Introduction. and Hispanics as $1.3 trillion.

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2 Introduction Supplier diversity is the proctive business progrm supporting minority owned, women owned, vetern owned, LGBT owned, service disbled vetern owned, historiclly underutilized business nd SBA defined smll business vendors. This trgeted business pproch hs been embrced by vriety of businesses including the elite group of 20 compnies comprising Wlmrt, Johnson Controls, Johnson & Johnson, Kiser Permnente, Toyot nd Verizon of the Billion Dollr Roundtble (hve spent $1 billion with diverse suppliers nd re DBP members). Why re top compnies going ll in on supplier diversity? According to the report ROI Relted Supplier Diversity by the Hckett Group Inc., supplier diversity progrms dd $3.6 million to the bottom line for every $1 million in procurement opertion costs. In ddition to positive ROI, minority owned businesses re mong the fstest growing in the United Sttes. As of 2014, the Selig Center reported buying power for Blcks s $1.1 trillion, for Ntive Americns s $100 billion, Asins s $770 billion 1 nd Hispnics s $1.3 trillion. Supplier diversity like ny field hs it s own lnguge. There is diversity certifiction, which uthentictes tht legitimte diverse group owns the business. Certifictions re vilble through the Women s Business Enterprise Ntionl Council (WBENC) nd the Ntionl Minority Supplier Diversity Council (NMSDC) s well s through stte governments. Terms to know in the industry re NMSDC (Ntionl Minority Supplier Development Council), BCF (Business Consortium Fund) nd HUB (Historiclly Underutilized Businesses). This member poll ssessed how compnies run their Tier II supplier progrms. The industries represented in the results include finncil services, helthcre, consumer products, ccounting, telecommunictions, insurnce nd phrmceuticls. Also 61 of the respondents were representing their compnies globlly. The following pges contin the recorded responses nd rw dt of the member poll. 1 "UGA Tody." Minorities Energize U.S. Consumer Mrket, According to UGA Multiculturl Economy Report. 30 Sept Web. 19 Feb

3 Respondents Industry: Number of Employees: Revenue: Finncil Services Bnking 18,503 $6B Helthcre $31b Consumer Products 110,000 $76,000,000,000 Insurnce billion Accounting/Finnce 7,000 $1.5 billion Finncil 11, ,000,000 Beverge Alcohol B Finncil Services 5000 n/ Mnufcturing 45,000 70,000 $25B $35B Non Profit billion Finncil Services 50, B Supplier Diversity 1 $30B+ Retil Phrmceuticl B+ Telecommunictions 177,300 $127.1 B Telecommunictions, Wireless $29.6B in 2014 nnul Insurnce Over 8,000 $37B Phrmceutils 17,000 19,000 $5B $6B Sttistic Vlue Totl Responses 18 Are you representing your compny globlly? # Answer Response 1 Yes No (plese indicte the region you re 7 39 representing) Totl No (plese indicte the region you re representing) North Americ

4 United Sttes of Americ Our Supplier Diversity Progrm is ntionl US USA Reporting for US only. We do not hve Globl Supplier Diversity Progrm Do you hve Tier II supplier progrm? # Answer Response 1 Yes No 4 22 Totl Do you require your suppliers to report the demogrphic brekdown of their Tier II spend (MBE, WBE, Disbled, LGBT, etc.)? # Answer Response 1 Yes, nd how so? No 3 17 Totl Yes, nd how so? The templte contins fields broken down the vrious diverse segments including those listed bove. MBE by ctegory, SBE, WBE, DBE, VBE, SDVBE, LGBT, DIS, HubZone, 8, SDB MBE, WBE, LGBT, Vetern I provide the suppliers with spredsheet so tht they my report spend by clssisiction MBE, WBE, LGBT, VOB, SDB, MBE, WBE, Disbled, LGBT, Vetern, nd Service Disbled Vetern Through our Tier II spend reporting form emil

