Transforming the Dynamics
Between Procurement and
IT Leadership
Mike Morsch | VP Global Procurement & Supply Chain
CDK Global
04.17.2019
© 2019 CDK Global, LLC / CDK Global is a registered trademark of CDK Global, LLC.
Who Am I?
CDK Global, Vice President of Global Procurement and Supply Chain
• Lead procurement and supply chain programs
• Lead business transformation, providing strategic benefit in cost, quality,
responsiveness and continuity.
Ipsos, Vice President IT for North America, (top-three global market research
company)
• Responsible for IT services
Motorola, variety of senior technology leadership roles, including:
• Global supply chain systems, IT/technical strategy, IT procurement, business
relationship management, portfolio and program management, application
systems development
2
Who is CDK Global?
• Leading global provider of integrated IT
and digital marketing solutions
• Automotive retail and adjacent industries
• Automotive dealer solutions in 100 countries
• 30,000 automotive retail locations and most
manufacturers
• More than $2 billion in annual revenues
3
What I am doing at CDK?
Joined CDK shortly before its spin-off from ADP and implemented new
operating model and global sourcing structure that provides:
• Significant margin improvements
• Strategic sourcing strategies and process simplification
• Significant investment in procurement systems
• Featured in Supply Chain World Magazine
For business transformation program, executive sponsor for:
• Implementing Robotic Process Automation
• Leveraging Global Insource Centers
4
A leading challenge for procurement
leadership is to realize benefits from
data analytics?
True or False
5
The Challenge
• Technology investments drive innovation in all companies today
• Cost optimization can make or break investment effectiveness
• Procurement and IT often can be at odds in the investment process
• Role confusion (IT negotiated, business negotiated, not negotiated!)
• Value gets lost, innovation gets delayed and careers are damaged
6
C-Level Expectations
• Provide new capabilities for customers and employees
• Reduce business cost run rates
• Five Nines availability, no less
• Acquire hot new tech at flea market prices…because…
• ….Everyone knows technology is too expensive….
7
Procurement Operating Model
My Focus
Demand
Strategic
Sourcing
Operations
Procurement
Ops and
Fulfillment
Vendor
Management
Manage
8
Big Three Programs to Procurement Excellence
Procurement Excellence
Margin Transformation
Procurement Operating Model
Procurement System
• Executed plan
• Work Streams support
• Savings $ Multi MM,
FY16 - FY19
• Targeted help: 3rd party advisors
• Model and org review
• Key areas of focus
• Strategic Sourcing
• Vendor Management
• Operations
• S&OP
• SC Visibility
• Training and development plans
•
•
•
•
•
Process and tech focus
Take (SC Visibility)
Wand (3rd party labor)
Aspera (Assets)
Zycus
• Strategic Sourcing
• Vendor Management
• eProcurement
• Analytics
• P2P
➢ These 3 programs were the primary focus
➢ Balanced execution drive you towards procurement excellence
9
Once procurement implements the right
operating model and systems, they no
longer need to focus on managing
stakeholder and business expectations.
True or False
10
Transformation Challenges
Roadblocks
• Rogue purchases
• Late to the game (last to know, IT may be second to last)
• “We” (IT, CTO, low-level developer) are the experts
• CEO says … (Substitute your favorite VP…)
• Slow procurement process
• Procurement staff are penny pinching SOBs
Real Needs
• Common strategies
• Common and understood approach
• Planning and more planning
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Build The Relationship
• Don’t be an order taker
• Don’t hide your technical knowledge
• Take every opportunity
• Get invited – Staff meetings, vendor
visits, “drive by’s”
• Don’t be the “procurement
person” in the room
• Bring value
12
Hire The Right People
• Technology oriented
• Understand the business
• Teach procurement or…
13
Find The Collaboration Points
• Asset Management (ITAM) / Services Management (ITSM)
• Software Rationalization
• Support models
• True ups and maintenance renewals
• Compliance
• Escalations
14
Procurement should always wait to hear
from the business about their strategies
and then adapt to their direction.
True or False
15
Create the Collaboration Points
Technology Investment Council
What is it?
Benefits
• CIO / CPO Sponsored
• Savings maximized
• Shared strategies
• Cost effective architecture
• Shared savings plans
• Finance validated
• Shared investment plans
Who attends?
• Procurement Category leads
• Senior IT leadership
• Product leadership / Finance
16
Procurement Can Drive the Conversation
ERP
Cloud
Vendor
Leverage
Database
Unified
Communication
17
Investment Back into Procurement
• Supply chain visibility systems
• Temp labor managed service
• Asset management tools
• Modern sourcing, procure to pay systems
• Analytics are your best friend
18
Results / Lessons Learned
Results
• Cost savings
• Common technology and sourcing strategy
• Common vendor engagement
• Perception moved further than reality
Lessons Learned
• Hire tech savvy
• Reach across the aisle
• Speed and results comes from early involvement
19
Parting Thoughts
• Procurement leaders are technology leaders
• AI, machine learning, digital transformation
may have a bigger impact on procurement
than any other function
• Relationship with CIO / CTO needs to be
strong
20
Thank You
Questions? Mike.Morsch@cdk.com
© 2019 CDK Global, LLC / CDK Global is a registered trademark of CDK Global, LLC.
Appendix
• SIG podcast: The Ideal Leader with Mike Morsch
• Transforming Fulfillment for Better Customer Outcomes
• Building Procurement Capabilities after a Corporate Spinoff
• Transforming the Dynamics between Procurement and Technology Leadership
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