Supplier Diversity Plays a Vital Role in Telecom Procurement

by Innis Buggs on July 28, 2011

These are unparalleled times in the telecommunications industry. Despite the slow economy, U.S. businesses have increased spending on telecommunications services, and this phenomenon shows no signs of slowing in the near future. Supplier diversity, however, seems to be the ideal habitat to an uncharacteristic genre of economics – exclusion.

According to a recent report by In-Stat, “[U.S.] enterprise business spending on IT and telecom services, which include cloud computing, wireless, wireline voice, wireline data, and business IP/VoIP,” will increase 6 percent by the end of 2011. The report also reveals that enterprise spending on wireless data will draw near $17 billion in 2015. These statistics show that there is indeed ample room for diverse suppliers to participate in the telecom corporate supply chain.

“It seems to me that there is actually a piece of the pie that we can contribute to,” Dr. Nicol Turner-Lee, Vice President and Director of the Media Technology Institute at the Joint Center for Political and Economic Studies, stated at MMTC’s 9th Annual Access to Capital and Telecommunications Policy Conference when discussing how important diversity suppliers are to the telecom industry. “As innovators, minority entrepreneurs and business owners can act as either application producers, suppliers, or work in or open new industries that service these marketplaces,” she added.

Minority- and women-owned business enterprises are among the fastest growing segments of the U.S. economy. A U.S. Census Bureau report released this year revealed that between 2002 and 2007, the amount of black-owned businesses increased by 60.5 percent – more than tripling the national rate of 18 percent. Moreover, during the same time, black-owned business revenue increased 55.1 percent to $137.5 billion. The expansion of these businesses, however, remains stagnant within the telecom sector.

An increased number of diversity suppliers would enable major technology and telecom corporations to provide the best products and services possible to its customers. For example, AT&T has established a direct link between the telecom sector and minority- and women-owned businesses. The company prides itself “as a pioneer and a national leader in developing and implementing supplier diversity best practices” They’re right.

AT&T has reached some of the highest diversity spending results in the country. The company increased its diversity spending by nearly $2 billion from 2007 through 2009. In 2009, the company spent 6.9 billion with minority-, women-, and disabled veteran-owned enterprises – 14 percent of their total procurement.

“We are an organization that connects certified minority-owned and disabled veteran businesses with the opportunity to provide products and services to AT&T around the world,” said Marianne Strobel, Executive Director of Supplier Diversity at AT&T Services. “One of the things we have done in the last 18 months is expanding our supplier diversity, and being more strategic, showcasing best practice and bold initiatives,” she added.

Supplier diversity departments within these companies must work closely with supply chain management and internal business units to make sure diverse suppliers are included in the procurement process. Therefore, these innovative companies can apply their unique knowledge to communities they understand best – benefiting both the telecom industry and society as a whole.

  • Innis Buggs is a legal intern at the Minority Media and Telecommunications Council. This fall, he will be entering his third year at Rutgers University School of Law.

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  • John_Q_Public

    Diversity issues are so important in this day and age. It’s great to see that some of our country’s largest companies take these issues seriously and have committed so many resources to ensuring that they are reaching out to a broad array of companies as they can.

  • S.W.

    Interesting! This is an issue I hadn’t given much thought to, but now see that it is extremely important.  Increasing the number of diversity suppliers will transform the telecom sector in ways that MMTC and other interested stakeholders have longed for.

  • Procurement Transformation

    Great share…!! Diversity suppliers will make a boon in the telecom industry. Good to see that the companies are taking this seriously.

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