Modern Procurement with Matt Mehler

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Welcome to the did you know Podcast by Varisource, where we interview founders and executives at amazing technology companies that can help your business save time and money and grow. Especially bring awareness to smarter, better, faster solutions that can transform your business. 1.4s Hello, everyone. This is Victor with varisource. Welcome to another episode of the Digital podcast. Today, I'm excited to have Matt Mehler, who is the CEO and founder of Procurement Solutions, as part of our Modern Procurement series. Procurement Solutions is a consulting firm that specializes in commercial, residential, real estate and venue management industries that helps you reduce operating costs and maximize value from your suppliers. Welcome to the show,

Matt. Thanks for having me, Victor.

Yeah, so, one of the first. 1.8s Things that connected you. And I was the fact that I'm a big basketball fan, NBA fan, love playing, watching, and you were previously at madison square garden. And I was like, boom. There was just some interest ready that connected us. And obviously you have an amazing background and you decided to become an entrepreneur. So going to have tons of amazing questions. But if you don't mind, maybe give the audience a little background about yourself and how would you end up where you are now?

Sure. Thanks again. And it's funny that that always shows up on the resume. And then frankly, the reason I joined there was for the same as a sports guy myself, to do the procurement function and have that background, to be able to apply it in sports entertainment was phenomenal. But really taking a step back. I'm from Pittsburgh, Pennsylvania. That journey started. The passion of soccer really led me to ducane university and introduced me to supply chain management. And that's really where I found the passion for the function, like getting into businesses and understanding the operations and applying a practice that added value and efficiencies and not just cost savings that often people rely on for the function, but truly value adding and innovation and services is what I found through the practice. And I was able to get an internship ground up, learning it on the ground of entering purchase orders and building systems, system application testing. So I understood the procurement process side and then grew the ranks through strategic sourcing. Then the opportunity came in 2009 to move to New York and do that for the Lefrac organization, who's a prominent developer in commercial and residential real estate. Also construction ground up and applying those procurement practices, the systems, the process, the policies within that application, and that subject matter expertise is what brought me to being able to do it in the sports entertainment world. Madison square garden didn't have any subject matter experts that understood that facility management element of the business and trying to leverage the value that they have in the marketplace. So I brought that same methodology there in 2016 and helped stand up a lot of that policy procedure process us and had a lot of good wins. So much so that in 2023 with the way that the market was, I figured why not go out and sell myself out to the greater industry and try to leverage that knowledge to the marketplace. 1.1s

Yeah, 1.2s that's an amazing story. Obviously, when I first talked to you, even if I didn't know your background and situation, you just really felt like an entrepreneur to me. And what I mean by that is, obviously a lot of us came from the corporate world, grew through the ranks, but we felt like things can be done, better can be transformed. And sometimes in one individual organization, it's very hard to make those changes or impact, but it takes a lot of guts, I would say, and vision and confidence and 1s passion to really give up a great position, to go out and take on that risk. So that's actually the next thing I was going to ask you, is what made you to really the side? What were some maybe a couple of things that really said, hey, I'm just going to go out and try it, give it a try. Be the entrepreneur. And how does that by being an entrepreneur and being on your own, how does that help you, give you more ways to help more companies transform? 1.4s

Yeah, I think you touched on that. I mean, even when I was within the corporate umbrella, I was always very passionate about the function, its impact on the business. And I almost tried to run the department as if it were my own company, right? Trying to create the brand, trying to create the mission, a team that could serve the customers internally, understanding that impact on the shareholders and the bottom line of the business and understanding how it could help run the company back there. So I think over those years in that approach and methodology, to your point, that entrepreneurship mentality, even within the corporate walls, I was able to do that successfully. And I've seen that growth within the walls of 1s a few cases, a couple of different companies, but always within that one organization. I think what this was a culmination of 20 plus years experience in the timing of the market with the macroeconomic factors of inflation. So costs have risen through the pandemic. The labor shortages that we see, this is really dynamic as it relates to these industries I serve. It's the shortages of labor, not only in the procurement function, so the people that actually know the business that can add the value from the level that I provide it, but also, if you think about it, they're also facing as operators labor shortages either within their own company or their suppliers that are servicing them. So, for example, if they have 1s janitorial services or these other third parties that they rely on to support their businesses, those companies are even challenged, right? So you think about the supply chain as a whole on both the goods and the services side, and there's a lot of challenges. And when you bring a level of sophistication that I've been able to bring to organizations and the value of the function and how we do it strategically, it adds a lot of value. And I believed in that mission. And the goal is to continue to do that for more companies within the industry's. 1.4s

