In March and April of 2006, Ward's ran a two-part series based on extensive conversations Wayne Fortier, a consultant with Dixon-Hughes and Ward's technology columnist, had with senior executives of the five leading dealer-management system vendors — ADP; ARKONA; AutoSoft; Reynolds and Reynolds; and UCS.
In this issue, Ward's begins another round of conversations — this time with smaller vendors. This month, Wayne sits down with Mike Esposito, the CEO and president of Auto/Mate, a vendor based in Clifton Park, NY. A complete version of the conversation is available with a subscription to the Strategic Dealer newsletter, which can be obtained at www.dixon-hughes.com, or by calling 877-357-2727.
Often when you think about dealer management systems — the big two — ADP and Reynolds & Reynolds immediately come to mind. After that, you might wonder who else is out there.
Questions start to prevail about others including: What are the vendor's capabilities? How long have they been in business? Can they really deliver? Can I trust them?
Dealers and CFOs constantly approach me to ask what other DMS options are available besides ADP and Reynolds & Reynolds. While I do not recommend specific vendors, I can offer information on some that might warrant a meaningful discussion with your organization.
It never hurts to explore pricing and offerings from several options when arriving at your vendor of choice. Once you decide, do all you can to work with them to get the most out of your system.
Data Extraction and Ability to Partner with a Third-Party
Ward's: How does your company partner with other third party providers? What is the pricing structure and cost of admission? Specifically name some that have been approved/ certified under your admission program.
Esposito: If a company calls us and says they need access to a dealer's DMS, we tell them we require a letter from the dealer, signed by the dealer, that says specifically what data that company will have access to. Then, we set up the interface for the third party; or, we will extract the data and send it to them. We do both push and pull. No certifications are necessary and we do not charge either the dealer or the third party company for the set up.
Ward's: To expand on the topic of data and its ownership — explain your position.
Esposito: Our philosophy is that it's the dealers' data and they can do whatever they want with it.
Ward's: How does your company view the ownership of the customer information?
Esposito: We have nothing in our agreement about us having ownership of any data. We won't allow anyone else to have access to that data unless we have a signed letter from the dealer listing exactly what they want the company to have access to.
Ward's: Many of the issues surrounding third party vendors reside around what the vendor can and will “pull” from the DMS. Do you have a solution to “push” the required data to the vendor?
Esposito: We do both push and pull. No cost to either the dealer or third-party vendor.
Upgrades/Additional Product Offerings
Ward's: What new products or ventures do you foresee providing to your customer that typically have not been provided by the DMS vendors in the past? In other words, what other revenue streams do you foresee adding to your revenue model?
Esposito: Auto/Mate adds modules and features to the system based on what the dealers are asking us to do. Third party integration is a typical example, because it gives them more functionality of the system. We don't view adding new features as adding a revenue stream. We charge a flat monthly maintenance fee and we don't charge customers for “upgrades” to the software system. Our focus is, let's make our software and support the best in the industry so we can get more market share, and that's how we'll make additional revenue. As a rule we don't look to our existing customers as a source for new revenue. If we keep our customer satisfaction levels high, then we will retain our existing customers and add new ones, which will increase our revenue in the long run.
Platform Technology
Ward's: Is your solution an “open” architecture solution?
a) database?
b) Application program interfaces (API) — third party interface?
Esposito: Yes, it's an open architecture from both a hardware and software standpoint. Hardware wise there is no proprietary hardware that needs to be purchased. Dealers can buy any PC or printer they want. Our software is open architecture also. Our data dictionaries are available to dealers or anyone else they want us to give it to, at no charge.
The database is an open source Postgres database (SQL) and runs on a Linux server, with the front end running on a Windows client.
As far API's go, we can push or pull, both ways. No fees. No certification required. All we require is a written letter from the vendor, signed by the dealer to authorize them to connect with the CRM and the Internet.
Customer-Relationship Applications
Ward's: What products or services does your company offer with regard to CRM tools and contacting customers?
Esposito: First, we do have a CRM product called Customer/Mate. It offers all the traditional CRM tools for sales; including front-end tools for contacting and following up with prospects and customers.
Ward's: Can customers shop dealers' vehicles on lot inventory/availability?
Esposito: We don't offer a web site like ADP or Reynolds; however, our system does integrate with major web site providers like Cobalt, so that shoppers can use the inventory sites.
Ward's: Can they set up a request for a specific make/model including color, options, etc?
Esposito: Yes, if a customer e-mails specifics, Customer/Mate will send an automated response that tells the customer we got the e-mail, then the system schedules a follow up call, e-mail or letter within the CRM.
Reports
Ward's: Can your system take a manufacturer financial statement that is produced on your system and export it into Excel?
Esposito: In the strictest sense, our system doesn't do that, but with our Office/Mate product you can create a DOC, is basically identical to a financial statement, then you can dump the DOC directly into Excel. We don't directly export to Excel, but Office/Mate allows you to customize any financial statement you want and then dump the information into Excel.
Conversion
Ward's: How easy is it for dealers moving from a competing DMS vendor to your system?
Esposito: It's very easy for dealerships to move to our system. First, we convert all the existing data on the customer's existing system, which makes installation easier. Additionally, data conversion can be done while the dealership continues to use the other system, so dealers don't have any “down time” between systems. Second, the overall look and feel of our DMS is similar to any other Windows graphical user interface. Its very user friendly, intuitive, and everything can be done with point and clicks of the mouse.
Costs
Ward's: What are the estimated monthly “maintenance/use” charges for a dealer using your system today?
Esposito: Typical monthly software maintenance averages about $600-700 per month. There are never any surprises or “add-on” charges on top of this fee, so a dealer can rely on this number being consistent every month. Inventory Scanning Solutions
Ward's: Do you offer vehicle inventory scanning solutions?
Esposito: Yes, we have a software solution that is integrated with our vehicle merchandising module. It gives dealers the ability to print bar codes and put them on cars, and then to scan those bar codes with a cordless scanner, and then to have that scanner tie into Auto/Mate and produce an exception report that shows what you physically have on the lot compared to the inventory in the accounting system.
Ward's: What is the cost for the inventory scanning solution?
Esposito: There is no cost for the solution other than the hardware costs.
Certified Public Accountant Wayne Fortier is a dealership consultant with th firm of Hughes Dixon PLL. He is at 919-876-4546.
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