Supplier diversity: the procurement advantage
Creation of the first Québec First Nations Financial Centre
Lender expects more success stories among First Nations businesses
Supplier diversity: the procurement advantage
It’s time to unleash the talent of Aboriginal and minority Canadians
By Orrin Benn
Understanding the dynamics of diversity and its impact on the Canadian business environment is essential for corporations striving to gain a competitive edge in today’s marketplace.
Corporations that take advantage of new opportunities will prosper, while those that resist change will be at a competitive disadvantage.
A demographic scan of Canada will reveal that Aboriginals and visible minorities are rapidly increasing as a proportion of the population in the major urban areas, where most business is conducted. Already, 43% of Toronto’s population is composed of visible minorities; in Vancouver 49%; Montreal 23% and Calgary 17%. Within the next decade Statistics Canada forecasts that approximately 25% of the Canadian population will be Aboriginal and people of colour.
However, these groups lag behind the overall population in economic performance. A recent Royal Bank of Canada report forecast that Canada would see a $174 billion boost in its GDP if these groups, along with women, were allowed to reach their full potential.
The key to unleashing this potential is for corporations to recognize that diversity is a strength and a powerful business strategy that must be included in overall business planning.
Canada has the most culturally diverse population among industrialized nations, and has the potential to capitalize on Aboriginal and minority diversity to stimulate economic growth.
Adopting supplier diversity as a strategy is a win for the corporation looking to reduce total cost as well as a win for Canada. Consider this: on average, people of colour are starting businesses at more than 1.5 times the rate per year of other entrepreneurs. And according to Industry Canada, in 2001 more than 500,000 people were employed by visible minority companies that in aggregate earned more than $48.5 billion in total revenues.
"Supplier diversity, just like workforce diversity, should be viewed as a key competency for which corporate leadership is held accountable. The marketplace is increasingly multi-ethnic and multicultural. Corporate purchasing performance is enhanced with more comprehensive perspectives and options."
Corporate Canada can stimulate the growth of these small- and medium-sized enterprises (SMEs) while reducing total costs by extending procurement opportunities to Aboriginal and minority companies.
Through analyzing and managing the entire supply chain, corporations look to continually reduce total costs. Strategic sourcing is the order of the day; winning corporations recognize this and gain competitive advantage by building on the diverse strength of innovative Aboriginal and minority companies.
Many organizations find that outsourcing in such areas as manufacturing, facilities management, call centres and information technology is a faster, cheaper and smarter business solution.
Procurement from Aboriginal and minority enterprises gives SMEs the opportunity to become embedded in the supply chain of the corporation at low risk and low cost. Aboriginal and minority companies can also leverage this alliance to move up the value chain in the corporation, helping to stimulate diversification and faster growth.
Because smaller firms are typically more innovative, flexible and accustomed to producing in limited volumes, they are uniquely suited to marketing globally. In cases where size is a barrier, strategic alliances with other minority business enterprises (MBEs) can add capacity.
A smaller firm may be willing to accept risk, investment and lower return not justified by a larger firm to enter a market or manufacture a new product on contract. In addition, if the firm is minority owned, it may have global ties or expertise useful to a larger firm.
Competition in the global marketplace is more complex than ever before, with the business world expanding across borders at a remarkable pace. In order to compete effectively and gain competitive advantage, winning corporations see strength in building a larger network of suppliers.
The first private sector organization to facilitate inclusion of minority companies in procurement was the National Minority Supplier Development Council (NMSDC), which was chartered in 1972 in the United States. In 2004, NMSDC member corporations purchased $87.4 billion in goods and services from U.S. minority business enterprises.
The Canadian Aboriginal and Minority Supplier Council – CAMSC – is associated with the NMSDC. Chartered in 2004, CAMSC is a private sector-led, non-profit membership organization governed by a board of directors composed of major multi-national corporations operating in Canada. Membership includes such brand names as 3M, Cisco Systems, Corporate Express, DaimlerChrysler, IBM Canada, Magna International, PepsiCo, RBC Financial Group, Weyerhaeuser and Xerox Canada, to name just a few. CAMSC uses a certification process to enroll Aboriginal and minority companies, linking them to opportunities in corporate Canada. Similar organizations like the NMSDC and CAMSC are also operating in the United Kingdom, Brazil, South Africa, and soon, Australia.
CAMSC has a reciprocal agreement with the NMSDC in the United States, which means that any Canadian company certified by CAMSC as Aboriginal or minority owned will automatically qualify as a minority business in the U.S., thereby opening access to a significantly larger customer base. CAMSC is advocating for the harmonization of Canadian procurement policy, as it relates to Aboriginal peoples and minorities, with U.S. regulations, as a means of expanding market opportunities.
CAMSC serves another purpose, as an enabler to governments through its mission of facilitating procurement opportunities for disadvantaged small business enterprises.
Canada needs to increase its export volume as well as the contribution of SMEs to our GDP. Organizations such as CAMSC can help. In the U.S., the NMSDC and Women Business Entrepreneurs Council (WBEC) have become drivers for the strengthening of ties between corporations and minority and women business owners.
