Republished: Feature article in the Summer 2024 Edition of the NAEP Journal

by Youngbok Ryu, Francesca Grippa and Carl Zangerl, The Northeastern Lab for Inclusive Entrepreneurship

For procurement professionals in higher education, balancing multiple priorities, often with limited resources, has always been challenging. Add to the mix the goal of promoting supplier diversity. While there has long been an institutional commitment to increasing the pool of suppliers, the results overall have been underwhelming. Why is this so?

Our previous research reports explored the aspirations and frustrations of diverse small enterprises interested in doing business with colleges and universities. We learned that the higher education procurement process often seems to them like an impenetrable black box. One small business owner summed up his experience this way: “It’s hard to even know where to start in terms of relationship building and understanding what contracting opportunities might be available.”

But what about the other side of the buying equation? To learn about the perceptions of the professionals responsible for strategic sourcing and making purchasing decisions, we decided to “take the pulse” of procurement professionals at a variety of institutions across the country. By probing their views and experiences through a survey and focus groups, we aimed to understand the institutional purchasing landscape better. Why is there a gap between the commitment to supplier diversity and the programs required to make it happen? What practical steps can be taken to make significant progress? And what can diverse suppliers do to gain more access to the higher education marketplace?

The survey was completed by 101 procurement professionals representing a wide range of institutions, private and public, large and small. In most of them, the procurement function is very decentralized. While the respondents were primarily concentrated in New England, the sample was nationwide and included both senior managers as well as more junior buyers. We followed up the survey with five focus groups in order to drill deeper into the issues that emerged from the survey.

What did we learn? Overall, it must be said that the current state of supplier diversity in higher education is a mixed one. While the vast majority of institutions say they are committed to increasing supplier diversity, words often don’t translate into action.

For example, only 39% of the respondents said that their institution had a formal program of some kind to build relationships with diverse suppliers. The survey asked respondents to identify the challenges they faced in promoting supplier diversity. Among respondents, 70% pointed to staffing and budget constraints as major issues. Without adequate resources, building a formal program may not be feasible.

Drilling deeper, a focus group participant had this to say: “We would love to have a dedicated resource [to implement a formal program] even if it’s a staff person who could spend half their time on supplier diversity activities and half their time on something else. Supplier diversity is considered important, but there are other institutional priorities like sustainability that are competing for resources.”

Organizational inertia also looms large. As one focus group participant observed, “Once you’ve become a supplier, it is difficult to have the department stop using your service or product. People don’t want to switch, people don’t want to change, and those are usually your higher spend areas.”

While the roadblocks to progress are significant, the fact is that an increasing number of colleges and universities are actively seeking ways to engage with diverse suppliers. At the top of the list is establishing a central point of contact in the procurement organization. A total of 31% of the survey respondents reported that new supplier diversity programs were on the drawing board. This staff member (or team) serves as the linchpin for coordinating and streamlining supplier diversity efforts, acting as a conduit between diverse suppliers and internal stakeholders, facilitating communication with internal buyers and fostering a culture of accountability within the procurement process. NAEP’s Educational Procurement Journal has profiled a number of these innovative programs in recent issues.

The survey responses and focus groups also highlighted the importance of education and training for internal stakeholders, from procurement professionals to faculty and staff buying goods and services with their P-Cards. As one focus group participant noted, “We want to have a conversation with them about the value and benefits of supplier diversity as it relates to the goals of the university. That is a soft skill that requires training. We have to provide not only the data, but the comfort level to present the concept to stakeholders who may have never considered it before or may challenge it.”

In conclusion, while higher education institutions vocally support supplier diversity, there remains a substantial gap between their stated commitments and tangible outcomes. This research report sheds light on the complexities of implementing effective diversity programs amidst competing priorities and limited resources. At the same time, the insights gathered from procurement professionals across the nation demonstrate considerable progress – 70% reported that programs existed or were being implemented – and a recognition that supplier diversity has bottom-line benefits for both institutions and their local communities.

To download a copy of the full report, go to: https://tinyurl.com/4mruupt7