231: Building Procurement Capabilities After a Corporate Spin-Off

Today on the show I am joined by Mike Morsch. Mike is the Vice President of Global Procurement and Supply Chain at CDK Global.

Mike shares more about CDK in our interview, but to give you some context, CDK Global is a $2B+ revenue company that provides technology and digital marketing solutions to the automotive dealership industry. They were formally the Dealer Services division of ADP before being spun off into an independent company back in 2014.

In today’s conversation, we discuss Mike, and CDK’s journey to transform procurement within CDK after the spin-off.

As is often the case after a spin-off like this, the new company - in this case CDK Global - has to rebuild a large part of its organization from the ground up. Either the infrastructure that comes over from the former parent company is not suited for a smaller company that the spun-off entity now is, or there is no infrastructure that comes across at all!

I question Mike about the three phases of transformation that typically occur in a situation like this: steadying the ship post the spin-out, rebuilding capabilities and more fundamental technical infrastructure, and then looking forward to bringing in new technology to evolve the procurement value proposition.

As you will hear, Mike has deep IT experience outside of procurement, and so I wanted to tap into this to understand how he looks at technology and developing a business case for investments in technology.