Yeah. And you're off to a hot start, so we're going to talk more about that. But look, you've been in procurement, like you said, many years. What do you think are the top three challenges? And we both know there's a lot of challenges that procurement team faces internally and externally. But what do you think are the top three challenges procurement executives face today's? Kind of economic environment?

Yeah, I think there are a lot of factors, internally and externally. One of them, I believe for the function to truly be successful, it needs top down support. And that obviously varies within an organization. Whether it sits under the CFO or it sits under the CEO, you need somebody to champion the function 1.5s that helps get the buy in throughout the organization. But it also gets you the resources you need to properly operate and build the department. Right. Every department could have its own mission depending on what the business needs are. Right. It could be procurement could have different elements. We're talking about the strategic side of it. Is it the procurement operational execution of the source to pay the procurement application? There's different models, but at the end of the day, whatever the business need is, meaning however that business functions, or whatever the greatest application of that procurement service is, it needs the support from the top because it needs the right people within the department to perform those functions. So that takes me to the next one, is who are the people within once leadership supports it, who are those individuals in those roles that understand the business? I'm a big believer that procurement success is not just understanding procurement, but it's actually the right people within the department that have the soft skills to communicate effectively, to create relationships that understand how the business operates. Because it's a service function. Procurement within a business, at the end of the day, is a shared service that adds value to the organization. And you can't add that value unless you truly understand how it operates. And you need that SME background. You need those soft skills to create those relationships, to develop the rapport needed to deliver. Right. And then you need the true procurement skills of how to negotiate, how to contract, how to execute, and then the back end office of how to manage those the tools to support that and think, that takes me to the last one. Is there's often a lack of investment in the automation and the tools for procurement to do their job more efficiently? So get the right tools to the fingertips of the people that are performing the work to do it more effectively. Right. We're all challenged with. 1.3s The operations of 1.5s the demand of negotiating contracts, trying to do quarterly business reviews, and all the various challenges that you come across day to day trying to manage an operation if you don't have the right tools in place to support it, you you become a reactive organization, putting out fires and not necessarily a proactive one. You know, staying ahead of the business and trying to add value. 1.2s

Yeah. And again, I always love hearing your experience and insights. I got a couple of billion dollar questions for you today that I think all procurement people want to know and hear. But one of them that kind of comes top of mind, based on what you just said, is if procurement functions were to align even more with the business, meaning they are there to help with optimization, reducing costs, improve efficiency for the business. If those are such as important critical functions of a profitable, successful business, why do you think 1.6s oftentimes procurement are not getting the support from even number one, right? What you talked about, the top down support, even lack of automation, which is lack of investment or budget too, by those tools. If the function of procurement is so important, 1.4s why do you think 1s they still oftentimes not getting that support? You think. 1.6s

