Tierless Commitment: A Lesson in Supplier Diversity
Kristin Malek reveals implicit value of CDW’s supplier diversity structure.
Thoreau said, “The question is not what you look at, but what you see.” CDW Global Director of Business Diversity Kristin Malek has been both a keen observer of and vital leader in meaningful supplier diversity for quite some time. According to CDW’s 2022 Economic Impact Report, the organization has supported more than $1.9 billion in wages, $830 million in additional tax revenue, $6.9 billion in production impact, and more than 32,000 jobs. A regular member of the Billion Dollar Roundtable, CDW prides itself on its tireless commitment to supplier diversity. Malek deserves considerable credit for leading that initiative. Yet, even after years of helping to define the field, Malek recently experienced a stunning revelatory moment.
“I was at a forum in New York City and a speaker said that Tier 2 should not continue to be looked at as a ‘secondary’ or ‘lesser’ thing. It never occurred to me that Tier 2 even had a negative connotation. At CDW, we’re Tier 2 all day and I never think of us as lesser anything. But then he went on to say that we should perceive Tier 2 as a means of access to capital. I had never thought of it that way before, but that really resonated, as that’s a key element of how we treat it at CDW.”
For small, diverse businesses, access to capital often means the difference between surviving and thriving. Through their supplier diversity and mentor-protégé programs, CDW has provided exceptional support in that regard for small, diverse business through their Tier 2 status. And that support has not gone unappreciated.
“Many people don’t really understand the dynamics of exactly what a Tier 2 is,” explains Tanaz Choudhury. In 1998, Choudhury founded TanChes Global Management, Inc., a highly successful certified, minority, woman-owned small business that provides full-service, certified IT solutions. Sharing Tier 1 and Tier 2 relationships with CDW, TanChes also participates in CDW’s mentor-protégé program. Choudhury reinforces Malek’s belief in the value of access to capital.
“If I’m Tier 1, my only access to capital is through my relationship with the distributor, which means I have only one line of credit. But if I’m in a Tier 2 relationship, I can request a credit line from the distributor and the reseller, which in my case was CDW. Of course, all parties have to agree to terms, but if I’m Tier 2 that makes greater access to capital possible. CDW has always been there for us by providing overlapping terms. Right now we have overlapping terms for a large governmental entity that was adamant about a Net 45 day payment cycle. For $10,000 that’s okay, but for a million dollars or more, my margins won’t cover. But with CDW’s overlapping terms, I can handle this business.”
Brothers Oscar and Juan Martinez share a similar experience. For more than 20 years, they have provided exemplary IT services including managed IT, cloud services, and cybersecurity to small and mid-sized businesses through their company Ozkar Services. They, too, participate in CDW’s Mentor-Protégé Program.
“As a small business, our value is us and we work 24/7,” explains Juan Martinez. “But fitting into a larger setting can be challenging for small, diverse firms. CDW helped us figure that out in many different ways, but it was access to capital that made a critical difference. We’re still waiting to get our Tier 2 agreement in place, but we have a Tier 1 agreement. And CDW opened an escrow account on our behalf so that we could transact business. If we didn’t have that, we wouldn’t be able to process our last order with a very large transit agency.”
Oscar Martinez echoes Choudhury’s point about payment terms. He reports that agencies often offer Net 60 to Net 120 day payment terms, something untenable for many small businesses. He adds that CDW also provides exposure to potential capital providers, as they meet with bankers to set up the escrow account agreement. He adds, “This escrow account has helped us dramatically. I don’t want to put CDW on a pedestal, but they’re doing far more than anyone else to help small firms.”
Maryann Pagano co-founded BlackHawk Data in early 2018. Today, her firm provides expertise in design, build, delivery and management for networking, collaboration, data center, security, wireless and IoT. Pagano credits CDW for its “great program for diverse Tier 2 suppliers” involving access to capital.
“Some organizations require onerous payment terms, like Net 60 or Net 90 days. CDW is good about knowing that they’re working with diverse partners who are sticking their necks out. They make sure we’re covered for that time period to make the deal work. They know we have the accounts payable and they have the accounts receivable and make sure we won’t have to wait 60 or 90 days. I’m blessed to have good credit terms now, but I didn’t in the beginning. And no one will give you $5 million if they don’t know you. CDW truly understands what a small business goes through. Many other companies do not.”
The question is not what you look at, but what you see. For small, diverse businesses, CDW and Malek not only look, but see what they need most.
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