Guide for CPO's and Procurement to build strong working relationships with the CIO and technology teams.

1. © 2019 CDK Global, LLC / CDK Global is a registered trademark of CDK Global, LLC.
Transforming the Dynamics
Between Procurement and
IT Leadership
Mike Morsch | VP Global Procurement & Supply Chain
CDK Global
04.17.2019

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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
Who Am I?

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• 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
Who is CDK Global?

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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
What I am doing at CDK?

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A leading challenge for procurement
leadership is to realize benefits from
data analytics?
True or False

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• 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
The Challenge

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• 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….
C-Level Expectations

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Procurement Operating Model
Sourcing
Procurement
Ops and
Fulfillment
Vendor
Management
Strategic
Manage
Operations
My Focus Demand

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Big Three Programs to Procurement Excellence
Procurement Operating Model
• Model and org review
• Key areas of focus
• Strategic Sourcing
• Vendor Management
• Operations
• S&OP
• SC Visibility
• Training and development plans
Margin Transformation Procurement System
• Process and tech focus
• Take (SC Visibility)
• Wand (3rd party labor)
• Aspera (Assets)
• Zycus
• Strategic Sourcing
• Vendor Management
• eProcurement
• Analytics
• P2P
• Executed plan
• Work Streams support
• Savings $ Multi MM,
FY16 - FY19
• Targeted help: 3rd party advisors
Procurement Excellence
➢ These 3 programs were the primary focus
➢ Balanced execution drive you towards procurement excellence

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Once procurement implements the right
operating model and systems, they no
longer need to focus on managing
stakeholder and business expectations.
True or False

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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
Transformation Challenges

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• 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
Build The Relationship

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• Technology oriented
• Understand the business
• Teach procurement or…
Hire The Right People

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• Asset Management (ITAM) / Services Management (ITSM)
• Software Rationalization
• Support models
• True ups and maintenance renewals
• Compliance
• Escalations
Find The Collaboration Points

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Procurement should always wait to hear
from the business about their strategies
and then adapt to their direction.
True or False

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Technology Investment Council
What is it?
• CIO / CPO Sponsored
• Shared strategies
• Shared savings plans
• Shared investment plans
Who attends?
• Procurement Category leads
• Senior IT leadership
• Product leadership / Finance
Create the Collaboration Points
Benefits
• Savings maximized
• Cost effective architecture
• Finance validated

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Procurement Can Drive the Conversation
ERP Cloud Database
Vendor
Leverage
Unified
Communication

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• Supply chain visibility systems
• Temp labor managed service
• Asset management tools
• Modern sourcing, procure to pay systems
• Analytics are your best friend
Investment Back into Procurement

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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
Results / Lessons Learned

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• 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
Parting Thoughts

21. © 2019 CDK Global, LLC / CDK Global is a registered trademark of CDK Global, LLC.
Thank You
Questions? Mike.Morsch@cdk.com

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• 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
Appendix