Spin-Off Dealer IT Provider Plans More In-House R&D

CDK Global plans to do more of its own R&D than it did under another name as a dealership-services division of information-technology giant ADP.

The former ADP Dealer Services had followed a strategy of acquiring companies for their technology rather than developing it in-house. But offshoot CDK intends to change that.

“There will be significant platform development and a focus on R&D,” says Malcolm Thorne, CDK’s chief strategy officer. “We’re committed to internal motivation.”

He adds, “We want to move to a cadence where we are providing innovation in a dynamic manner. We’re not fully there yet.”

CDK was created as a publicly traded company in a $825 million spin-off deal this year.

“Some ADP investors will stay and some won’t,” says Steve Anenen, who was president of the defunct ADP Dealer Services and now is CDK’s CEO.

In his new role, he embarked on an 8-city, 8-day whirlwind visiting of 140 investors. “It was like hell week in college,” he quips.

Anenen says his ADP division operated “pretty much” as a stand-alone, providing dealers with IT products such as dealership management systems and customer-relationship management software.

But autonomy brings speed, he says at a recent DrivingSales industry conference. “By not being under the ADP umbrella, I can make decisions to go faster in some respects.”

CDK wants to serve as “a big-data analytics leader providing actionable insights to dealers,” Thorne says. 

Anenen adds, “Analytics is only useful if it is insightful and actionable. We will make analytics more of a centerpiece, especially along the lines of predictable analytics.”

An example of predictable analytics is to crunch customer data to get an idea of when particular car owners might reenter the market, what type of vehicle they might buy and how much they might spend. Dealerships can use such information for target marketing.

“It’s personalization intelligence, Thorne says.

Raw data offers little if someone can't put it to good use, Adam Justis, Adobe's director-product marketing, says at the conference. "You don't want to be data rich and knowledge poor."    

The letters in CDK’s name represent three of the former ADP dealer unit’s largest businesses.

The “C” stands for Cobalt, a digital marketing firm ADP bought in 2010. “D” is for Dealer Services and “K” for Kerridge Computer, a U.K.-based company ADP acquired in 2005. 

The Kerridge acquisition was a strategic decision and commitment to become a global provider, Anenen says.

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