Karen Hodson: Why Procurement Is More Than Just Checking Boxes

For Karen Hodson at CM Group, she’s made it her mission to give Procurement a better reputation. From a gatekeeper to a leader focused on relationship building and collaboration.  In this episode, Karen delves into her unique approach to Procurement, from the everyday focus of relationship building to her strategic thought process around M&A.

Episode Summary

In the past, Procurement has been seen as a gatekeeper to purchasing throughout an organization. Making sure all the boxes are checked. And a hoop to jump through to get the tools you need to do your job quickly.

Karen Hodson, the Chief Procurement & Real Estate Officer at CM Group, thinks it’s time to change that reputation for the better.

“We’re really the glue in the company that brings all the other departments together. And making sure that there’s clarity from the overall company strategy across these departments and getting those involved that need to be involved.”

This becomes even more important when you consider CM Group has acquired nine companies in the past few years. The key? Positioning Procurement as a true business partner by having conversations with key stakeholders.

“The more you have conversations with the individuals behind the scenes, get their involvement and appreciate their input,” said Hodson, “That’s where you’re going to be successful.”

Guest Spotlight

Name: Karen Hodson
What she does: Chief Procurement & Real Estate Officer
Connect with Karen online:  LinkedIn

Episode Highlights

Procurement is the Glue of Your Company

“We’re really the glue in the company that brings all the other departments together. And making sure that there’s some clarity from the overall company strategy across these departments and getting those involved that need to be involved. So, maybe marketing needs to be buying a SaaS tool, but in that evaluation and in that purchase, well, legal needs to make sure they’re good with it, right? Security, privacy, finance. We help usher everyone through the review and approval of those things. And different departments will own it. Many companies try to saddle IT ops with SaaS tools and running them and owning them, which really doesn’t make sense. They really should be a partner in managing those tools with the department that has a need for it.”

Understand the Purchasing Landscape by Having Proactive Conversations with Each Department

“We will sit typically on a monthly basis and evaluate what’s coming up in the next 30, 60, 90 days. Potentially longer, depending on the tool, right? It’s about being proactive versus reactive. And the only way to be proactive is to have conversations with those that are buying these tools or wanting these tools, to understand their needs. Well, are they happy with them? Is it giving them what they expected? Is the vendor holding up their end of the bargain with regard to the contract? So, procurement has those conversations to really understand, ‘Okay, will we need to expand use, we need to reduce use? Oh, you know what? We’ve had conversations with other departments and they started talking about having a particular need for a tool that another department is already buying. Let’s pool them together.’ There’s a lot of discussions with each department and because of that, we have this overall view of what everybody is buying.”

Every M&A Software Integration is Different

“It’s still unique every time. You may have some core items, and those core items are really evaluating like, ‘All right, give me that list, let me know everything that you buy, every vendor you engage with.’ Which can be extremely daunting, right? And a lot of times you’re going to be like, ‘Let’s take the highest spend and work our way down and take a look at that.’ Because we’re a software company, we use software to run our business, the number one thing I look at is the software purchases.”

The Dollars Speak Volumes

I utilize Zylo. It is the number one thing that I work with when we’re doing the M&A activity is utilizing this tool to pull the data from their finance teams. We already have our information there. So, we’re pulling it from their finance teams, their expense tools, to know, what does this world look like? Right? And then I think second to that is then trying to track down the contracts. And sometimes that can be a hot mess, right? It’s living in somebody’s emails, maybe it’s in a shared drive somewhere. If you’re lucky, then you can go a place to find those things. So, really, dollars is where it speaks. So, Zylo pulls the actual spend and who is that spend going to?” 

Mergers are an Opportunity for Procurement Innovation

“We have, I think, a very robust approval process and evaluation process when we’re engaging with vendors. Not all companies have that. So, it’s saying, ‘What do you guys do?’ Maybe they have portions of what we do, and see what it is. And sometimes it’s pleasant to see, ‘Wow, you are really good at this piece. We like how you’re doing that. We’re going to modify the way we do that portion of procurement to pull in what you’ve been doing that’s been super successful and that looks great.’ So, our way isn’t the highway. Right? It is going, ‘Hey, what do you do? What do we do? Who does it most effectively?’ And sometimes we’ll be like, ‘You know what? Neither one of us does this great. How can we improve it as a team?’”

Building Relationships is Key to Success

“It’s really always about conversations. Even when we’re just working with the vendor and we’re not dealing with M&A, it’s about conversations. Having a relationship with the vendor. Having a relationship with the departments that are utilizing that tool or that vendor. It’s all about the conversation. So, when you go into an M&A, and you’re pulling these organizations together, I talk about reaching out and asking, ‘How are you guys doing this? Hey, finance team, how do you handle it?’ The more you have conversations with the individuals behind the scenes that are dealing with this and that have been running it for a while, and get their involvement and appreciate their input, that’s where you’re going to be successful.”

Procurement Gets More Than a Seat at the Table, They Create It

“I want to make sure that we have that relationship to understand and we become strategic. We are seen differently. We’re not transactional. We have those relations where people now seek us out, right? We’re always trying to seek them out. Somebody I was on another call with had a brilliant saying and I thought it was wonderful. Everybody’s talking about procurement trying to get a seat at the table. Well, what they said is, ‘Why not create the table?’ It was just one conversation I had with somebody that has stuck with me. And that is really what we’ve been doing is, we have created the table and we are inviting the different departments to our table… I think longer term, I would like it to be people going, ‘When are we going to meet? I want to talk procurement. I just got hired. I want to know about procurement, because so many different people talk about it. ‘Oh, they’re great partners.’”

Top Quotes

5:45 – “That’s the role of procurement. We’re the glue in the company that brings all the other departments together.”

22:02 – “The worst thing you can do is say, ‘This is how we do it. You gotta do it like us.’”

27:42 – “I force people to really look at what they’re buying, because I have data to back up my skepticism or my questions or my concerns.”

28:01 – “We can all be transactional. That’s boring.” 

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