Although the Internet has not delivered on its initial promise of creating virtual dealer environments where consumers interact with cyber-dealers in a non-confrontational environment, it's delivering true business value in many other ways.

One area in which the Internet is substantially changing the playing field is in factory-to-dealer communications.

Historically, many manufacturers have over-valued their dealer communications system infrastructure, in terms of its role in the success of their retail distribution network.

Private dealer communication networks were built at the request of many OEMs. Massive investments were made in technologies, such as satellite equipment or proprietary terrestrial-based communication mediums that only allowed for dealers to access OEM-approved traffic through proprietary “pipes.”

It's amazing that more people in our business haven't seen the weakness in this approach. Having the “telephone” is not strategic to one's success — it is the conversation that occurs across the phone system that really matters.

Yet, many OEMs continued to roll out new communication pipes with little attention paid to the applications developed and deployed to better support the dealers and their customers.

Finally, it appears that — with the advent of the Internet as a mainstream business tool — a number of OEMs have realized the pipes necessary to carry information to and from their dealer partners can be easily leveraged from the World Wide Web. More attention can now be focused on the “conversations” or applications that are ultimately the key to delivering more value to the entire automotive retail network.

This is encouraging, but one major issue at hand is that some industry players have allowed the pendulum to swing too far — from an overbearing heavy-handed approach to a laissez faire mentality. Too often, we hear OEMs saying, “We've delivered the applications to your doorstep via the web, Mr. Dealer. Now you figure out how to access and integrate them into your business environment.”

Ford recently announced it would provide a solution to its dealers (who haven't already figured out their Internet connectivity needs) in the form of a reliable Internet connection via the Fordstar satellite network. The service carries a reasonably low installation and monthly fee.

In reviewing the Ford offering, Ford's solution clearly will not meet the needs of all its dealers. But that's probably not necessary.

It's important that this approach exhibits Ford's willingness to collaborate with their dealers and third-party providers to create an offering that, at a minimum, provides a base level of service for dealers to evaluate other independent offerings.

In addition, Ford is working to certify a number of LAN/WAN/Network integrators that will help make the critical linkages between the dealers' infrastructure and that of the outside world.

These IT suppliers will be committed to the guidelines and standards, many of which are outlined in the document “Dealership Infrastructure: A Common Vision and Guidelines For Building An Internet-Ready Dealership Network” (also know as Olympus).

Clearly, delivering critical business applications from manufacturers to dealers via the Internet is a good thing. But, before we dump hundreds of critical business applications onto the web for delivery to dealers, let's exercise some caution and help each other understand the pitfalls of not having a business grade Internet connection at the dealer's point of connectivity.

Dealers need many of the same offerings in use by their OEM partners when it comes to accessing the Internet, including firewall security, virus scanning, spam filtering, website blocking, and a reliable, persistent, affordable connectivity solution.

The ability to deliver data to a dealer's doorstep, but with no solution for integrating it with critical business functions, brings our industry no closer to delivering an elevated level of customer experience at the retail level.

If OEMs want to make a positive impression on their dealer partners in the development of new and forward thinking information technology strategies, they must ensure that all the dots are connected when designing a solution, including those within the dealer's four walls.


Matt Parsons is vice president of marketing and new business development for EDS' Automotive Retail Group and an information technology and automotive retailing expert.