Karen Puchalsky, CEO of Innovate E-Commerce

Karen Puchalsky is the Founder, President and CEO of Innovate E-Commerce. She has a B.S. degree in Business Administration and a minor in Computer Science from St. Vincent College. She is a graduate from the Institute of Entrepreneur Excellence at the University of Pittsburgh. When not at her desk working you will find her riding her horse in the discipline of Dressage.

Episode Transcript

(00:09):
And welcome in. This is theCEOs Used to Know podcast. I'm your
host, Johnny Hart. Well,let's say hello to Karen Pahulski, CEO
of Innovate e Commerce. Thank youfor joining me. Well, thank you
so much for having me. Sotell me everything we need to know about
your company. Well, Innovate eCommerce started in nineteen ninety seven and the
easiest way probably to tell what itdoes is we sit rate dead center of

(00:30):
the supply chain and we are Icall ourselves the IT translator of the world.
So, for an example, oneof our customers deals with a company
like Walmart. Walmart sends the orders, we translate that so that our customer
can actually take it to their applicationand process the order and then send the
invoice out and we translate it toWalmart and read it. Now, I'm

(00:53):
not an expert on when it comesto e commerce, but I do know
it started in the mid nineties.And you say your company is twenty five
five years old, so you startedreally really early, didn't you. Well,
actually we did, and we actuallystarted even pre e commerce back into
what we call EEDI, or electronicdata interchange, and that was said,

(01:14):
you're gonna have to explain that whatis that, Well, that is a
standard that what happened is as companiesrealized that they couldn't talk to each other
electronically, and so many different industriesgot together and put together a standard.
So a purchase order looked a certainway, and voice looked a certain way,
and then it got more adapted asmore and more industries came about.

(01:36):
And so that's what the translation happens. So, for instance, example,
I had as Walmart sense an orderin a certain format. We take that
format and translate it so that ourcustomers can read it, and that translation
is that EEDI. So it goesfrom a EEDI file to you know,
take like an SAP or an Oracleor a homegrown system, and we translate

(02:00):
that to go into their systems.Did you have any idea did you envision
where e commerce was going to goback in nineteen ninety seven, Well,
interestingly enough, a little bit earlierthan that, I was working as a
consultant and they put me as aproject manager and they said you're going to
implement EDI and I said, great, I can spell it, now what

(02:21):
is it? Unfortunately, they sentme to a seminar and I learned what
EDI meant, which was Electronic Datainterchange, and I implemented ADI for this
customer. And at that time,like I said, I was working for
a consulting company and a lot ofpeople were struggling trying to figure out what

(02:42):
EDI was all about. And Iwent to the owner of the company and
I said, I think there's abusiness here, and he said, well,
you find a customer and you canrun your business. And so I
did, and I'm like, Okay, holy crap, now what do I
do? Who was the first customer? First customer was National Steel, and

(03:02):
so they were trying to at thattime, the big adopters of EEDI and
the time was the automotive industry becausethey were doing things called just in time
and vendor manage inventory. So theywanted to have when they were making and
manufacturing a car, they wanted tohave the inventory they're available when it was

(03:23):
coming so when shut the line down. So they were one of the early
adopters, and steel companies were beingbasically we got used to call it the
eight hundred pound gorilla, and itwas like whatever the customer wanted, you
did, And so they had adoptedEEDI, but didn't know how to do
it. So that's who was ourfirst customer as we went in and helped
them implement edi. How many peoplewere doing what you were doing twenty five

(03:46):
years ago, Very few, whichwas the good thing. That was the
advantage. And what happened is toois because early on it was it was
a lot of the large retailers andgrocery industry and everything was pushing it down
to the manufacturers. So they hadto do it, but they didn't know
how to do it, or theyalso had very small it staff. So

(04:10):
it was so we came in andhelped them get it implemented and then basically
trained them so that they could continueon. At the time, did you
think you were a trailblazer? No, not really, but I guess as
I look back, yeah, Iprobably was. It was you know,
like I said, I got myfoot in the door kind of through a

(04:30):
consulting company and then went on toanother company and sold EEDI software and then
from there I said, m that'sactually when the Internet started coming about and
a lot of large companies were like, what do we do with it?
You know, some companies were saying, ah, it's a fad, don't
worry about it, and what Ifound at the time was a lot of

(04:55):
companies were going to customers and sayingwe can help you, and oh,
by the way, here's a productin my briefcase, it will do it
for you. But nobody was reallylooking at their problem and a solution.
And maybe it was five or sixdifferent types of software, or maybe it's
from different companies, and nobody wasdoing that. So that's when I look

(05:15):
back and said, I think there'sa business out here, and that's where
innovate came about. You know,it's amazing how innovative Pittsburgh has been throughout
the years and when it came.When it comes to the Internet and innovations,
a lot of it started right here. And so put us put us
in your perspective. What were youdoing? Did you see did you envision

