MSDUK launches MSD – Europe in an effort to expand opportunity for minority businesses across the Continent

picture-80-latestThe launch of MSD – Europe during the MSDUK 2016 Conference provided one of the many highlights of the three day Conference held in London this September. However, its importance is even greater when taking into consideration what this project aims to achieve and the challenges it has to overcome to become a success. MSD – Europe has often been discussed by various stakeholders that are part of the MSDUK network, the leading non-profit membership organisation driving inclusive procurement in the UK, and has been has been a lifelong ambition of MSDUK Founder and CEO Mayank Shah: ‘Since the inception of MSDUK I have always looked towards Europe with the hope of extending more opportunities to those minority/migrant businesses operating in various European countries and advocating the benefits of inclusive procurement supply chains’.

As Mayank points out, the challenge for expanding into Europe has always been in identifying the right country to start the process. This is because different EU countries compared to the UK have different definitions on ethnicity, and in some, ethnic minorities are not recognised as existing groups. A clear example of this is France which under its egalitarian beliefs treats all citizens the same, refusing to group them into ethnic categories.

For MSD – Europe to become successful in its support of minority businesses it was important that it operated in a country that has embraced multiculturalism and recognises the existence and contribution of its ethnic minority/migrant population and the obvious place to start was Germany. Not only is Germany Europe’s economic powerhouse but it also has a large migrant population that is still growing as a result of the latest wave of immigrants coming into Germany over the last 18 months. Furthermore the country has had a substantial increase in migrant enterprises from 200,000 in the 1990s to 760,000 in 2013. In 2015, of the total number of new businesses, 20% were created by migrants. We believe that MSD – Europe will drive the way for economic and social integration of migrant communities in the country.

MSD – Europe will replicate the work done by MSDUK in Britain in supporting the development of ethnic minority/migrant businesses and entrepreneurs by opening new opportunities and connecting them to large purchasing organisations thus promoting supply chain inclusiveness and diversity. Mayank Shah, CEO of MSDUK says that ‘Germany is only the starting point and our aim is to expand into other European countries within a number of years. We have already started to look towards Ireland and the Nordic countries’.

As population demographics change, EU countries will become more ethnically diverse in the future and today’s majority ethnic groups will no longer comprise a numerical superiority thus is important that ethnic minorities have a stake in the societies they settle. This can be achieved through economic empowerment by providing opportunities for minority/ migrant businesses across the continent and this is what MSD – Europe aims to achieve.

MSDUK celebrating 10 years of diversity within business

Over 300 guests and hundreds of purchasing organisations from across the world came together to represent and promote the ethnic minority business community at the MSDUK 2016 Awards.

Overlooking the iconic Tower Bridge, the gala ceremony took place at the Grange Tower Bridge with a global audience who reflected how societies, countries and economies around the world are built by people from different backgrounds, cultures and origins working together.

The MSDUK awards honoured and recognised individuals who have shown great passion and belief in ethnic minority businesses by becoming true partners in their success and growth. The awards also celebrated the best of British ethnic minority entrepreneurs who have embraced innovation, achieved consistent growth and are doing this with a responsibility towards society and the environment.

Leading the way this year were women and entrepreneurs who started their journey outside Britain’s business capital – in smaller cities such as Bolton and Leicester.

After winning the Ernst & Young Scottish Entrepreneur of the Year (2010) and the Director of the Year for Glasgow and West Scotland (2009) by the Institute of Directors, Dr Rabinder Buttar, CEO of ClinTec International, won the Scale Up Business of the year – showing inspirational growth.

awards-clintecOn winning the award Dr Buttar said: “I am thrilled to accept this prestigious award on behalf of ClinTec International in recognition of our ongoing expansion both in service lines and in geographical reach. As founder of the organisation, I have always believed that success comes from the early recognition of what our clients want rather than what they are currently requesting for, and then having the courage to build my company along those lines. This award endorses that approach and also recognises the major contributions made by ClinTec’s management team and staff towards our future success. This endorsement puts our achievements on the map and enhances our reputation with current and future clients.”

awards-bri-tekGiving non-London businesses a voice and recognition, Britek shows that it doesn’t matter if you are in the city of London or not to make it big, all it takes is an innovative idea and determination. From humble roots in Bolton, Britek won the MSDUK Innovation Awards. Managing Director, Mo Hanslod said: “Winning means acknowledging that we have a world class commercially viable innovation that we achieved through the vision, passion and hard work of every employee in Bri-Tek. This has given a huge boost to brand recognition and credibility in the corporate world.”

awards-clifton-packaginWith one of the largest ethnic minority populations in the UK, it comes as no surprise that Leicester’s Shahid Shaikh won the Entrepreneur of the Year for the stupendous success he has achieved with Clifton Packaging.

“Winning the Entrepreneurs Award means the world to me. I strive to do my best and be the best that I can be each and every day, but to be awarded this accolade from my peers is particularly special,” said Mr Shaikh.