Yeah, again, I think that's very company specific. But we also have to remember that procurement is a support function to a greater organization. And I think if you look, especially in the last three years, some organizations have valued it to the point where they understand its importance because of the supply chain challenges they had, and now they're starting to invest in them. But if they're not, they're still too caught up in the front end revenue side of the business. At times. 1s If you look at these macroeconomic factors, they're not just impacting the supply chain from the back end side, the inputs of the business, they're actually affecting the revenue side, the customers. Right. So oftentimes, if you don't have the right vision and the right organizational structure, the COO CEO that understands the value of it, they're not really investing in that procurement element, then I also think we as a function, have to take a look at how we're delivering our service. And I don't think there's enough procurement professionals out there that truly try to modernize the delivery of the services and truly try to understand the business. It's often two times caught up in procurement ease type language of spend visibility, which these are all important strategies, but in order to really impact the business, I think you need to speak the business's language and help drive that, because that will help with ultimate adoption of these strategies. S when you could show the alignment into the business. 1.3s

Yeah, that's why I say you have the vision. So the next question is, and again, this is when I first talked to you, you from a leadership and procurement manages all categories. It could be from food all the way up to technology has nothing to do with each other, but it's all part of functions of the business. And so obviously, procurement in general, the function, manages so many categories within a company. How have you seen, 1.6s how were you able to successfully manage all these different categories? You think obviously you can't be the expert in all categories. Right. So what was your strategy on what categories to focus on and how to manage so many categories? 1.9s

Yeah, so really there you have to spend the time in the day to understand your spend and categorize it, to optimize your resources. Right. To your point, you can't have every single dollar covered in most businesses from a procurement perspective, but do you do want to categorize and prioritize top down what your business relies on? And that could be done in certain different ways. You could create a criticality matrix that talks about importance to the business, it could be amount of spend, but you work with leadership to define what is important there based on how the business functions. Right. And then you understand what those categories are and you resource them properly. For us, as you mentioned, some of the categories were food and beverage, where it was so front end to the business. It was a revenue driver that you had to make sure that you did it well. And that's a good example where technology in that business is very niche because it's a food and beverage inventory system that has to end to end inventory management protocols, controls in place give you the visibility of what you have on hand, what you need to order. And it was actually a very big challenge to get the leadership to support it ultimately did. To bring the stakeholders together, to then invest in the technology, to improve it, so that we can add better controls, better manage spend through bidding and better visibility into where our costs are, which ultimately allowed us to manage our suppliers better at a time. And really in the supply chain where the food and bev industry was suffering a lot of challenges. I mean, even us as individuals went to the grocery store and we saw that prices were increasing significantly or even worse. You couldn't find what you wanted. There were shortages of chicken and meat in the market. Wow. And running a larger organization at the scale we did, we needed the tools in place. But it was challenging because that takes a lot of time and resources internally to invest in that. You just have to. 1.2s Help boil down to the leadership, what that means to the business and the value that it adds. Frankly, the challenge there is that's only one area of the business, you still had to manage all of the other elements. And that's where you typically go to market with a single platform for Procure to pay, and then you try to build your business an application around that, around those out of the box SaaS software. 1.3s

Yeah. So obviously you talked about different areas of challenges. Do you feel like these challenges are more people process, culture? And again, I'm sure it's very company specific, but what do you think are maybe some of the biggest reasons when you think about at the root of these challenges, is it more, again, the people process or culture? You think, 1.9s

I'm a big people process technology guy, so I would stay there. That really when you break down the business, you have to have the right people and leadership in place. And I mean that not just at the CEO CFO level, but you need the right procurement leadership in place who understand these processes and understand these technologies in the market to bring them to the business. Right. So in my case, I have to understand what are the right tools in the real estate industry, in the sports entertainment industry, to bring it to those markets. And if you don't have the right people and processes in place to support that business, it's going to fail. 2s

It? Yeah, that's an interesting way to kind of look at it, not just from procurement in general, but obviously in your specific niche that you specialize in. 1.2s You talked a lot about technology. What would you say are some of the main technologies that you feel like maybe most companies or industries should look into when they look at procurement function? Is it source to pay? Is it certain technology? And obviously there are some technology, like you mentioned, that are more niche to your specific industry. But are there more general technology that you think most procurement you would recommend that they implement if they only had one or two things they can do, right. Based on budget, what would that kind of top couple of things be? 1.3s