(05:36):
the Internet where it is today?Did you have any idea at that time?
Well, actually, what I lookedat it as is another way of
transmitting information. So for what wewere doing, which was an electronic data
interchanger. EEDI it was going acrossat that time the old dial up phones,
and so when the Internet came about, it was as supposedly free,

(06:00):
which it really wasn't but it wasa different way of transporting data, and
so for us it was more ofa just just that transfer. You know,
you use you use the dial upline or you could use an internet
and what else does your company do? I know, you're cybersecurity and things
like that. When did you kindof transition to that world? Well,

(06:24):
actually, what we did before.We were basically a consulting company until two
thousand and then in two thousand andwhat we did is we actually bought a
outsourcing company where we actually took overthe company's entire EDI processes. So what
we do now is we are whatwe call managed services company, and so

(06:45):
we are so companies now they don'tneed an IT staff. We become their
arm of their IT staff. Andhow we got into cybersecurity is obviously purchase
orders, invoices, everything that weprocess is so vital to a company any
that we had to make sure thatit was secure and we constantly are upgrading
our infrastructure and our environment and learningcybersecurity was key because you know, orders

(07:12):
don't go through it could shut downa business. In nineteen ninety seven,
you know, you're doing something thatnot a lot of people are aware of.
But also being a female in thetech industry. That's very unique.
Tell us your experience. It wasfun, it was challenging and fun at
the same time. I had toprobably prove myself a little bit more because

(07:33):
it was a very male dominated business. But the nice thing about it is
once I did and I have atechnical background, so I was a programmer
before I was a salesperson. SoI would get into the room where you
would talk to them and why,you know, why innovate and of course
you'd always have the tech guy sittingin the corner with his arms crossed,

(07:54):
ready to challenge you. And Ithink the credibility of the fact that I
could turn to the business person andtalk business and turn to the technical person
and talk technical helped me win themover. And I think the biggest thing
that I found is if I didn'tknow the answer, I told him I
didn't know the answer and that Iwould get back to them, and that
gave me the credibility so that whenI told them something, they believed me.

(08:18):
Give us your background. Where didthis all start with my mom and
dad? Well, I started actuallyjust working, probably like a lot of
females at the time, just workedin an office and was in a building
processing company and it decided it wasgoing to do more automation. And the

(08:45):
gentleman that was working with it tohelp automate it said, I think he
would probably enjoy being a programmer.And I'm like, what the heck?
You know? So I took acouple of courses and lo and behold,
I became a programmer. And thenand then I decided I got to became
a consultant and started consulting in programming, and then thus the EDI project came

(09:07):
about. And that's how I kindof got into the whole EDI realm.
And then I saw that there wasdefinitely a trend in the business world that
this is, this is was goingto be adopted globally. Give us your
CEO philosophy integrity. It's our coreand our our value statement is we have

(09:31):
integrity when nobody's looking, and Ithink, to me, are My favorite
quote from one of my customers wasis we use innovate not because when everything
is going well, but because whensomething fails. And what we do is
we don't look at who's a problem, who's fault it is. All we

(09:52):
look at is is a problem,how do we fix it? And how
do we prevent it from happening inthe future. Tell us about your team.
Well, I always say I'm thefigurehead and they do all the work
I have. Uh, all right, let's see my my newest employee has
been with us for fifteen years.Wow, they are really new. Yeah
they are great. Well, youknow, yes, i'd be in phacetious,

(10:16):
but fifteen years. It's still inthe infancy when it comes to e
commerce, isn't it. Yeah,but yeah, I uh well, two
of the two of the ladies camewith us when we bought the the Outsourcing
Project and they came with us,which was great because they had such great
knowledge and they're still with us today. So they are. They came in

(10:37):
two thousands, so they've been withus twenty three years. But they they're
great. I mean I always Ihad one mentor in my life and he
said, if I am looking overyour shoulder while you're working, it better
be to up update your resume.And I follow that logic. It's like
people let people work in what theydo and they'll come through for you.

(11:01):
And they do. I don't haveto worry, you know, if something
goes bump in the night, they'rethere. If they need to take a
couple of hours off, they takea couple hours off. I just trust
them. They all work remote andthey just get the job done. So
tell us a little bit about theservices of what you do. What are
some of the services that you provide. Well, we probably if you look

(11:24):
at it, we probably have threemain ones. One is what we call
the translation services, and that's wherewe sit in the middle of the supply
chain and we translate to and fromdata from our customers to their customers or
suppliers. That's a big thing.The second part of it is what we
call foul transfer, so we don'treally do any translation of the data.

