CALCULATING THE TRUE ROI OF SUPPLIER DIVERSITY

CALCULATING THE TRUE ROI OF SUPPLIER DIVERSITY

For most business functions, quantifying return of investment, or ROI, is an imperative.

It is no different for supplier diversity.

Within your business, procurement organizations may expend financial resources, dedicated personnel and systems to support diverse enterprises within your supply chain, and it is prudent to understand the ROI. In supplier diversity, this is especially essential because metrics surrounding the value proposition are a key component of a larger business case.  It’s important to be armed and prepared to protect and promote your supplier diversity efforts to executive management to retain their buy-in and commitment.

Many advocacy organizations, as well as consulting firms, offer formulas based on financial management principles to come up with a true ROI for supplier diversity. However, often times corporations that work with diverse suppliers also recognize that the true value of diverse businesses, can be difficult to pin down to a purely financial calculation. 

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