If there were a shortlist of core procurement skills, benchmarking would undoubtedly be on it. And yet, for the ease of agreeing that benchmarking is critical, getting it right in each instance remains a challenge.
What should procurement benchmark against in order to get an accurate understanding of how well the team (or company) is performing in a given practice area? The answer to this question will determine how impactful the results are.
Art of Procurement recently ran a LinkedIn snap poll to better understand current benchmarking practices for assessing supplier diversity performance. While 18 percent of programs don’t benchmark at all, the vast majority of programs do – and they take different perspectives into consideration.
Practically tied for first place are companies that benchmark against their own internal goals and companies that benchmark against their industry peers. In both cases, sufficient data has to be available… publicly in the case of industry comparisons. For the 38 percent of respondents that are benchmarking internally, any benchmarking is better than none, but this may or may not satisfy regulatory or customer-driven supplier diversity requirements.
Philip Ideson and Peter Smith had an exchange in the poll comments about the challenge associated with accessing trustworthy data. As Philip pointed out,
“We didn’t have a formal program, our focus was on meeting our own internal goals, which were aligned with government/regulatory goals. Just trying to figure out which suppliers were classed as diverse was an art form in itself, and it is fair to say that we likely missed reporting on a huge percentage of diverse spend as a result.”
It is very difficult to assess the performance of a supplier diversity program when data isn’t available about which suppliers are certified diverse. Clearly this is the first step in increasing the impact of a supplier diversity program – measuring internally as well as against industry peers. With more context, benchmarking not only becomes more achievable, but it also becomes more meaningful to the communities these programs are designed to connect with.
To learn more about the importance of supplier diversity program benchmarking and to discover best practices from leading programs, join Art of Procurement and the team from Supplier.io on March 7th for an AOP Live session: Benchmarking Supplier Diversity to Drive Performance