Yeah, I think first and foremost, you need an application that's going to give you the visibility into the spend. Right. Because I'm a big believer you can't manage what you don't have the visibility of, you can't improve it. So you need the right tool to get in place to understand what the transactions are, to then manage that for improvement. Right. If you have poor data going in, you're going to have poor data on the back end. You can't make good business decisions. So you really need to focus on what is the right tool and application that helps me understand exactly what it is that I'm buying. So that even if you can't address it right away, over time, you're developing the data that gives you that visibility and transparency into not only your cost, but who you're buying it from, when you're buying it, how much you spent, spent for it. And it gives you that playbook and that data to ultimately run your business better in the future. 1.2s

Yeah, obviously as Verisource we're huge on data as well. And 2.3s when you look at where people spend a lot of money, right, whether it's people you're talking about ad spend is you have data, right? You hire a person, you determine whether that person, you're going to keep that person or let them go based on their performance. And a lot of that is data as well, meaning all these critical business decisions, you should have data. And they do have data, right? HR and marketing and all of these things. But then sometimes they don't correlate that same methodology to other areas of the business. 1.4s I think what you're talking about is just having data, 1.5s and I think that's for sure. Totally agree with you there. But now that you're an entrepreneur, you're working with so many different, many different companies, different sizes. Now do you see some similarities where they face the same challenges or roadblocks across different size and industry of companies? What do you see there?

Yeah, I do. I see an overall lack of investment in the function. And I think that's probably going to be a consistent message that you'll hear from me, because they're going to bring me in to improve that right. They're calling on me. And the value I bring to them is to help them improve those areas they have otherwise not invested in. So I think overall, the function in itself has not been given enough attention. And the good news is for procurement professionals around the world, certainly here in the US. That the supply chains and the impacts that we've seen have increased the value of our roles and responsibilities. And I think now you're starting to see a little more desire for these organizations to put more resources behind this part of the business. So how can I do this better? How can I make sure that I'm reducing the risk of my business? By ensuring that I have the goods or services I need to provide that customer experience that I need, whether that's a good that I'm providing them or a service that I'm providing them. That I understand that procurement is an important part of that now because they add value through greater relationships with these suppliers. And we understand that these suppliers that we took for granted in the past are truly a valued partner of mine, and that procurement solutions and the procurement function helps bring that value to the table to help make the business run more efficiently, reduces the risk, lowers cost, and overall, again, just adds that value. So I think the consistent variable I see is that the functions just in the past has been undervalued, underappreciated, underinvested, in, and I'm helping go in and bring those tools to the table, bring that experience to the table to then bring that value and. 1.1s

Yeah, I know that makes a lot of sense. So another billion dollar question thrown in here. So even when you're at corporate, right, obviously 1.5s to me, procurement is kind of the quarterback in a way to look at the overall visibility of the business of all spends. And sometimes, like you said, they have to service different stakeholders, different departments, there's different personalities. And sometimes that cooperation between procurement and stakeholders or the departments are very challenging because everybody has different agendas, experiences. Again, personalities. And so obviously, stakeholders oftentimes have ways they like to do things right? And it's like having an additional person coming in. Maybe they feel like you're telling them what to do. Right. So there's a lot of that goes on within corporations and procurement. What has your experience been in how to best manage that? And how can you recommend other procurement professionals where they can build better relationship and cooperation? I would say with stakeholders, and they want to. And most of the procurement people we talk to, they want to. But it's easier said than done. Just because they want to doesn't mean the other person on the other side wants to. Right? So do you have any tips or do you have any thoughts on that challenge? And also, how would you kind of solve that? 1.8s