(11:46):
But we do is we make sureit's secure. So a lot of our
customers want their benefits, their payroll, those types of data that goes through
it. What they do it makesit nice for them, is they dial
to us, which is the cybersecurityand everything, so they have one secure
pipe out of their company. Andthen we take over everything else. Because

(12:07):
every bank wants something different, everyprovider wants something different, we take care
of all that. So that's andthen the third piece of it is what
we call a service called in Voltiand what it is. It's a file
sharing So if you and I wantto share a file, I can put
it up into a very secure environmentand then you can pull that document down

(12:28):
and look at it. And whathappens is is as it goes to and
from the Internet, it's encrypted.So if I'm sending you, let's say
you're my insurance provider, I wantto send you some information about me,
I can send it into this it'sencrypted, and you pull it down and
it's encrypted, so it's never everpossibility of somebody of getting to that information.
I do have some more questions aboutcyber security, but let me let

(12:52):
me kind of probe. When yousaid the supply chain, you are kind
of on the front line. Didyou see the bottleneck in the supply chain
earlier than most people? We canonly because of the data. I mean,
like to go back to even COVID, some of our customers had one
of their best quarters because they werein the grocery industry where it was one

(13:15):
of those items that everybody wanted andthey couldn't keep on the shelf. So
it's we see trends, and wecan see trends in the bottlenecks, and
the fact that people. You know, orders are going through, but what
there's something called an advanced ship notice, which is the information of the goods
being shipped and they were being delayed. Are most of the delays solved by

(13:37):
now? Or are we still seeingsome bottlenecks? I will say there will
always be disruptions in the supply chain, okay. Always. The key to
help companies be better at it andbeing able to forecast and be able to
tot you know, to to flexiblearound them is information. The more information

(13:58):
they get from their suppliers to theircustomers, the better off they are.
So if if I am supplying let'ssay pasta to a store, you know,
the better I have information of whenI'm going to get all the all
the raw goods to make that pasta. I can then tell Giant Eagle when

(14:18):
the pasta is going to be ontheir shelf. Wow, that's amazing.
All right, So let's talk aboutthe big scary cybersecurity, because you know,
we all we all hear about cyberattacks on a daily basis. It
used to be sporadically, but nowit's almost daily that we are getting hit
from hackers and all sorts of thingsfrom other countries how big of an issue

(14:43):
is it? Is it for real? Oh? It's huge, Its huge,
but the biggest, the biggest problemand the most most frequently, or
let me say it's different. Theway that most hackers get into it is
through an employee what we call fromthe from the seat to the board,
and that's through fishing, and that'sthrough you know, people you know.

(15:05):
And ironically the people that get hitmost in the companies is middle management because
they get so many emails and they'regoing through so quickly that sometimes that what
looks like a legitimate one they openand it gets right into their system.
So a lot of these clients thatcome to you and they say, hey,
we want to prevent this, whatdo you what do you do?

(15:26):
What is your sales pitch? Whatdo you say? Well, a couple
of things is our environment is veryvery secure, and we're constantly making updates.
We're constantly we do what we callthree three tiered authentication. So you
and I are communicating electronically. Soyou dial to me and I say who
are you? And you tell mewho you are and I'm like, okay,
then give me your key to makesure that I know, and then

(15:50):
I match your key to our key, so we go through several different types
of authentication to make sure you cancome into our environment. And then the
other side of the as like Isaid, the involvedive side, which is
of our our employees are sharing stuffwith our customers. We share it in
a very secure environment, so wealso continuously monitor. I mean we're continuously

(16:11):
people are continuously trying to get throughour firewall, and we constantly look at
that. But it's your firewall andyour employees are your two areas where people
will attack you. Most of youremployees obviously I don't want you to name
names, but have you seen somepretty scary stuff? Oh? Definitely.
One of our customers at eight ohthree called and said we have been hacked,

(16:33):
and it took them sixty days beforethey got back online. And from
a from a cost standpoint, howmuch would that cost a company? Thousands,
hundreds of thousands, depending on howhow many people was involved, how
long it took them to get backup online, you know, sixty days
of not getting an invoice out,So it looks like you're not gonna Yeah,

(16:59):
you're not going to have any that'sthat integrity. You won't have any
problem getting projects all right, hopefullynot. We're trying really hard. All
right, tell me about Karen.What else should we know about Karen?
I'm an equestrian, okay, yeah, all right. My partner on the
morning show is a is A.You know, she's a horse girl as
well. So do you own yourown horse? I own two? Yes,

(17:22):
that's I'm very poor. What aretheir names? Uh, Reno and
Siren? And which one is thestinker? Because there's always one? No,
Actually, I'm I've lucked out andhas I have? I have very
two, very lovable horses. Soand I ride your sage, So that's
a discipline. I ride. Everybody'slike, what is that? And I