5 By diverse clssifiction nd if vilble for MBE by ethnicity Certified through ntionl orgniztion if estblished s: MBE, DBE, WBE, VBE, SDVBE, HUBZone This informtion is requested of our suppliers to be submitted into 3rd prty mnged system by demogrphic clssifiction Our suppliers report both Direct nd Indirect spend with specificity towrd brekdown of Minority, Women, Disbled, Vetern, LGBT, etc. MBE, WBE, MWBE, LGBTBE, Vetern, Disbled Vetern Yes, when Tier II is pplicble to the contrct By diverse ctegory Sttistic Vlue Totl Responses 18 How do your suppliers report their Tier II spending to your orgniztion (Excel, 3rd prty tool, etc.)? Text Response Currently we re undergoing n upgrde to our online portl so it's Excel; however lter in 2016 it will be on 3rd prty tool. This informtion will be uploded through our new supplier mngement system Proctis/53Connect third prty tool CVM Solutions 3rd Prty Electronic Tool Excell spredsheet Procurement opertions t GT re mnul; it's difficult to trck Tier I nd virtully impossible to trck Tier II Excel, 3rd prty reporting tool Excel spredsheet submitted vi emil Through compny softwre ppliction Excel 3rd prty portl developed for our Tier 2 reporting Tier 2 progrm in development process Intention to utilize CVM Solutions s our portl to submit nd receive reporting 3rd prty tool Suppliers report vi our Tier2 Reporting web portl Vi Excel through 2015, switching to 3rd prty SS tool Excel Third Prty Tool Sttistic Vlue Totl Responses 17

6 How often do you sk your suppliers to report (qurterly, nnully, monthly)? Text Response Depends on the supplier. Most re qurterly but some re monthly or nnully. Once Proctis/53Connect is fully rolled out, suppliers will be sked to report nnully Qurterly but with one qurter lg to llow time for reporting (Q3 is reported in Q4, etc) Qurterly Qurterly We trck Tier I spending through our own spend dt qurterly Qurterly Qurterly Qurterlyy The mjority of our prime suppliers report qurterly while those tht we work more closely with nd mnge their direct spend efforts report monthly Tier 2 progrm in development process Plnning to receive reporting qurterly Qurterly Qurterly Qurterly Annully Qurterly Sttistic Vlue Totl Responses 17 How mny compnies re reporting Tier II spend to your orgniztion? Text Response of our lrger Tier I suppliers To dte 4 suppliers however we pln to expnd the progrm this yer to 20 suppliers Tier 2 progrm in development process Expect to hve 50+ to begin with

7 > or fewer Sttistic Vlue Totl Responses 17 Do you hve set Tier II percentge obligtion for your suppliers? # Answer Response 1 Yes (plese provide percentge below) No Totl Yes (plese provide percentge below) Rnges from 5 to 30 depending on ctegory only for select few nd it vries by contrct. Others do not hve set gol. Depends on the supplier bseline is 15, but rnges from 5 to Some lrger contrcts do include diversity percentges especilly when we re wre of the gret mount of opportunity in the spce s strting point for supplier contrctul negotitions When direct subcontrcting is fesible for the tier 1 supplier. Vries by contrct Sttistic Vlue Totl Responses 18 Do you determine your suppliers Tier II contrctul obligtion bsed on industry or ny other fctors? # Answer Response 1 Industry 6 33

8 2 Other Fctors (plese list) Totl Other Fctors (plese list) by contrct We bsed the obligtion on the size of the contrct nd insutry they re in. neither Size of contrct nd during renewl of new contrcts we re beginning to require. We do not hve forml Tier II Subcontrcting Progrm Tier 2 progrm in development process Not decided Type of service provided Industry, Contrct Structure, Totl Spend Bsed on fesibility for direct subcontrcting. Vries by contrct Typiclly by spend Sttistic Vlue Totl Responses 18 Wht ws your overll 2014 Tier II spend percentge? Text Response 3 With the lrge Tier 1 suppliers where this ws monitored 10 we combine nd don't brek it out tht wy 4 Tier II progrm not estblished 0 4 N/ percent 35 of our diversity spend 17.5 Indirect Spend We currently only cpture nd report ggregte Tier II dollrs 4.0 As reported to the CA Public Utilities Commission, 1.1 of net procurement 2.56 New Compny will represent first yer results. Sttistic Vlue Totl Responses 18

