AT&T is eager to increase its supplier spend with diverse and women-owned businesses, but to do so, it would also like to see more women move out of commodity technology and into the areas where AT&T often struggles to find any supplier at all.
AT&T has had a supplier diversity program in place since 1967 as the company sees working with diverse suppliers as a way to better serve its diverse end-customer base. As of 2015, it spent $13.7 billion, or 24% of its total supplier spend, with certified diverse suppliers. Five percent of that spend went to women-owned businesses. AT&T hasn't released its 2016 supplier spend yet, but its merger with DirecTV saw its supplier pool widen significantly and likely diluted its diversity numbers. The carrier now works with more than 20,000 suppliers. (See AT&T Boasts 2-Year, $40B+ Spend .)
Rachel Kutz, AT&T Inc. (NYSE: T)'s vice president of supplier diversity, tells Light Reading that it's getting easier to find women-owned businesses than it was in the past by actively working with female-focused national business councils like WBENC, Women Presidents' Organization and Women's Business Council Southwest, but there still aren't enough to choose from. To be considered diverse, suppliers must be 51% owned, operated and controlled by a minority, woman, disabled veteran or LBGTQ individual and be certified by an organization like WBENC or the National Minority Supplier Diversity Council.
Of those businesses that do exist and are certified, Kutz says that they tend to be clustered in certain commodity technology areas, such as IT, logistics, construction, advertising and marketing. With AT&T's move to virtualization and software-defined networking, finding suppliers that meet its evolving needs is hard, in general. Finding minority and women-owned business suppliers is even harder. (See AT&T Releases 2015 Diversity & Inclusion Report.)
"I think the greatest challenge for me on the AT&T side is finding women-owned businesses and wanting to see more, quite honestly -- and more that can do more things," Kutz says. "We tend to get a lot of diverse suppliers in general who tend to flock to the same type of support of service, so having businesses and developing businesses in different spaces and the spaces we're growing into is a tremendous opportunity for us."
While it's a challenge for AT&T to find suppliers, Kutz sees it as an opportunity for the women-owned businesses that are out there. Those that understand the landscape and evolution of AT&T's network and that can adapt their offering accordingly have a better shot at finding new business with the carrier. She declined to say which specific technologies AT&T is seeking suppliers for currently, but noted that AT&T wants "disruptive suppliers in the technology space that can drive innovation and the best cost structure."
To catch AT&T's attention, however, these suppliers will also have to capture the interest of AT&T's biggest existing suppliers. AT&T does most of its business with a few big names like Ericsson AB (Nasdaq: ERIC), Cisco Systems Inc. (Nasdaq: CSCO) and Qualcomm Inc. (Nasdaq: QCOM). Diverse suppliers, who tend to be smaller, have the best shot of working with the carrier by partnering with these tier-one, or prime, suppliers. Kutz says AT&T's overall diversity spend goals are made up of tier-one and tier-two diverse suppliers, but it achieves diversity primarily through the two working together. (See Vendor Selection Survey: New Criteria for the New IP Era.)
"Part of doing business with AT&T is challenging, especially for minority-owned businesses, because we are so large and a business really needs that size and scale to work with us," she says. "Sometimes these businesses just aren't going to have that. We have to work with these prime suppliers and companies that are as big as us, then if we can drive the work they do into the tier-two space, those tier-two suppliers not only get business, but they understand what it takes to be a prime supplier for AT&T."
— Sarah Thomas, , Director, Women in Comms