It is not just ethnic minority businesses, but corporates who encourage and understand the value these businesses add to the supply chain and hence deserve to be recognised. This is why the MSDUK Corporation of the Year and the Inclusive Procurement of the Year awards went to Cummins and Balfour Beatty respectively.

awards-corporation-of-the-yearUpon winning, Denis Ford, Corporate Indirect Purchasing Leader EMEA, NE/SE Asia & South Pacific said: “Cummins is dedicated to working with diverse suppliers that best deliver excellent products and services to our customers. Through our Cummins Diversity Procurement Initiative, our goal is to increase purchasing opportunities with new and existing diverse suppliers by developing and engaging with them. Winning Corporation of the Year Award will further enhance our credibility in this area and will go a long way in increasing awareness about Ethnic Minority Businesses, corporate peers and the procurement industry in general.”

awards-balfour-beatyEchoing his views, spokesperson from Balfour Beatty said: “Balfour Beatty is delighted to have won the Inclusive Procurement award for 2016. This is a fantastic recognition for the commitment we’ve made to SME and minority owned business in the UK and all the hard work that goes on behind the scenes. Winning the award tells us that we are on the right track when it comes to embedding a more inclusive approach to procurement throughout our business. We hope to inspire other businesses to adopt a similar approach and that the award and our approach to inclusivity will encourage more small and minority owned businesses to work with Balfour Beatty.”

The award ceremony was hosted by actress, author and journalist Meera Syal, with a keynote address by Mark Q McLane, Managing Director Diversity & Inclusion, Barclays Plc and Ade Adepitan MBE, British Television Presenter and Wheelchair Basketball Player gave an inspiring insight into diversity.

Real Opportunities For a Truly Inclusive Supply Chain

An inclusive approach to sourcing brings innovation, positive disruptive new products and services, can mitigate risks within your supply chain, drives competitive advantage and removes all biases, making procurement transparent and sustainable. This blog by Mayank Shah, CEO, MSDUK explores the lessons from the last 10 years helping large organisations make their supply chains more inclusive.

Read More

Interview with Matt Denham, Executive Director for Crown Commercial Service

 

Matt Denham

 

  1. Briefly introduce CCS – its role, purpose and activities

 CCS was established in April 2014. We are a trading fund and Executive Agency of the Cabinet Office providing commercial and procurement expertise and services to government and the wider public sector.

Our vision is to become the primary commercial services provider to government and the wider public sector by 2019/20, by delivering increased savings, exceptional customer service and expert advice to our customers.

  1. Briefly about your role and responsibilities

 My role is the Commercial Delivery Director which means I oversee CCS’s commercial procurement function. The team provides commercial expertise on specific categories of suppliers and offers fully managed procurement services to government. I am responsible for delivering leading-edge, cost-effective, procurement strategies and effective management of relationships across categories of suppliers.

  1. What according to you are the key reforms that have been introduced over last three years within public procurement to make it easier for SMEs to do business with the government?

 I’d say the biggest is without doubt the introduction of The Public Contracts Regulations (PCR) 2015 which came into force on 26 February 2015. These included a number of new or updated provisions that either remove unnecessary barriers to participation, or reduce procurement process costs, time, and bureaucracy.

They also mandated across the public sector a lot of the changes we’ve seen in central government, like the abolition of PQQs for low value tenders, the use of Contracts Finder and 30 day payment terms.

Additionally, they also strengthened our already very successful Mystery Shopper service, where suppliers can report poor procurement practice. The team have had over 1000 cases come in to date and, of the cases closed, 95% have resulted in a positive outcome, which is a fantastic achievement and is helping us deliver real change and improvement.

  1. What are your priorities with regards to active participation of SMEs? 

The SME agenda is a value for money agenda, it is about increasing diversity in the market to achieve better value for money for the taxpayer. So our priorities are how we procure differently to increase that diversity – such a G-Cloud or the upcoming Crown Marketplace.

  1. What challenges you face when implementing the reforms to help engage with SMEs?

 We’ve done a lot in Government to reduce the barriers to entry for SMEs but there is still more to do. There is a willingness and a desire within Government and an understanding that the SME agenda can help with savings and increasing value. What we need to work on is turning this desire into action, empowering commissioners and procurement people to take risks and to do things differently.

We’ve done a lot of work in recent years to influence the procurement directives and regulations and give procurers greater flexibility, now is the time to make use of that flexibility and deliver the best commercial decisions for our departments and local authorities.

  1. Three things an SME should do to be successful in winning a public sector contract?

 I’d say the three man things are to Play to your Strengths, Look Good in the Exam and remember, Evidence Matters.

Playing to your Strengths is about highlighting what you are good at as an SME. Use the premarket engagement to show your flexibility, innovation and speed by reacting quickly to questions, offering options and evidence of where you’ve responded to change in the past.

Understand that no matter how good you are you will not win unless you make these strengths clear on paper too. Think of it as an exam and your opportunity to impress Read the question and make sure you answer it. It sounds simple but you’d be surprised how many bids are suppliers trying to just shoehorn generic information into the boxes and nothing more. If you’ve not bid for public sector work before and are a bit daunted, ask for help.

