We talk the role of procurement with CM Group Karen Hodson
Karen Hodson is the Chief Procurement Officer for the CM Group. The company brings together a diverse group of email marketing platforms, including Emma, Campaign Monitor, Delivra, Liveclicker, Sailthru, Selligent and Vuture under a single umbrella. She has been with the Company since its start in 2017 headquartered in Nashville, Tennessee.
Prior to her position with the CM Group she started off in software startups and worked her way up the procurement ladder. “During a previous position I had done a great job on a contract and the CFO at the time said, do you like negotiating? I said yes and his response was great you're in charge of procurement. At the time I didn’t even know what procurement was, but that’s how my career journey started,” explains Hodson.
“The start of my journey involved figuring out what procurement was and what it meant for an organisation. My next task was establishing how I could make an impact and create centralised procurement at the company I was working with at the time. Once I had that worked out, I moved on to another company.”
Hodson joined an organisation with a longer history to focus solely on procurement. This provided her with the opportunity to get a much better understanding of what procurement in a larger operation involved. Although she learned a lot from the company, she missed having more involvement in different areas of the organisation. “I kind of missed the crazy fast paced world of tech startups and wanted to go back to it. I like getting involved in tech startups and building procurement, policies, processes and procedures. I’ve done it four times now.”
Hodson has a really hands-on approach to procurement. She likes working with all the CM Group departments and has an understanding of all those back-office sort of functions that a lot of CPOs simply do not have the time to learn. She considers procurement to be a largely customer service-related role.
“I’m customer facing in the sense that my co-workers are my customers. The employees within the CM Group come to me about a wide range of issues; everything from buying laptops and keyboards to making sure we're buying the right software and services to help us run our business. I also deal externally with all the different vendors that we engage with daily.”
“I make sure that the relationship makes sense for both parties. We have multimillion dollar contracts, so it’s important to engage with the right vendors and really understand what the organisation needs to be able to run the business effectively.”
Centralised Purchasing System
She first joined the CM Group as it was being formed. “When I joined, we merged three companies together which was the beginning of the CM Group.”
Hodson identifies that it was necessary to establish a centralised purchasing system to avoid a situation where the marketing department buys their own software, and the sales department purchases their own software. “I wanted to avoid a situation where different departments are purchasing the same services, from the same vendors and with two contracts. That really doesn’t make sense to me. It was imperative to figure out first what made sense for the company and secondly how to implement it across the entirety of the organisation.” Hodson implemented Zip to manage the purchasing request process at CM Group.
Hodson is keen to speak further about a centralised system. “Having centralised procurement allows the organisation to get an overall broad view of what is happening on the purchasing side of the business. I facilitate different departments coming together to have a conversation. For example, sales may have a need and not realise that the marketing department has a tool in place already that the sales team can use. They may just utilise it differently, but in the long run they are after the same solution.”
“It’s my role to have these conversations and get everybody talking so that departments aren't just working in their siloed areas. This opens up the visibility on spend, and provides an understanding of what we're buying, by breaking down the silos and engaging other organisations to help us run our businesses while keeping every company involved safe.”
GDPR, California CCPA laws and Security
“It is important that procurement doesn’t just save dollars. Our job is also to reduce risk for the company and understand how we're exposing ourselves when we engage with other companies.”
“And even with the right vendors and consultants we must have the correct legal paperwork in place that says that all parties are going to keep the information confidential and if for whatever reason they decide to not keep the personal information confidential they are made aware of the repercussions.”
The CM Group is dedicated to being GDPR and CCPA compliant. “We are compliant as an organisation, but we also have to be able to make sure that the vendors we engage with are compliant with personal information. We also have to speak about security and understand the risks the engagement may bring to the organisation,” Hodson confirms.
“Security is obviously a major concern for any organisation. And a question I am often asked is how secure are the online SaaS type tools that we use? I work closely with the security team to ensure that the software we purchase is not too risky for the business. If you are not diligent with evaluating your purchase, then that's where it is possible for us as a company to open the CM Group up for issues from a security perspective.”
There is a lot more to the supplier ecosystem at the CM Group than simply spending money. Hodson is keen to discuss privacy compliance issues going forward and provides an evaluated vendor as an example. “I approached a new prospective vendor; it was a small organisation that didn't have the mechanisms in place to secure people's personal information that we wanted to share with them to deliver our orders. It’s not something that most of us think about when shopping on Amazon. We had no choice but to go with another company able to secure the information and comply with all GDPR and CCPA privacy regulations.”
The Renewals Process
Building new business relationships is clearly important to Hodson, but the focus doesn’t end there. She ensures that all vendors do what they agree to do and prefers to take a proactive approach rather than relying on an issue being flagged later on throughout the engagement process. “I have to rely a lot on our end users so I create relationships within each of our departments so I am aware of any issues that may arise from purchase engagement through to the renewals process.”
“One of the things I try to avoid is getting stuck in an auto renewal which is a nightmare for any procurement person.” Having a system like Zip helps the CM Group stay on top of upcoming renewals. “Receiving notifications reminding us that a contract is up for renewal in three months and sometimes as far as six months ahead makes sure that I don’t miss something. It gives me the time to reach out and have the correct conversations internally. Auto reminders are one of those amazing tools at my fingertips that keep everything flowing in the right direction. I rely heavily on them because it’s not always possible to remember all the details. I pride myself on remembering quite a lot, but not everything. This is where software, like Zip comes into play.”
“When it is renewal time the teams are encouraged to have discussions internally. We'll then sit down and go through all points raised by them. It’s a great opportunity to discuss any challenges; for example: Has the vendor been able to provide everything that they said they would provide? Has anything been lacking? And is the product still meeting our needs? A lot of factors come into play. If a vendor is unable to provide us what we are paying for then it’s a good time to consider new business relationships.”
Hodson is keen to discuss how human interaction and software tools work hand-in-hand to support the CM Group. To ensure that purchasing within the company is efficient all of the departments submit their request in Zip, CM Group also uses other SaaS tools to evaluate the purchasing landscape and complete the procure to pay process at the organisation. It’s important that each department answers standardised questions when submitting a request including how much it’s going to cost? How long are they going to require the item for? What department do they belong to? All of these questions need to be answered so the procurement team can assist with completing the purchase.
She is keen to highlight the ever-growing procurement departments popping up within organisations. “More organisations are understanding the value that centralised procurement can bring.” She believes that procurement is more than solely a money savings office. The department offers real time value across the company. “In the past, procurement was largely about checking boxes, processing papers and making sure that correct procedures were in place. These are a very important piece of the puzzle. But procurement brings a lot more to an organisation and people are beginning to understand the value that procurement can bring to a company by breaking down silos, reducing spend while reducing risk, increasing happiness across companies' customers, and the employees within an organisation.”
“I think the role of procurement is definitely expanding well beyond dollar savings. It’s also about how we make our employees happy, how we reduce risks and engage with the right vendors.”
