Dealers Use IT Less Than They Think

An EDS survey says 57% of dealers believe their information technology systems are being used to at least 60% of capacity.

Dealers who believe that, though, probably are wishfully thinking, says Paul MacDonald, part owner of Bountiful (UT) Mazda and president of TriMac, an IT consulting company for dealers.

He says, “Dealers are probably only using 20% of their IT systems. Dealers understand the need for an IT system and understand pricing but they don't consider the value. Very few dealers have day-to-day interactions with the IT system. They are probably buying what a 20 Group buddy suggests or what the predecessor told him.”

Matt Parsons, vice president of sales and marketing for EDS' Automotive Retail Group, agrees.

“When you're the one writing the check for something, you hope and believe it's getting used,” he says.

Contributing to the problem are complicated IT systems, high dealership personnel turnovers and IT vendors who, in the past, have not focused as intensely on training as they are now.

Despite that, “More dealers are becoming more educated about technology and realize their systems aren't being used to their full ability,” says Parsons. One dealer principal he recently visited is sitting through all of the IT training provided by his systems provider.

He tired of hearing staff complaints that the system couldn't do this and that. Turns out, his employees weren't aware of all of the functions available.

It's indicative of the lack of emphasis that is placed on IT training, says MacDonald. “We train sales staff and technicians constantly, but we don't spend money on IT training because we view it as an expense, not as an asset.”

Mike Boguth, vice president and general manager for Hamilton Chevrolet in Warren, MI, says, “I still have people in my store who haven't grown up with computers and aren't comfortable with them. They find problems and turn those mole hills into mountains.”

Even tech-savvy MacDonald says he has people in his dealership who won't touch computers. “It's a typical dealership dilemma,” he says.

The EDS survey shows nearly eight of 10 dealers believe their IT capabilities will be critical in their ability to compete over the next several years.

Forty-four percent of surveyed dealers prefer a Web-based or ASP model (application service provider) for their Dealer Management Systems. That's up from 37% two years ago.