Minorities and Women Drive Revenue

Corporations seeking a competitive edge reach out to women business owners

Last year, in a down economy, consultant Sharon Castillo’s phone started ringing off the hook. Corporations seeking a competitive edge wanted help in reaching more women business owners; in an effort to reach them as customers, they wanted to give them contracts.

Companies now realize that providing women- and minority-owned businesses with contracts is good business. It has a positive impact on the supply chain and it drives revenue.

Ms. Castillo is the principal of SB Services, a nationally recognized management consulting firm that helps corporations develop a Women’s Business Development Program, a formalized initiative enabling them to proactively seek out and integrate products and services provided by women into the supply chain.

In a 2007 report she authored, The Business Case: Women Owned Businesses in the Supply Chain – Influencing Women Consumers, Ms. Castillo laid out three scenarios of how and why corporations have developed strong women’s business development initiatives. Statistics show women influence 90 percent of the purchases in the U.S. Whether a company is selling to the government, to other corporations or to consumers, SB Services assists them in clearly documenting a significant ROI from women’s business development.

“We have helped clients achieve $1 billion in spending with women and minority-owned firms,” Ms. Castillo says. “That’s a ton of money. If there wasn’t a significant ROI, that would never happen.” Among the Fortune 500, 80 of the top 100 companies have a women-owned business initiative.

“If you’re a woman-owned firm, there’s no question you still have to come to the table, compete and add value,” Ms. Castillo says. “The advantage of being woman-owned is that sometimes it helps get you to the table.”

In Chicago, two examples of corporations with outstanding women’s business development initiatives are Nielsen and BP.

From a corporate perspective Nielsen – the global leader in measurement and information that measures what consumers watch and buy in more than 100 countries around the world – has developed a best practices model of working with women-owned business enterprises to build collaborative relationships. That these relationships happen to be mutually beneficial for the WBEs and Nielsen is simply icing on the cake.

“We are very strategic in our inclusion of WBE businesses,” explains Brinda Bradley, the company’s director of Supplier Diversity. “We’ve found that these relationships give us a chance to not only promote brand loyalty, but offer the potential to increase our market share. And it works out really well for the WBE’s because they receive the credibility of supplying services for a global company. Together, we’re helping to boost the economy of the communities we serve.”

Ms. Bradley recalls working with Overture, LLC, an advertising material distribution services WBE. “We needed 300 iPads, quick, fast and in a hurry. Not only did Overture deliver the product to us quickly, but they did it at a lower cost than what we would have otherwise paid. That’s the type of business model we like to mirror repeatedly – fast service, lower costs. And it’s why we set specific WBE goals.”

BP America is also committed to bringing women- and minority-owned firms into its supply chain by contracting with local suppliers in markets where they have a presence. “We believe that providing contracts to minority- and women-owned firms gives us a competitive advantage and also improves the economy in the geographic areas where we work,” says Debra Jennings-Johnson, director of Supplier Diversity at BP America, and board chair of the Women’s Business Development Center.

As an example, BP has had a long-term relationship with Wedgeworth Business Communications, a WBE-certified company, to handle its communications work. The firm now has a master service agreement with BP, and outsources work, such as professional photography, to other WBEs and MBEs.

BP has also developed a concept to increase the number of WBEs and MBEs by commodity and category. Categories range from fabricated materials to staffing. “Some categories are easier to fill than others,” says Ms. Jennings-Johnson. “The bottom line is, we’re always looking to add good women- and minority-owned firms to our supply chain.”

Tagged as: diversity, women business owners, minority business owners, WBDC, Fortune 500, Nielsen, BP, WBE and WBENC