Yeah, no, I appreciate that because in all honesty, that's what I've always had pride in myself in performing the role that I was always in, whether that be at an individual contributor level, managing projects with the business, or even when I was more in leadership roles, managing teams that were delivering that service. I've always made sure that, and as I emphasized previously, is that you have to understand the business. Right. You can't expect somebody within the organization to trust you, to build that level of trust, to help you do your job better if you don't understand their job. And when I say their job is it's just not just their function, but how their function interacts within the organization, right. They have other stakeholders they're supporting. You have to really have the right team right approach to build that trust. And that's done by that subject matter expertise in that function. But it's also done through honesty, empathy and communication and wanting to know their business and taking the time to understand their business and thinking about yourself as truly a service extension to them and being more valuable than just trying to push an agenda of a sourcing process or acquired purchase order. It's helping them understand what their challenges of their business are and then enabling them to do their job better. Right? I don't think procurement oftentimes takes that approach to take a step back and put themselves in the businesses shoes and understand how can I enable them to do their job better. I think when you do that, you inherently gain the trust, you gain the empathy, and then through that you're able to deliver the mission and the value of what the procurement function is. Right. Because we ourselves know the challenges that we have and we often rely on many stakeholders to deliver our value prop, for instance, legal and other people that take to deliver and engage engagement. Right. So we have to have that same empathy and help understand their business in order to really drive home the value that procurement can give to their organization. 2.3s

Yeah, it's definitely easier said than done. I think you need to have the empathy, you need to have that focus, yet it's a lot of people skills as well and it's just a combination of things. So definitely 1.3s understand kind of the challenges there 2.7s as we kind of wrap up with a couple of last questions here. So obviously talking to you, you have a lot of vision on what modern future procurement look like. Can you spend a couple of minutes, kind of share with the audience that you shared maybe last couple of times with me? What do you think the modern and future procurement needs to look like in 2023 and moving forward? 1.5s

Yeah, I think we're silly if we're not spending more time understanding the technology and application side of the business. You can't look at any news article now without seeing Chat GPT, understanding AI and understanding the significance of data and technology, how it's impacting not only our personal lives, but how that's impacting and being a business disruptor. I don't think it'll be tomorrow, but I think it just emphasizes that if you're not already investing in technology and you're not already at the point where you're leveraging systems and good process, you're going to be even further behind the eight ball. Whenever these other AI and other tools are truly impacting supply chains and procurement, you're going to be even further behind. So I think if you're not utilizing the tools to then implement good systems and process to enable the business, you're just going to be too slow and ineffective in your delivery. And I think that is a major element of ensuring that the procurement function in stays relevant in modern business. 1.6s

So when you look at AI, I mean, it's just crazy, right? Like, we're all talking about it in the last two months, where a lot of us thought maybe in five years, some people thought ten years, like two months later, AI is here. It's literally just a huge moment in history, really. 1.3s In the same way, maybe Cloud or even I haven't really seen any other thing, right. Because it's AI to some degree has been commoditized, which is crazy to think about. But maybe a fun question for you is when you look at Chat GPT or even AI solution like that, what would be a use case or area from a procurement professional that you would want to utilize that technology, whether it's possible or not? Just as a fun question, where would you want to utilize that? Or see some hope something like that exists in the procurement kind of area.

This is where the supply chain guy really comes out and you start to appreciate what someone like a Jeff Bezos and Amazon has done. Right. They've made it so simple for me as an individual, to buy something I need. Right. It seems so 1s archaic at the beginning of how could you get all these products to the end customer so easily, and the buying process so simple. And it's just scaled beyond just buying a couple of things. You can now buy food and groceries and services. And he'd been able to build a platform that allows us as individuals to transact so simply. Right. And you look at how we transact as a business, it's clunky, it's not as efficient. Right. So I feel like this wave of AI, if used properly, over top of the industry, has the ability to create a marketplace and an experience for a business that leverages out the supply chains in these various industries and brings them to a business in a much easier, much fluid, more efficient manner than we've ever seen 1.1s in prior years. 1.1s

