Change Please is an award-winning social enterprise in the UK that provides jobs for those experiencing homelessness. What started as a cafe with plans to open shops on every corner has pivoted to scale through partnerships. Now, business-to-business partnerships account for about 80% of its total revenue. While Change Please cafes still provide some of the best coffee – along with employment opportunities to sustainably lift people out of homelessness through a jobs first model – in the UK, the majority of Change Please coffee is purchased at grocery stores, events, conferences, and in the workplace. The rapid growth of Change Please, and its impact, was the result of strategic partnerships with other businesses.
According to Laura Neville, Global Responsible Sourcing Lead at Compass Group, this isn’t abnormal. Compass Group is the world’s largest food services organization, and a tier one supplier to many global brands. Nearly all food and beverage products first transfer hands, sometimes multiple times, through business-to-business partnerships in the supply chain. Indeed, over $13 Trillion USD is transacted annually through business-to-business sales before end consumers make the final purchase.
When a business requires a product or service from another business, it will go through what is called a “procurement” process. According to LinkedIn, there are over 418,00 procurement professionals. A study from Deloitte of 481 procurement leaders found that this relatively small group managed over $5 Trillion USD in budget.
If social enterprises want to sell to the private sector, they need to understand the procurement process (more on this in the section below). Not only will this help with sales, but as we see in the MovingWorlds S-GRID Program, the right partnerships also help social enterprises improve operational efficiency and social impact outcomes. To see a great example of a social enterprise partnership with the private sector facilitated by a tier one supplier, watch this recording of a live panel discussion featuring Change Please CEO and Founder Cemal Ezel, Compass Group’s Global Responsible Sourcing Lead Laura Neville, and SAP’s Procurement with Purpose Lead Kelvin Ward.
Background: Understanding Corporate Procurement
Gordon Donovan, a Supplier Diversity Research Fellow at SAP, explained that “procurement is the word that companies use to explain how they obtain goods and/or services ”. The procurement process helps nearly every organization spend money and obtain inputs. Marketers work with procurement to find ad space. Manufacturing uses Procurement to find suppliers and contract workers. Shipping gets help from Procurement to find packaging and distributors. Finance uses Procurement for payroll and tax providers. Operations uses Procurement for machines. IT uses Procurement for computers and computing services. Formal or informal, every company goes through the act of “procurement”.
In another S-GRID event, SAP procurement leaders Kristen Jordeth and Tristan Haberley explained that procurement teams are typically responsible for four main things:
- Sourcing and contracting
- Planning and forecasting spend
- Buying and delivering for the business
- Invoicing and payments
Simply stated, procurement does a lot more than just search for and source suppliers, distributors, and other service and product providers — procurement has a central role nearly every transaction a business makes with other businesses.
In his research at SAP, Gordon has learned that almost 50% of procurement leaders are planning to increase the diversity of their product and service providers, and that 75% of procurement purchase decisions are being influenced by corporate social responsibility priorities within the company. Sustainability, justice, and equity are more important than ever before, and procurement professionals are actively on the search for more social enterprises to integrate into their value chains. As an example, SAP’s commitment to spend 5% of its budget with social enterprises and another 5% with underrepresented businesses by 2025 means that procurement will have to find the suppliers to fulfill this. PepsiCo’s “performance with purpose” commitment means its procurement teams are now responsible for helping achieve these CSR targets.
As a social enterprise, this means that if you can find the right procurement professional within a company to act as your champion, then you will be able to identify new opportunities to help the company advance its sustainability goals while growing your own revenue in the process.