(17:45):
always say, if you look atthe Olympics and it looks like the horses
are dancing to music, that's whatI aspire to. When did you get
interested in interested in that? Well? I was. I was one of
those little girls that always wanted apony and collected horses, you know,
and statue time my dad would goaway, he'd bring back a statue horse
and everything. But my parents neverseemed to understand I really wanted a pony,

(18:07):
so I had to get one verylate in my life. So I
probably started riding about fifteen years ago. It's a lot of work, though
the inn Which is more work thethe innovate or the horse, Well,
I love them both, so neitheris all right. So tell us about
either you or your company's community involvement. Tell us about that, well,

(18:29):
I do belong to and I amon the board of a local dessage association,
which what we do is we doevents and shows and programs to help
to educate people on marssage and givethem opportunities to ride and show off their
skills. I was an ambassador forthe cl CLO for years. I always

(18:52):
said I had enough talent to filla little symbol. So I live my
fantasy through them, and it reallyenjoyed it a lot. Had had a
really great time doing that for many, many years. And just you know,
I try to help out where Ican. I volunteer where I can.
I also contribute to the Wounded Warriorsprogram to give back to the vets.

(19:15):
My dad was a retired major inthe army, so I have a
very strong feeling towards a military allright. So tell us about the future
of Innovate. So tell us aboutthat, well, I hope it outlives
me. I think the future ofit is just to continue to look and

(19:36):
talk to our our customers, seewhat they're what they're trying to solve,
what problems they're trying to solve,and to help to get them there.
We have partnered with a couple ofdifferent companies, so, for instance,
cybersecurity. We don't actually do cybersecurityto our clients, but we have partners
that would do that with them andhelp them evaluate it. That's a company

(19:59):
a acually does what we call apenetration test. So what we do is
we hire people to actually try tobreak in to our company, and we
have always passed with flying colors,thank god, so so we we work
with that and we just really it'sjust to constantly stand in front of our
our customers find out what they needand how we can help them get there,

(20:21):
either ourselves or through a third partythat we trust. All Right,
a female CEO is less rare thanit was back in nineteen ninety seven.
There's a lot of women who arebreaking that glass ceiling. You've done that,
and you've done it for a longtime. What is your experience as
far as as being a female andand you know, you even said that.

(20:47):
You know, computer technology was amale dominated business. So now here's
a female breaking through becoming a CEO, and you know, living in a
world where there's a lot of mendominating the business. But it sounds like
because of the skill that you couldtalk to a business person and talk to
the programming professional, that gives youa leg up. Yeah, I you

(21:11):
know, I guess I never lookedat it that way. I never looked
at because I was a female,you know, I just looked at my
credentials and helping a customer. SoI never really sat back and said,
oh, gee, this is toughbecause I'm a female. It was you
know, I guess I'm one ofthose people. If it was a challenge,
it was made it even more fun. You know what they say that

(21:33):
the uh and a salesperson, thefirst know is the first yes, so
so, so I guess that's kindof the way I looked at it was
like, okay, how can whatwhat did I do that did not sell
my company? Well? What whatdid I miss that I need to go
back to them and explain in moredetail or help them. So I didn't
really look at it as the factthat I was a female. It was

(21:56):
you know, it was a challengingenvironment that I just stepped up the plate.
I think you're being modest because inthat here's a person who's really you.
Really, when I said you werea trailblazer, you really are the
you know, e commerce who's onlybeen around for twenty five years ironically enough,

(22:18):
so as your company, you've beenon You've seen the whole shebang,
the whole the whole e commerce war, and you've been there in the front
lines. Well, I guess,I guess I would say. The only
thing I would say is that thething I think that really helped me is
I built Innovate as a life business. It was something I wanted to run

(22:42):
for a long time. And veryshortly after Innovate was founded, is if
you remember the big dot com erawhere people were investing lots of money in
companies that were going to make moneyfor ten years and watch that peak and
go away, and I think itwas again it was you know, what
value do we provide to our customers? And that's what people bought, and

(23:06):
that's what people stay at. Well, I stayed with us a lot of
our customers. A matter of fact, one of our customers we actually had
a meeting with them a couple ofweeks ago, and we were laughing because
there was only one person at thecompany that was there as long as we
have supported them. Are you proudof what you've accomplished? Very much,
though, and I would say I'mmore proud of the wonderful people i have

(23:30):
working for me, because they arewhat makes Innovate successful. That's amazing.
Karen Pahulsky, CEO of Innovate eCommerce and a CEO you Should Know,
thank you so much. This hasbeen the CEO you Should Know podcast showcasing
businesses that are driving our regional economy. Part of iHeartMedia's commitment to the communities

(23:52):
we serve. I'm Johnny Hartwell,thank you so much for listening. Attules were Lar