Finally, cite evidence in your bid. If you say your system will show or do something, prove it: include a screenshot of how it works or other tangible evidence.

  1. Any further plans to make it even easier for a SME to do business with the government?

 Building on the excellent development of the Digital Marketplace, an integrated system to better support the end to end delivery of managed services, is a priority. Greater levels of automation including simple and easy to use catalogues is key to improving efficiency, effectiveness, reducing cost and making it easier to buy from smaller businesses.

We also need to a be a bit smarter about how we approach things. We’ve achieved an awful lot across Government in the last few years but now is the time to focus our efforts a little more and look at where we can make a real and significant difference.

  1. Last thoughts?

 We’ve achieved an awful lot over the last few years and Government can feel proud of how far we’ve come. That was just phase one though, we’ve got the data, we’ve got the processes and the will. Now we’re starting out on phase two, it’s going to be a challenge but if we at CCS can do our bit, we have our own internal 35% target, and departments work with us to break up their big contracts where appropriate and make use of our new systems etc, we can deliver. SMEs will win more business and government will get increased value for money. It won’t be easy, but we can do it, together.

What to Consider when Measuring ROI on Supplier Diversity

ROI is the most common measure used to evaluate performance by measuring the output of the investment on a particular programme or operation. With regards to Supplier Diversity (or Inclusive Procurement), ROI as a measure is something that is often talked about from interested stakeholders who have invested time and resources in engaging with Ethnic Minority Businesses (EMBs’) as part of their Supplier Diversity programmes.  As Supplier Diversity is part of the Corporate Sustainability agenda (not stand alone as in the US) in the UK there is often the perception that ROI on programmes is hard to determine. This can be attributed to a number of factors such as:

  • The maturity of the programmes in the UK compared to other countries particularly the US where Supplier Diversity has been practice for over four decades.
  • The lack of data collection and reporting on UK programmes.
  • Low number of opportunities provided to EMBs’ that engage with large organisations as part of Supplier Diversity programmes.    

All these factors make ROI on Supplier Diversity challenging and need to be addressed to provide a clearer picture for UK programmes.

Knowing what to measure

Supplier Diversity in the UK is slowly becoming more prominent, large organisations have realised the potential of engaging with ethnic minority, women owned, disable and LGBT businesses. Research by the Hackett Group revealed that companies with well-established supplier diversity programmes have been able to ‘generate 133% greater return on the cost of procurement operations’. This indicates that engagement with minority suppliers can increase value and lead to greater returns. The basis of successful supplier diversity programmes are rooted on sound metrics that evaluate effectiveness of in relation to ROI. A successful supplier diversity programme will have a positive effect on operational outcomes but also on overall business performance.

For those organisations whose programmes are not as well-established or in their early stages there is pressure to demonstrate that supplier diversity provides value on investment, to achieve this those in charge with delivery will have to measure a number of factors in order to quantify supplier diversity’s return on investment. Therefore in order to establish whether a supplier diversity programme is successful in relation to ROI it is important to measure:

  • The representation of underrepresented groups in the supply chain
  • The number of biding opportunities provided to minority businesses
  • Total spend with minority businesses
  • The number of minority business enterprises that have been successful in the biding process
  • The operational and business impact from engaging with minority businesses (Value/Cost reduction)
  • The impact of supplier diversity on revenue or market share

 Moving beyond Measuring

Measuring outputs on Supplier Diversity programmes is important however, large organisations need to take into consideration other forms of engagement with minority suppliers that cannot be measured by the conventional ROI formula. Investment in Supplier Diversity programmes can take other forms that move away from purely transactional practices and are supportive of minority business but can also be beneficial in the long term for large organisations. For example by identifying innovative minority businesses and taking a more active role in their development, large business can foster partnerships that will increase knowledge spill-overs and create a more reliable business environment for themselves. Furthermore playing a role in creating the architecture to develop EMBs into large business also becomes a smart procurement practice.

There are some clear instances within the MSDUK network that corporate members are focusing on a more encompassing form of engagement with a strong emphasis on minority supplier development and a more recent example of this is the ‘Pitch Perfect’ event organised by corporate members in collaboration with MSDUK. Large organisations engaged with minority suppliers have realised that for their supplier diversity programme to be successful in the UK they will have to develop a multifaceted relationship with minority businesses and focus on:

  • Helping diverse suppliers improve their capability through mentoring and training
  • Participating in diverse supplier organisation events. (Meet the buyer/Supplier, Networking round tables)
  • Enable one to one introductions to increase supplier development & engagement

MSDUK is in the process of developing a Supplier Diversity Benchmarking Tool, to be launched at the MSDUK 2016 Conference, which will enable organisations to asses he effectiveness of their supplier diversity programme and measure ROI. This online tool, developed in partnership with Accenture and CVM Solutions, will be the first ever benchmarking tool to asses supplier diversity effectiveness and will also rank individual programmes with best in class and provide support in form of consultancy, for programme improvement.