Six Large Corporations Launch Portal to Cut Red Tape for Smaller Suppliers

Sept. 24, 2010
Small and mid-sized businesses face big challenges when competing for contracts with large corporations

Small and mid-sized businesses face big challenges when competing for contracts with large corporations. The paperwork required to qualify as an approved supplier can soak up huge chunks of employee time that must be replicated in different formats for each large potential customer. Recently six very large companies took notice of this problem and have stepped up to create a system that will help smaller companies compete for their business. At stake is an estimated $150 billion in supply contracts.

AT&T, Bank of America, Citigroup, IBM, Pfizer and UPS have all agreed to standardize and simplify the application process required for qualified small and mid-sized U.S. suppliers. The participating companies have established a free, public website to be named “Supplier Connection” at that will provide a single, streamlined electronic application form. Small vendors need only complete the application form once to potentially become suppliers to the participating companies. They will be able to more easily connect for opportunities to sell services, marketing, food, human resources and construction, among others.

The Supplier Connection site, which is expected to launch in the first quarter of 2011, will enable access by qualified firms to bid for opportunities where the participating companies conduct business, not only in U.S. markets, but potentially nearly 200 countries where the participating companies operate.

The site won’t be restricted to the six giants gathering to launch Supplier Connection. As the program advances, it’s expected that many large businesses will sign up and many small companies will benefit, the companies said in a joint release. The site will enable small suppliers to learn from, collaborate with and sell to each other so that they can become more competitive and successful. It will offer the participating companies a mechanism for sharing valuable business information with these prospective small- and mid-sized suppliers. Large companies will also have easier access to small, innovative companies that generate new products and services.

In a way, this is the kind of e-commerce application everyone seemed to hope for (or dread) during the early years of the dot-com bubble, when purchasing portals were all the rage. The sort of supply-chain streamlining Supplier Connection represents could lead the way to simplified qualification procedures for suppliers in other areas, such as efforts aimed at increased energy efficiency and sustainability from suppliers — the so-called “greening of the supply chain.”

“Everyone says that small business is the engine for economic growth. We believe opening up new markets for goods and services, in the billions of dollars spent by large companies can be the fuel that will allow those small businesses to grow,” said Stanley S. Litow, IBM vice president of Corporate Citizenship & Corporate Affairs, and president of IBM’s Foundation.