Learn more about procurement by watching this S-GRID webinar featuring Gordon Donovan: Understanding Corporate Procurement – What it is and How it Works:
How Social Enterprises Can Find Partnership Opportunities With Corporate Procurement Teams
To help with procurement, most businesses use procurement software, and the leading procurement platform in the world is called SAP Ariba. Kristen Jordeth likens Ariba to a LinkedIn for business-to-business transactions with some robust contracting and accounting tools, too. According to Tristan Haberley of SAP, the SAP Ariba platform alone processes $3.75 trillion USD in annual commerce transactions between businesses. The majority of the biggest businesses in the world use SAP Ariba, as well as many of the smaller ones: over 5.3 million companies to be exact. So if you want to find new business opportunities, including live projects currently seeking bids, then you want to be on Ariba – and for social enterprises, Ariba is free to use, along with its premium Discovery platform
Learn more about Ariba and how to create a profile on the platform by watching this recording of a webinar featuring Kristen and Tristan:
As an S-GRID member, make sure to add “MV2020” as a keyword to your company profile in the “Keywords” section:
For more guidance on using Ariba, including a demo of Ariba, review the slides presented on the aforementioned webinar here:
6 Tips for Social Enterprises to Build Partnerships with Procurement Teams
During the first webinar references above, SAP’s Procurement with Purpose Lead Kelvin Ward shared that “Increasingly, large corporations want to do good and support social enterprises. Procurement leaders in companies are invested in finding the right social enterprise partners, but it also means that social enterprises need to come with the right solution, value proposition, and systems to do business with us.” In each of the S-GRID webinars above, we asked our speakers to share tips on what social enterprises can do to increase their chances of being discovered and earning new partnerships ideas, which are highlighted in these six tips below:
#1: Build your network
It takes time to find the right corporate partner. Network by attending conferences, connecting with people on LinkedIn, joining online and in-person communities, and adding value to your network and peers so that both parties learn from each other their capabilities. Remember, now is not the time to sell. It is most important at this stage to learn and help others learn.
#2: Find the right person within the company
You will most likely be turned away or be ignored by some of the people you reach out to. That’s OK. Take the time to understand the company, and the different people within it. As we shared in an earlier blog post and webinar with Microsoft about building partnerships with the corporate-sector, you want to lead your networking NOT with a sales pitch of your solution, but rather by building trust that you are trying to solve a problem that another person is also encountering.
#3: Understand procurement professionals and the core needs they have
Once you find a procurement professional willing to spend time with you, take the time to understand their needs. Which business units do they support? What are they looking for? What are their goals and motivations? Who else is on their team? What is the corporate social responsibility priority of their company and unit? What are the biggest challenges or barriers they are facing at the moment?
#4: Customize your pitch
Once you understand the procurement partner/lead within the company, take the time to customize your pitch (for tips, check out this earlier blog post featuring Desolenator). Keep in mind that some procurement professionals are always looking for exciting ideas to bring to internal stakeholders, while others are only looking for proposals for specific calls. Once you understand what the corporation is trying to achieve through a potential partnership, make sure you position your social enterprise as driving THAT issue forward in a new or better way. This isn’t the same thing as your mission statement or general value proposition; it’s an adaptation of those things that gets to the real business value from the corporation’s point of view. Frame your offering into what the funder is trying to ‘buy.’
#5: Craft a great proposal
According to Gordon, there are six common mistakes he finds in proposals:
- Poor structure/organization: Proposals contain a lot of information, and it’s up to you to structure your proposal in a way that it’s easy to find and follow your key points.
- Superfluous sales pitches: Some proposals focus too much on trying to sell, using fancy words and bold claims. Stick to the requirements of the proposal. Less is more, and authenticity goes further than slickness.
- Incomplete: Procurement bids require specific information. Some companies won’t even review incomplete proposals, and putting in the time to complete your proposal communicates to the company that you’re serious about the bid.
- Late: Procurement leads have to make a decision by a specific time. If a proposal is not on time, they are not able to adhere to their schedules.
- Generic, without customization: When reviewing a lot of proposals from similar vendors, procurement leads are waiting to be ‘wowed’. It’s easy to tell when you’ve sent a generic proposal out to multiple organizations, so take the time to customize your pitch to the clients’ specific business needs.
- Difficult to understand: Oftentimes, vendors use buzzwords, industry terms, or other insider terminology that procurement leads won’t know (or is unnecessary). The clearer you can be, the more likely your message will come across.
While it is time-consuming, when you submit a proposal, make sure to avoid these common pitfalls and deliver an on-time, on-budget proposal that directly addresses the request and answers ALL of the required questions.
#6: Keep trying
You’re not likely to win your first proposal, and perhaps not even your third. It takes time, so keep asking for feedback and investing in improving your pitches. Where possible, try to get feedback on what could be improved even when your pitch is not selected.
Procurement within companies is new to many social enterprises, but understanding how procurement teams operate will give your organization a running start in identifying new business opportunities that can help you grow, make a bigger impact, and employ more people in world-positive jobs.