CDK Global Announces Transformative Plan, Appoints Brian K. MacDonald To Board

CDK Global has announced a new transformative plan they feel will improve their organization. As CDK seeks to transform their organization, they are doing so with the addition of an executive who has a history of transformative success. As part of its plan for improvement, CDK has appointed Brian K. MacDonald to its board of directors, effective immediately. MacDonald has an extensive background in automotive, including executive managerial stints at both GM and Isuzu. Most recently MacDonald served as both president and CEO of the Hertz Rental Equipment Corporation. However, what he’s known for is ability to improve an organization. If CDK wants to transform their company, they’ve certainly found someone with a strong resume.

In 2009, MacDonald joined Sunoco as senior vice president and chief financial officer. During his tenure at Sunoco, the organization greatly improved. According to a CDK Global press release, between 2009 and 2012, Sunoco “exited unprofitable operations, significantly reduced costs, improved efficiencies, and refocused on established high-return businesses.” MacDonald spoke positively about his latest challenge.

In a press release from CDK, MacDonald said, “I am honored to join the CDK board of directors. The company has a strong foundation and is a clear, differentiated market leader with a history of growth.”

Speaking about the transformative plan, Steve Anenen, president and CEO of CDK Global said in a statement, “CDK is the clear market leader with a strong foundation and history of growth. We have embarked on this transformation plan from a position of strength that allows CDK to pivot and focus on significant margin expansion. We have developed a comprehensive and balanced plan to increase profitability with key initiatives that are currently underway.”

CDK Global outlined the three pillars for their transformational strategy in a press release. Those three pillars are

• Drive Operational Excellence
• Deliver Organic Revenue Growth
• Disciplined Capital Allocation

CDK specified in their press release that in order to drive operational excellence, they would like to “streamline the organization to reduce complexities.” What exactly that streamlining on the part of CDK Global will include remains to be seen. What will the CDK transformative plan mean for dealers? In order to reduce costs, CDK Global may cut back slightly on personnel and/or could possibly raise prices. Will they be able to learn to do a better job with fewer employees?

If those cutbacks allow CDK to re-engineer some of their dealer services processes, the organization may come out of this transition running smarter and smoother than ever for dealers. It will be interesting to see if CDK will be able to make necessary cutbacks and improve their processes at the same time. CDK, the former ADP Dealer Services, is an over 40 year old organization that may have legacy practices ripe for re-invention and improvement. We’ll keep you updated as this story develops.