It. Yeah. And it, it's, it's coming. It's I don't think all those things are becoming possible. So it's pretty exciting. So the last question for you, and I think it's a topic that a lot of procurement people don't think about or think about but don't know how to achieve it. Maybe you can give us some thought. How can procurement impact the top line? Because a lot of times procurement is also mainly looked at bottom line, right. Cost savings and reduction and optimization. And that's the bottom line. But there are so many examples I can think of and that I know of that they can help impact the top line. Again, it could be company specific. Right. You earlier mentioned this great example of the food, meaning, hey, yes, you want to buy food for cheaper, better, faster, but it also is a revenue generator. Like what you do impacts the top line. But are there certain categories or areas you can kind of think of that procurement can actually get involved in that actually impact the top line? 1.4s Of or ways to impact the top line. Can you kind of finish the conversation here?

Yeah, I can. And I've got a lot of experience in that, and it's one I pride myself in, especially coming out of the industries I have between real estate property management and venue operations and construction. So using some of the examples you just mentioned, food and beverage, you may not be utilizing the right food to then show the value of what I pay more for. That right. And really helping connect what I helped do at Master Square Garden was I helped connect the suppliers to the actual chefs. Right. So those conversations were happening of how do I maybe reduce the cost but intrinsically create value to the end customer and the customer experience so that they enjoy their sandwich more or the bread looks better on the burger. And all these other things that if you didn't break down the supply chain and create that opportunity for the suppliers and the value they bring to the tables, otherwise wouldn't happen. And same goes, for example, in real estate. So you might be able to buy any Faucet or any. 3.7s Material for your residential application. You may be able to buy any product for your commercial application, but there are certain brands and certain elements of design and architecture that when you bring to a certain space, create a greater cost per square foot demand, right? So having the right suppliers and having the right relationships in place that understand that value from a procurement perspective, you can then connect those suppliers to the decision makers within the businesses so that the ultimate value is achieved. And lastly, specifically in the sports, bringing back yours and my kind of passion and interest around sports, the real interesting way to do that in the sports entertainment world is the revenue generating opportunities through sponsorships. So procurement has a unique opportunity around spend when it is done properly and being a control and understanding where the most spend is, where the opportunity for investment back is, and creating that connection with the marketing partnerships and the sponsorship teams and helping support those teams at a greater level so that these suppliers feel like a true partner and willing to open up their wallets and say, it makes sense for me to be a sponsor here because I know that this is the right business that I invest in. I know that I'm going to get these things back. And they're willing to put as much, if not more money on the table than the cost of goods that you may be buying or they're providing you. So procurement, when really be done well and done right, really has an opportunity to drive a greater ROI, not just from the cost perspective, but from the revenue side as well. 1.1s

Yeah. No, Matt, I think obviously you have the passion, you have the experience, but you also are a great, I think, communicator in that you're able to break these things down in simple business terms and ways that I think executives can appreciate and understand. I think that's why this entrepreneur journey for you has kicked off really well really quickly. The last question that we always have for every guest is you've seen a lot, you've done a lot. If you have to give one personal and or business advice that you're passionate about, what would it be? 1.7s

Do the right thing because it's the right thing to do. I've always maintained a level of integrity in what I do and how I do it. And I think if you even look at the logo on the website, it's a compass with the north colored in. And that was intentional. It's an intentional sign to show that me as an individual, my company, everything I've always been a part of, I always try to do the right thing because it's the right thing to do. And I think if you do that, not only personally, you're more successful because you put your head down on the pillow at night knowing you tried your hardest, you did your best. But also that shows to the interactions and the individuals you do business with and the interactions of the personal relationships you have, and that ultimately, is just going to be more successful. So I would always say do the right thing because it's the right thing to do. It's not always an easy thing, but it's the right thing.

It's yeah, 1.6s it's been a great conversation. You're a great friend and partner, and we're excited to partner with people that share that same vision for clients, but also kind of just a way to approach business and life. So I really appreciate you spending some time with me.

Likewise, Victor. I appreciate you having me on here.

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Modern Procurement with Matt Mehler

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