How supplier diversity is driving innovation, especially for utilities
Diverse business entities (DBEs) offer unique solutions to the challenges facing utilities, leading to new services, products, and ideas for growth.
Now more than ever, customers and stakeholders are demanding that supply chains represent the communities they serve. Consumers are educated and aware of shifting landscapes in utilities and want these companies to support local, diverse suppliers. As a result, DBE programs are bringing new voices to the table—voices that offer fresh ideas with significant growth potential.
A Golden State of mind
With some of the highest DBE inclusion rates, California utilities are a model and leader for companies across the country. These utilities set the standard as to what’s acceptable. Goals may appear high, but when looking at the population demographics and the number of diverse business owners in each locality, they are quite attainable.
California utilities recognize the value of supplier diversity and the innovation and competitive advantage they bring to the marketplace. Because the population of the state is heavily diverse, the state requires its government, corporations, and utilities to operate with a supply chain that includes minorities, women, the LGBTQ community, veterans, people with disabilities, and economically disadvantaged groups.
However, diverse business entities still face hurdles in the Golden State, as they do elsewhere. When we look at the current environment of DBEs, two specific challenges surface.
The first is limited access to financial capital. This lack of access makes it difficult for diverse suppliers to properly fund the day-to-day operations of their companies. Limited capital prohibits companies from achieving sustainability and growth, while also stalling economic growth for local communities.
The next challenge is social capital. The small, diverse business owner is not typically included in industry business networks and does not have advisors available to help guide the growth and development of their company. Often, these entrepreneurs are not afforded introductions to key people who can help advance their business.
Thus, policies and programs incentivizing the inclusion of DBEs are essential to avoid perpetual “status quo” operations. Organizations without such initiatives miss out on the innovative concepts that DBEs are regularly producing.
An employee benefit program unlike any other
One recent example of DBE innovation is the Bring Your Bill to Work program or Baltimore Gas and Electric Company (BGE) customers.
Maryland Energy Advisors (MDEA), an independent energy procurement, efficiency, and marketing company, designed the Bring Your Bill to Work program to help BGE customers improve energy efficiency in their homes. MDEA partners with different corporations in the Baltimore area to provide employees with different sessions and “lunch and learn” events on reducing individual energy bills.
The purpose of the program is two-fold. First, it educates customers on how to read their bills. MDEA teaches participants the semantics and language on the bill. Next, MDEA shares tips and methods for cost savings opportunities, giving real examples of how customers can save on their bottom line.
The company has recently taken the project a step further by introducing available rebates and smart home incentive programs. Through working with MDEA, which qualifies as a DBE, BGE is effectively spreading the word about these programs while increasing energy efficiency in the communities it serves.
DBEs and the digital economy
The creativity of many diverse suppliers has made them a significant component of the global digital economy. This innovation fuels not only streamlined efficiencies, but also new opportunities for expansion. To compete in an increasingly digital world, DBEs are educating themselves and staying abreast of new technologies.
Our digital environment enables major companies to implement policies and programs that foster the utilization of diverse businesses, and this trend will only grow. As people continue to interact and connect online and through different technologies, the economic landscape changes—allowing diverse suppliers to showcase their competitive advantage.
Utilities are able to capitalize on this trend due to an increased number of DBEs in the marketplace, and thus support these innovative entities in return.
