Confusion, confusion, confusion. That's what I see and hear out there. Dealers and their management teams are confused about dealer management systems (DMS). It is no small wonder why.
The playing field is shifting. There are new providers entering the automotive computer-provider business. Smaller vendors are increasing their market share and are now being recognized as viable alternatives.
One thing is for certain: as dealers dive into the pool of RFP (Request For Proposal), the waters can get deep and cloudy.
Think about which vendors you want to deal with. Consider which ones provide the best solution for your particular organization? What are the costs and the most important features and functions that you want from your DMS?
What about the contracts? Is there anything in the contracts that you should watch carefully? How about your computer bills? Do you understand them? Does your DMS provider understand them and can explain them to you? Are you paying for what you purchased and what was installed?
I know of cases where dealers have paid for applications that were not installed. The overpayments came to light upon a more thorough review of their monthly computer bills — which in many cases occur in the fourth year of a five-year contract as the dealers prepare for the next round of RFPs.
Once you feel you are paying the correct amount let's ask the next question. Are you getting what you paid for? Get a bang for your buck, not a pop.
Many dealers complain about system utilization. Does your current system provide what you expected when you purchased it? What can be done to improve it?
Customer data is another critical question. Who does it belong to — the customer, the dealer or the DMS provider?
Of course, dealers should determine what kind of business partner the DMS provider will be, if selected. How does the DMS provider view the relationship? That is a key question to be asked. Business is not always conducted on price alone. Invariably, business is about relationships and trust. So how do you choose?
Some of these questions can be answered by determining just what kind of company the vendor is.
What is the message it wants you, the customer, to hear? What are its principles? What are the short- and long-term directions of its business model? What does it say is its strongest suit (application, service, feature/functionality)? Why would you want to entertain it in an RFP and why should you choose it?
This column raises several questions that dealers need to answer before selecting a DMS vendor. They are the tip of the iceberg. No wonder dealers are overwhelmed with this. The dilemma we face is to identify and quantify the position of various vendors on the various issues and concerns.
To better inform and help dealers so that they can confidently proceed with RFPs, several DMS vendors (UCS, ADP, Reynolds & Reynolds, ARKONA, Autosoft International) have agreed to participate in a series of interviews to answer many of the questions dealers should ask.
In the next few articles I will attempt, with the aid of each of these vendors, to bring these and other issues to the forefront.
In a follow-up article we will focus from the top down by looking at each company's mission and value statements with some additional background information. This should help us to understand who they are and what they believe in.
Then we will continue to dig deeper to address the more direct concerns of dealers, who are the customer of these DMS providers.
CPA Wayne Fortier is a dealership consultant with Dixon Hughes PLLC. He is at 919-876-4546.
