Sourcing and Procurement
Gender-responsive procurement – mainstreaming women entrepreneurship
Today, women have successfully proven their potential and left their mark even in fields that were once considered to be a man’s forte, such as supply chain management and procurement. The Oliver Wyman report – Women in Procurement- Gender parity is a key to better performance – published in 2019, suggested that chief procurement officers (CPO) in nearly 20% of the top 60 listed companies in the United States and Western Europe, are women.
In the last few years, we have seen the presence of women increasing in procurement and supply chain roles. The transition not only validates the contribution made by women in the field, but also indicates the slow yet consistent acceptance of women in these man-bastion sectors. So much so, that it will not be wrong to say that gender diversity has been a big game changer in procurement.
The United Nation has been at the forefront in propagating gender-responsive procurement practices, as part of its focus area to strengthen position of women in areas of business and women-led businesses. Gender-responsive procurement encourages implementation of inclusive processes that endorse supplier diversity, thereby offering a significant socio-economic change for women on a global scale.
Smart economics understands the importance of creating a market ecosystem which is favourable and conducive for women participation in economic activities, thereby advocating for equal opportunity to women entrepreneurs.
With increasing levels of education and awareness, women entrepreneurs are emerging as an economic force, taking forward the ideology of smart economics. Women are now also being recognized as a rich source of employment generation and growth potential. In an article – This is why women must play a greater role in the global economy – published by the Word Economic Forum in 2018, it was noted that more than 30% of micro, small, and medium-sized enterprises (MSMEs) worldwide are owned by women, however only 1 in 5 export-oriented businesses are owned by women. According to a 2015 McKinsey report, giving equal opportunity to women in labour market can boost the global annual Gross Domestic Product (GDP) by 26% (USD 28 trillion), by 2025.
Yet, the ratio of corporate spending, with regards to women, remains in single digits. Domain experts and business leaders suggest that the way to overcome this disparity is to devise strategic plans to adopt gender parity, which will in turn open more opportunities for women entrepreneurs to become corporate suppliers
So, what is it that hampers women participation in procurement services? While one of the reasons could be the rigidity of corporates to stick with the tried and trusted suppliers they already work with, ignorance and apprehensions about women led businesses also act a major roadblock in the way for women exporters. Additionally, common factors such as challenges of SME in competing with large corporations and their inability to offer bulk or competitive rates in the initial years of businesses are some of the other deterrents, however their severity increases when it comes to women entrepreneurs.
Another major hurdle faced by women entrepreneurs is arranging for finances. Women entrepreneurs often find it difficult to convince investors during their first round of funding. They are forced to face gender bias while raising capital despite their potential and abilities. As a result, majority of the women entrepreneurs either seek financial support from families or rely on personal savings and funds.
Many a times, stereotypes also play a significant role in discouraging women from seeking professional training before starting up a business. This often holds them back from establishing robust network and expand their businesses in the later stages.
However international bodies, like the UN and governments across countries, have been laying down policies that would help women entrepreneurs sail across some of these challenges. As the world economy wakes up to the growing number of women as consumer base, sourcing from women entrepreneurs and directing supplier development efforts will go a long way in obtaining value for organizations, while also helping them meet their diversity agenda.
Steps to enhance women’s participation in procurement and supply chain -
Here are a few action points that can be adopted to that end:
Providing Information and easy access:
Providing easy access regarding a corporations’ procurement requirements, policies, and procedures can encourage more women entrepreneurs set shop and pitch their goods and services to the corporates. Besides, standardizing application process, streamlining the contracting process, and limiting the size of contracts are a few more ways to encourage participation of more women-owned businesses in the sourcing process.
Actively exploring women-led businesses:
Proactive efforts to understand women-owned businesses and connecting with them will help you identify the right suppliers for your supply chain. Several companies nowadays have mandates for spending on diversity and on women-led businesses. It is also imperative for corporates to set aside strategies and plans to make gender-responsive procurement programme an integral part of their corporate culture.
Commitment to source best value products:
It is an established fact that commitment to honour a contract and impacting higher customer orientation are key traits that women entrepreneurs bring to the table. As a supplier, women entrepreneurs can help bring transparency and efficiency to the process, allotting contracts purely on the basis of price and specific requirements of a business. AT&T, one of the largest telecommunications company, for instance, reported an increase of about $4 billion in revenues, after it engaged women suppliers in its procurement network, a manual published in 2017 by the UN Women, stated
The way forward
While gender inclusivity helps a company in building up a positive reputation in the market, a gender responsive procurement will also go a long way in building an inclusive and value-building network of suppliers. Therefore, implementation of gender-responsive procurement is undoubtedly a win-win for both the women as well as the corporates.
However, in order to gain maximum benefit of gender-responsive procurement, it is also important to ensure an increased global labour force of women actively participating in leadership roles by providing effective training, quality education, and support.
We will be happy to hear your thoughts on how your companies are ensuring inclusivity and gender responsive procurement. Write to us at BPM.SpendBytes@infosys.com.