Digital Technologies are Changing Procurement Leaders and the Organizations They Serve
Mike Morsch, CIAP, is the Vice President of Procurement and Supply Chain at CDK Global and a member of the SIG Advisory Board. From starting his career as a software developer, Mike worked his way up through IT organizations to hone the craft of IT and created the procurement function at CDK Global. After spending years working alongside the procurement organization in previous positions, he now leads a world-class procurement team and brings his unique insight to the procurement role. Leading CDK Global's digital transformation and championing RPA implementation within CDK, Mike is passionate about leading the sourcing and supply chain into the next generation of technology. Mike’s message is clear: CPOs need to be technology evangelists to succeed today.
Below is an excerpt of an interview with SIG CEO and President Dawn Tiura. It has been edited for brevity. Listen to the full episode from The Sourcing Industry Landscape podcast.
How Procurement Impacts the Organization
At CDK, we've really focused on some of the changes needed to improve our customer support and experience. It's been a tremendous digital transformation with regard to what CDK does for our customers, but very importantly, what we are doing within the procurement and the supply chain team to help the business be more successful, take costs out, improve on-time delivery and then pick up some additional responsibilities as we've gone along the way.
I've also picked up our global real estate function as well as our repair operation. I kind of keep adding the operations activities to what I do here at CDK. It's been very fast paced and exciting.
The Transition from CIO to CPO
It was pretty natural for me to come here and do this primarily because CDK at its heart is a software company, but we are specialized in the automotive dealership industry. CDK makes software and other technologies that help car dealerships run more successfully. Think of it as ERP or CRM systems.
I will tell you, coming in, of course when I was in the technology organization at times you were trying to move as quick as you could and you might feel like the procurement organization was kind of holding you back. But coming in now and having the responsibility for procurement, I have a whole new appreciation for the really great practices that procurement brings to the company and how it's really not just really a cost-focused area, which might have been my cynical view a dozen years ago. Now it's become a value-added function for the company. I would say it wasn't a hard transition. It hasn't been easy, but it's been very exciting, and I've learned a lot along the way.
I actually was responsible for helping to create and run the IT procurement function at Motorola, which is very similar in a lot of ways when you look at the IT technologies that we consume here as a company: hardware, software and third-party labor services associated to technology. I had all those things on my resume and my background. So, coming into here, I did need to learn a little bit more about true procurement best practices and those type of things, but I had spent a lot of years working with the procurement teams at my previous companies and really understanding what they did.
My advice to CPOs without a technology background is this: A procurement leader needs to be a technology leader going forward. We can no longer just look to the IT team or the CTO organization to provide us the technology. We need to partner with them and looking forward to how we're going to apply these technologies. We've done that within CDK.
If you're not looking at how you're going to take the technology and apply it and make your group more successful, get better analytics, apply robotic process automation, you're going to get left behind, your organization's going to get left behind, and you're going to leave a lot of savings and insights and ability to help the business be successful on the table that no one will even know about, and you'd probably put your job in danger too.
I think it's critical that you embrace the technologies. They all don't work. They all have a challenge. But the technology will continue to help everyone be more successful and you need to have a foot in there, a toe in the water and really jump in and figure out how you're going to apply the technology to be successful.
Embracing AI and RPA Technologies
I think there's just so many things that CPOs and other procurement and supply chain leadership can do to embrace these technologies. Everyone is going to sub-optimize their organization unless they really start embracing this. It's not that RPA and artificial intelligence and other things will eliminate jobs; I'm a huge believer in the fact that they're going to augment the jobs and make everybody much more successful and create new jobs that no one even knew existed before.
I'm a big believer that as you continue to apply the tech, and you continue to apply really good procurement practices, you've got to have those basic skills and abilities to be successful, and you'll make your company more successful.
The Future of Procurement
The focus of where I want to take the organization is really moving forward on the rest of that digital transformation. I'm still excited to be involved in the RPA activities, but I think there's a lot of very interesting technologies out there that are going to help the best and brightest on my team get insights on what they need to do next, whether it's a negotiation, or a new supplier, or some analytics around our internal data compared to external data that will help give them insights that are going to come right to their desktop every day.
Really good category strategy people and people in procurement can all sit down and go out and do a lot of research and go figure these things out, but I think the artificial intelligence and some of these robotics things are going to help bring that information right to their desktop so they can start lining those up and start pursuing those.