costs through technology is the move toward “green” procurement and sustainability, Spencer said, cautioning that suppliers not able to adhere to a corporation’s green requirements may find roadblocks to future procurement.

“The corporations are now trying to be socially responsible and adjust to saving the world. We recognize that a lot of that gets pushed down into the supply chain,” he said.

Derek Brooks, president of Inside Cable Inc., a Lexington, Mass., telecommunications company and another recipient of the NEMSDC endorsement, called use of technology proficiency central to his company’s “big business management approach”
— to be able to demonstrate Inside Cable’s capabilities to corporate purchasers.

“We thought it was absolutely essential. Corporations like to do business with those that look like them,” Brooks said, whose company was founded in 2001 to provide communications connectivity solutions.

Brooks said that as with Inside Cable, the use of technology in procurement has to be an “innate” process for suppliers.
Spencer noted that the e-Procurement Ready Endorsement program can assist both start-up and veteran minority-owned companies. Some suppliers don’t believe that adding technology is worth the investment, but that approach often leads to loss of business, he said.

Spencer reiterated that the investment necessary by suppliers is minimal compared to the potentially positive reception a supplier may receive from buying organizations.
For instance, some suppliers when using electronic mail will settle for a generic address, such as from AOL, Yahoo! or Hot-mail. But the wiser move is to secure a busi-ness-specific domain name, in which the company’s name is part of the email address, Spencer said.

“They are great for personal kinds of domains and email addresses,” Spencer said. “But it does a company no good to submit an email address that’s not business specific. Buying organizations must have some assurance that they are working with a company of worth, quality and substance. A public email does not do that.”