One of the big issues for dealers evaluating their information technology systems in 2004 is the need for broadband connectivity.

IT companies are focusing on telling dealers of the benefits of upgrading to broadband.

“It's time for dealers to get wired,” says Dan McCray, vice president-Marketing ADP Dealer Services.

But it's not always as easy as it sounds. “There are places in this country where it's still difficult to get good connectivity,” notes Jeff Almoney, chief technology officer for the Reynolds & Reynolds Co.

“We have seen that the enterprise groups and larger dealership groups have already done it, though,” he says.

There are some critical issues that dealers should consider before upgrading to broadband, according to McCray. First is the local area network (LAN) that consists of the store's physical on-site connections.

Originally, 10-based T switches were used to handle the in-store connections, but now the more advanced 100-based T switches are available.

The problem is that dealers, in trying to cut costs will often opt for the cheaper, less expensive switches while the hardware may be more advanced and not compatible.

“What happens is that the system will default to the lowest common denominator,” says McCray. Then the system stops running. “It's a consistent and big problem in our industry.”

A second area to evaluate is which type of wide area network (WAN) to set up. A WAN is the dealership's network of connections off the store property. WANs let dealerships communicate with other businesses such as other dealerships, third-party companies and vendors.

Dealerships can elect to go one of two ways. One method is the standard Internet connection. A second is the frame connection. The frame method uses point-to-point connections across shorter distances.

“Dealers should look at this option,” McCray says. “It provides more security and requires less technology.”

Once the connection puzzle is solved, dealers should evaluate the security of the system. Security is the least understood part of this process, says McCray.

The first area to look at is the relationship with the Internet service provider (ISP). It must be able to put in a firewall that distinguishes between wanted and unwanted traffic. It should filter out unwanted traffic.

For example, it shouldn't allow pornographic sites to be downloaded, but should allow in third-party vendors who need access to the server.

“We're finding that dealers are establishing the firewall, but they're not doing the web filtering,” McCray says. “Many dealers assume employees can be more professional. What happens, is the downloading of music and streaming videos takes up a lot of bandwidth. Dealerships lose efficiency and production, as a result.”

That does not mean dealers should bar employee access to personal computers. Instead, they should be getting full PC systems into the hands of each user, says Almoney.

That's because there is a greater use of the Internet across all facets of the business, says Tom Campisi, communications chairman for the Standard for Technology in Automotive Retail (STAR) consortium.

Dealers should consider establishing an Internet employee policy that clearly outlines what sites employees are allowed and not allowed to access.

The increased usage of wireless applications is a trend that should gain traction this year.

“It's a different way of connecting devices inside the dealership,” says McCray.

“We're starting to see dealerships using wireless units in the service bay and on the lot to check inventory,” Campisi says. “But this technology is the least mature.”

Another expected trend in 2004 will be better integration of the dealer management systems, Almoney believes. Instead of the nightly batch downloads that many companies employ today, the integration will be real time.

For example, Toyota Motor Corp. was taking sales leads from its web site and batch downloading them to the DMS systems on a nightly basis.

Now, Toyota is able to send those leads in real time to the DMS systems because it's using the Extensible Markup Language (XML) standards that have been developed by the STAR consortium. XML allows disparate systems to communicate with each other.

That should lead to increased emphasis on getting more quality into communications in 2004, predicts Almoney.