DCS: ONE SYSTEM MAY FINALLY FIT ALL

One of the most irritating technological burrs under dealers' saddles in the past 20 years has been the evolution of dealer-factory comm-unications systems (DCS).

This particular evolution has meant frequent changes in the ways that manufacturers ask their dealers to submit warranty claims, vehicle orders, financial statements and a slew of other paperwork.

Few would not agree that technology has greatly speeded up these transactions, nor that manufacturers and dealers alike have not benefited from the more timely exchange of paper, parts and vehicles.

But what has consistently vexed dealers each time DCS methods, modems and other devices have mutated is the cost of the new technology - that and what seemed like unnecessary duplication of effort in re-keying information for each factory the dealer happened to represent.

It wasn't too long ago, after all, when a dealer with several GM franchises was expected to dedicate a separate DCS PC for each GM make being sold at that location.

With the introduction of satellite technology a few years ago, the factories seemed more sensitive to dealers' cost concerns, and the OEMs, for the most part, absorbed the cost of installing satellite dishes at the dealerships. But dealers were then expected to pay monthly subscription fees for the privilege of using the satellite dish.

Predictably enough, dealers were found to be grumbling again. What was to have been a two-way communications street turned out to be a jetway for factory output, but only a pot-holed dirt road for dealer use, due to the severe limitations of the satellite systems of the day.

Nor did satellite transmission give the multi-franchise dealer any relief from the dedicated box requirement levied by auto manufacturers - PC redundancy, as the problem came to be known.

So it is with something of a shudder that dealers tend to greet any announcement of improvements in their factory communications systems.

Many dealers have become so averse to changes in this specific technology that they have been labeled (perhaps justifiably in many cases) "technophobic."

But in most cases, dealer phobia is not directed toward technology. Rather, it's directed at being coerced into spending money on yet another sphere not of their choosing. After all, not only do changes in factory communications systems tend to be costly, they also entail a disruptive learning curve and transition period as employees learn the ins and outs of operating the new system.

Good news, worse news... Dealers be warned: substantial changes in DCS once again loom on the horizon, and these changes could - as the perennial promise goes - in the long run, actually save dealers money, especially multi-franchise, multi-point dealers.

"We're seeing more open-mindedness on the part of the car manufacturers," says Wayne Williams, 1999 chair of NADA's Information Technology Committee. "I think they've begun to accept the fact that there needs to be one (communications protocol) standard, one system that should be adaptable for everyone."

Mr. Williams operates a seven-franchise dealership company, Williams Auto World, in Lansing, MI. The main goal of the IT Committee has been to help establish such cross-factory protocols, he says.

The principal finding of the committee, working with OEMs and dealership system vendors, is that browser-based, Internet-type technology offers the greatest potential for meeting the standardization goals that are now gaining increasing acceptance across the auto retailing industry.

So far, Saab's Iris system, Mercedes' NetStar, and BMW's DCS 2000 are the deepest forays into Internet-like factory communications realm. But the majority of automakers are likely to consider implementing at least some browser-based option in better aligning their DCS needs with those of their dealers.

The new browser-based DCS technologies, using the same TCPIP language as is used on the Internet, will eliminate the need for duplicate franchise-by-franchise systems and, instead, be a much more open channel for networking all systems, within the dealership and without.

Links within multi-site dealership chains with locations in different cities around the country will be enable employees to share vast quantities of information with fewer clicks than ever.

Stores with dealership management systems (DMS) from different vendors will be able seamlessly to share information - an ADP system talking to a Reynolds and Reynolds system, for instance, thus breaking down walls between dealership systems providers (DSPs) that have heretofore been thought insurmountable.

The factory communications segments of these new systems will be much more interactive because they really will be two-way telecommunications avenues.

Browser-based technology will also facilitate dealer-to-dealer communications, making such transactions as parts and vehicle locating faster, more efficient, more profitable for all parties involved - and more satisfying for consumers.

In addition to the speed of Internet-like technology, the second greatest advantage is the graphical nature of browser-based technology, says Kurt Lieberman, group vice president, retail management solutions division of Reynolds and Reynolds.

"The graphics make web-based systems easier to use for applications such as parts locator functions," says Mr. Lieberman. "Now, instead of just being able to locate a part and then call the dealership that has it, you'll be able to click on an image and order that part right on-screen. Graphic capability will also make it easier to order parts from the factory."

In addition to the visual glitz and glitter that will grace previously hum-drum dealership management applications screens, browser-based systems will, of course, provide even greater access to the World Wide Web.

Pay me now... But new technology, as dealers know all too well, comes with a price tag, and the price of browser-based systems could include some formidable up-front costs.

"All the manufacturers seem to be moving toward delivering information to their dealers through the Internet," observes Wes Lutz, owner of single-point Extreme Dodge in Jackson, MI, and a member of the NADA IT Committee.

"But," he warns, "dealers are not ready for that. They have analog phone systems, not digital T-1 systems. They'll need a different type of communications link, and for a typical dealer to get a T-1 link installed, it's probably a six-month wait in today's market."

Somewhat mollifying the up-front costs, however, is the cost-reducing feature of browser-based tech-nology called frame relay, which will allow the dealership to manually adjust the usage level (and, therefore, usage cost) of the system based on traffic needs.

The band width issue has the potential to become a problem between dealers and OEMs if it takes on an unnecessarily proprietary aura; that is, if factories insist that dealers use only some factory-branded telecommunications channel. But band width, like electricity, is a commodity, and no reasonable car maker will want to be in the band-width business, or try to restrict what telecommunications carriers (or electrical power companies) dealers might choose.

Real relief for dealers - the dollars and cents kind - from DCS equipment duplication may finally be more than just a good idea. It comes just in time, in this era of both modest multi-franchise expansion and gargantuan consolidation.

"Should AutoNation need 400 different DCS operations?" asks Mr. Lieberman. "Of course not. They should need only one. Enlightened self-interest is finally bringing dealers and manufacturers together on this issue."

Reynolds and Reynolds says it new eActivate! computer product will deliver services that auto retailers need in order to take advantage of the Internet's marketing and communications capability.

"Retailers increasingly see the value of deep connectivity with their customers and prospects, car companies and the many service providers they rely on to transact business. eActivate! literally turns on the switches to allow a new approach to automotive retailing," says Kurt Lieberman, general manager of Reynolds and Reynolds' Retail Management Solutions Division.

Reynolds and Reynolds says eActivate! will let a dealership:

* Drive business-to-business and business-to-consumer Internet communication to increase traffic, strengthen CSI, and improve communications.

* Strengthen brand image through timely and targeted one-to-one marketing.

* Enhance Internet marketing skills and processes.

Mr. Lieberman says eActivate! transforms his company's ERA2 retail management system into a marketing tool turning data into valuable information for marketing programs.

Its current offerings for outbound electronic marketing include such tools as service notifications, special order parts, prospect follow up, and customer follow up, including recognition and relationship and customer satisfaction.

eActivate! will also include website content for Reynolds customers featuring retailer information, system updates and services for marketing.

"As the New Economy continues to grow, it is imperative that retailers embrace e-business as part of their solutions package," says Mr. Lieberman.