Supplier Connection: Will It Really Help Small Businesses Get Corporate Contracts?

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IBM and several other large corporations have launched a directory where small businesses can get listed to do business with large corporations.

Called the Supplier Connection, the site is open to U.S. small businesses.

If you are wondering what “small” means, it means your business has to have less than $50 Million in revenues or fewer than 500 employees.  You have to provide products or services in chemicals, construction, consulting, financial services, auto parts, HR services, information technology, marketing communications, market research, printing, software or security (for the full list, see the Supplier Connection website).

Some of the large corporations that are involved along with IBM include JP Morgan Chase, Kellogg’s,  Pfizer, Caterpillar, Citi,  JohnDeere, AMD and Facebook.  The U.S. Small Business Administration has also gotten behind it.

But Is It Realistic for Small Businesses?

When I first heard about this from Laurie McCabe’s site, I thought it was a great idea. I was excited and decided to try it out.

What I discovered is that the paperwork and requirements are daunting.

First, let’s talk about the paperwork.  Bureaucracy is a huge barrier to growth for small businesses — even the perception of heavy bureaucracy is a barrier.  According to the Wall Street Journal, one business owner reported that completing a Supplier Profile is “not a one-hour routine” but takes commitment.

Most small businesses don’t have anything near the 500-employee limit for this program — instead, think 5 employees.  That is a much more common size for a small business.  In a 5-employee small business, there’s rarely anyone you can assign who will have all the knowledge to complete the paperwork.  The business owner will likely be handling the paperwork himself or herself, probably in the evening (since that’s the only time available).

Beyond the paperwork is the whole issue of whether you can meet the system’s mandatory requirements.  I started filling out the application and managed to get through the first four steps out of 9, in 20 minutes.  ”Hmm, that’s not so bad,” I thought.

Then I got to step 5, the Environment section. It stopped me cold.  For instance, how many of you could say “yes” to the following?

  • Does your company have a Corporate Responsibility and Environmental Management System, which measures performance, sets goals, and discloses results?
  • Does your company define, deploy, and sustain your corporate responsibility and environmental management system through your engagement with your suppliers?
  • Does your company cascade this set of requirements to your suppliers who perform work that is material to the products, parts and/or services being supplied to your customer?

In all, there were over 20 questions about environmental, ISO9001 and ISO14001 compliance — 16 of them required fields to answer.

Very few small businesses with under say, 20 employees, could say yes to the above questions.  And what if you answer “no”?  Well, you are required to specify the exact day, month and year when you plan to be in compliance.

In our business we  have no plans to create environmental policies and systems.  Being an Internet publisher we shut off lights when we don’t need them, recycle paper and soda cans, avoid printing emails and documents unless absolutely necessary, and use power management options on our computers and other equipment.  But we do not write corporate policies about those actions — we just do them.

Our suppliers (other small businesses and entrepreneurs) would laugh — or cry — if we asked them if they complied.   There’s no way that even if we wrote policies and systems, that we  could “cascade” that requirement to our suppliers.

So that was the end of my attempt to complete the application.  I gave up.

Some Bright Spots

On the other hand, I do see positives with this program:

  • For those who go through the paperwork process, it is something that can give your business a competitive edge.  Just think of all those who will give up or can’t meet the requirements.
  • Another positive:  you can start the application process and save it as a draft, and finish or edit it later.  That way you can divide up the work and spread it out over a few days if you need to.
  • Finally, there’s just the fact that this directory exists.  IBM is to be commended for starting it.  In concept it’s a great idea.

I urge IBM and all the other corporations involved to streamline the requirements to make them more realistic for small businesses.  Otherwise, the Supplier Connection will be more about medium size businesses.  And I’d love nothing more than to come back and update you that the application has been streamlined.

7 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

7 Reactions

  1. Unfortunately this is often the case with good ideas; they get botched in the implementation. If the government and bigger businesses are serious about working with true small businesses they’ve got to realize how constrained those businesses already are with providing stellar customer service and great products. They don’t have time for red tape or jumping through bureaucratic hoops.

  2. Anita, I understand your concerns with the application process and agree that perhaps it should be made more streamlined for very small businesses, but as I am sure you know, the term “small business” covers a wide range of sizes. Many 5-person companies might laugh when a company with sales of $20 million and 100 employees calls itself a small business, but in today’s national and global economy, it is a small business.

    From a practical standpoint, the small companies likely to receive the most business from something like the supplier connection are the companies that are on the large end of the small business spectrum. Even if companies like IBM, Pfizer, or Caterpillar attempt to shift business to small firms, are they likely to order chemicals or printing from a 5-person firm? And, if they are dealing with small businesses with 100 employees, it seems reasonable to expect that those companies will comply, at some level, with some of the environmental policies that are listed in the application.

    • Anita Campbell

      Hi David, I see your point. I would like to see a “relevancy algorithm” put into place. What I mean by that is, if you are in an environmentally sensitive business that deals with chemicals or has waste water runoff issues, or hazardous materials to dispose of, etc. — then those higher requirements kick in.

      But a significant number of the categories would have no more environmental impact than a typical office tenant — such as consulting, IT services, marketing communications, market research, HR services, and the like. Why should businesses that aren’t involved in chemicals have to comply with heightened environmental requirements? The SC could easily limit those requirements to “high risk” industries, by NAICS code.

      Also, if it is unlikely that one of those corporate giants is going to hire a 5-employee small business, then that’s perfectly fine. I have no problem with that. But — in that case, this is really not a “small business” program.

      - Anita

  3. Martin Lindeskog

    Why can’t big business adhere to the sound principles of a free market, instead of creating a myriad of red tape?

  4. Their application is expansive and does not accept valid dates of establishment. The information is extremely intrusive and convoluted. I dropped the application process because it tells me that my dates of establishment are not correct and will not allow continuation.

  5. I think it is a great idea to connect domestic small businesses with Fortune names for boosting the US economy. I really appreciate the effort the IBM team put in work. However, as a small business owner, I have found the site very complicated to sign up and connect with companies. It requires too much work. I am not a computer savvy person and they need me to upload some formal documents and such. When I especially compare the site with Linkedin.com, Alibaba.com, Globial.com like business networking sites, it seems to me that IBM team needs to reorganize the process and make it simpler for us. Look forward to it!

  6. I have been literally on hold for 1hr waiting to speak with a customer service rep. I HATE POOR CUSTOMER SERVICE MORE THAN ANYTHING!!!!!!!! I get the recording every 30 seconds that says I am the 1st in the Que. This group is not worth the trouble of registering with if they cant even answer the phone for customers. It appears that this company had a good idea but is unable to really do anything for the members. I say It is a big waste of time judging from the comments above and here it is over a year later. I wont even begin the registration process. Citibank recommended the organization in order to avoid filling out their supplier form and registration.

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