9 Wht ws your overll 2015 Tier II spend percentge? Text Response As of Q3, we combine nd don't brek it out tht wy N/ percent ~37 of our overll diversity spend 18 Indirect spend We currently only cpture nd report ggregte Tier II dollrs 2.7 As reported to CA Public Utilities Commission (pending Mrch 1), 1.3 of net procurement Not yet vilble New Compny will represent first yer results. Sttistic Vlue Totl Responses 18 Wht is the overll rtio of your 2014 Tier II to Tier I percentge? Tier I Percentge Tier II Percentge we combine nd don't brek it out tht wy we combine nd don't brek it out tht wy 11 4 NA NA Tier 2 progrm in development process New compny New Compny

10 Sttistic Vlue Totl Responses 16 Wht is the overll rtio of your 2015 Tier II to Tier I percentge? Tier I Percentge Tier II Percentge we combine nd don't brek it out tht wy we combine nd don't brek it out tht wy Tier 2 progrm in development process New Compny New Compny Sttistic Vlue Totl Responses 14

11 Accounting 3 n/ Benefits nd n/ Insurnce Fcilities Expenses 20 n/ (Rent, Rel Estte, Fcilities, Security, Office Altertions, etc) HR Services n/ IT Hrdwre 8 n/ IT Services n/ Legl n/ Mngement 1 n/ Consulting Mrket Dt.25 n/ Mrketing 34 n/ Membership Dues/Subscription s Office Supplies nd Equipment Printing, Postge, Fulfillment, Hndling n/ 5 n/ 3 n/ Record Retention 10 n/ Softwre 4 n/ Stffing Services 10 n/ Telecom 7 n/ Fees/Cellulr/ Conferencing , ,534,

12 Trvel Services 1 n/ Sttistic Vlue Totl Responses 9 Which of the following ctegories do you see high mount of subcontrcting on your contrctul greements? (you my select more thn one nswer) # Answer Respons e 1 Accounting & Audit Benefits nd Insurnce Fcilities Expenses (Rent, Rel Estte, Fcilities, Security, Office Altertions, etc) HR Services IT Hrdwre Legl Mngement Consulting Mrket Dt Mrketing Membership Dues/Subscriptions 2 11

13 11 12 Office Supplies nd Equipment Printing, Postge, Fulfillment, Hndling Record Retention Softwre Stffing Services Telecom Fees/Cellulr/Conferencin g Trvel Services 2 11 Sttistic Vlue Totl Responses 18 Conclusion The mjority of respondents reported Tier II spending to their orgniztion through third prty tool or were trnsitioning from n Excel method to third prty tool. Over 70 percent of respondents sked their suppliers to report spending qurterly nd under 6 percent of respondents sked their suppliers to report nnully. The remining respondents hd combintions of qurterly, monthly nd nnully in reporting or were still developing their Tier II progrm. On verge respondents hd 78 compnies ech reporting Tier II spending to them with the full rnge of reporting 0 to 300 compnies. Just little under hlf 44 percent of these respondents hd set Tier II percentge for their suppliers. Of this minority the rnge of required percentge rnged from 5 percent to over 30. The Tier II contrctul obligtion ws bsed on industry 33 percent of the time nd 67 percent of the time bsed on contrct nd industry, fesibility nd type of service. Looking t overll spending in 2014 nd 2015 compnies spent bout double the mount on Tier I compred to Tier II. The highest reported Tier II ctegories re

14 mrketing nd stffing services while the lowest reported Tier II ctegories re ccounting nd trvel services. The highest mount of subcontrcting in contrctul greements occurs in stffing services (78 percent) nd rel estte, fcilities, security nd office ltertions (67 percent). The lest mount s in 0 percent of subtrcting in contrctul greements occurs in ccounting nd udit, benefits nd insurnce, mrket dt nd record retention.