The time to unleash the talent of Canada’s bright, innovative Aboriginal and minority entrepreneurs is now. Corporate Canada can start the process by actively seeking to include Aboriginal and minority firms in their procurement planning.
A dynamic, sustainable entrepreneurial economy will result, bringing with it a long-term solution to poverty and unemployment, and fulfilling Canada’s potential for economic growth.
Orrin Benn is the President of the Canadian Aboriginal and Minority Supplier Council. The council may be reached at info@camsc.ca. This article first appeared in the PMAC Reporter (August 2006)
Creation of the first Québec First Nations Financial Centre
The Native Commercial Credit Corporation and RBC conclude a strategic alliance
On February 15th the Native Commercial Credit Corporation (NCCC) and RBC Royal Bank signed a major strategic alliance to create the first Québec First Nations Financial Centre, which will be located in Wendake and will serve all the First Nations of Québec.
In operation for 15 years, NCCC has brought together several Native financial partners to set up, in conjunction with RBC Royal Bank, this first one-stop centre for commercial products adapted to First Nations.
"What we are really creating here today is a comprehensive offer of financial services that corresponds to the situation of First Nations," said NCCC President and General Manager, Jean Vincent, "and we can now better contribute to First Nations local economic development."
NCCC is already active in a number of Québec First Nations economic projects, in particular through partnerships with the Aboriginal Savings Corporation of Canada and First Nations Venture Capital of Québec. "Our alliance with RBC will let us add many more services," Jean Vincent went on to say, "but it will especially give us greater financial participation in First Nations projects."
The new Financial Centre is a strategic alliance in which NCCC and RBC Royal Bank will work together to develop new markets, products better adapted to First Nations needs, and marketing strategies that will encourage communities to develop promising projects for their respective local economies.
"We are extremely proud to conclude this alliance with the Native Commercial Credit Corporation," stated Micheline Martin, President, Quebec Division, RBC Royal Bank, "because it will allow us to better understand and respond to the financial needs of First Nations private businesses and community enterprises."
The First Nations Financial Centre will be housed in a building complex in which the Council of the Huron-Wendat Nation is investing some $3 million, to be located at the corner of rue Max-Gros-Louis and rue de la Faune in Wendake, in the heart of Quebec City. "All the First Nations of Québec will benefit from the services of this very new Financial Centre and it is with pride that we foresee its establishment in Wendake," said Max "Oné-Onti" Gros-Louis, Grand Chief of the Huron-Wendat Nation. Construction of the building, designed by the firm of architects Lemay-Michaud, will be completed by the end of 2007.
The financial services provided by these two institutions are complementary and their advisors will work closely together to offer First Nations clientele comprehensive financing. "We already have major commercial financing projects," said the President and General Manager of NCCC, "and we will now be even better equipped to play our distinctive role in the development of promising businesses and even industry sectors for the First Nations of Québec."
NCCC
The Native Commercial Credit Corporation (NCCC) is a non-profit corporation created in 1992, and is the financial partner of choice for the economic development of the First Nations of Québec. NCCC aims to become the premier Native financial institution, providing advisory services and financing adapted to the Native needs and expectations, in partnership with other Native and non-Native financial institutions. Over the years, NCCC has administered programs touching a wide range of professional services, such as drawing up financing plans, analyzing business projects, seeking financing and providing remote financial management and administrative services. www.socca.qc.ca
RBC Financial Group
Royal Bank of Canada (TSX, NYSE: RY) and its subsidiaries operate under the master brand name of RBC Financial Group. The Royal Bank of Canada is Canada's largest bank as measured by assets and market capitalization and one of North America's leading diversified financial services companies. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It employs approximately 70,000 people full- and part-time who serve more than 14 million personal, business and public sector clients in North America and some 30 countries around the world. To learn more, go to www.rbc.com.
Lender expects more success stories among First Nations businesses
Closer ties between First Nations and non-First Nations business could provide a highly beneficial dynamic as Prince Rupert enters the container port era, says the chief operating officer of a company that lends money for Aboriginal businesses.
“In order to be a sustainable and viable business in Prince Rupert, our First Nations clients deal with the same things… (and) the First Nations communities want to partner up with whoever they can for the benefit of this region,” said Peter Lantin of Tricorp.
While there's a genuine desire to take part in the opportunities the container port offers, Lantin said no one has yet come to Tricorp with any plans.
However, he believes the opportunity for partnerships are endless.
Using the example of Vancouver 2010, he said the desire to benefit from the development happening so close to their homes inspired New Haven construction and the Squamish Nation to join together prior to Vancouver winning the bid.
The partners have completed two venues and are pursuing other contracts.
“They had the foresight to prepare themselves basically where everybody reaps the benefits,” he said.
Lantin, the former administrator of Old Massett, said his community was also only able to make progress on a number of infrastructure developments when the First Nation community teamed up with the municipality of Masset.
“It's a really powerful statement to show how people with common goals can come together and the kind of power that can have.”
The local Tricorp administers a number of different funds for status First Nations, Métis and Inuit residents in B.C.
Tricorp provides loans to 38 communities in the northwest and has contributed more than $25 million to the region during the last 15 years.