The Light Is Green: NADA 2008 Highlights: Should I change my DMS? (Part 2)

San Francisco pier shops If you missed NADA 2008, the world's premier event for auto dealers, read this series of articles that recap the major issues covered at this year's event.

This year's event was in beautiful San Francisco and spanned 80,000 m2 (700,000 square feet), included 700 exhibitors and 36 workshops, and received 24,000 attendees from all over the world.

Should I change my DMS? (Part 2 of 2)

Renowned DMS expert Sandi Jerome held of one of the more interesting workshops at NADA 2008, focusing on how to dealers can validate the change to a new and better dealer management system.

In part one we talked about why technology typically fails, reasons why a dealer should look at changing their DMS system, and how to know if a new DMS system pays for itself.

The top five issues dealers look at in a DMS

Reason 1: Cost

In general DMS systems are going up 5-10% every year.

But newer DMS systems are beating out the older DMS systems not only with lower monthly software charges, but also because they include many of the services and extras that the older players charge for.

Newer DMS systems don't charge for proprietary hardware or supplies, as they run on off-the-shelf PCs, servers and printers that most dealers already own. Nor do they have “click” charges for laser printing. In the examples analyzed, a new DMS system can cost up to 65% less than an older system.

A note: One of the big differences with how dealers are staffing their stores is that not too long ago they had no IT staff, whereas today that is not the case anymore, and larger dealers even find the need for an entire IT department.

Reason 2: Manufacturer integration

Dealers need to understand how integrated they really need to be. There are up to fifteen different points of integration between a dealer’s DMS and the manufacturer, depending on the OEM. These include financial statements, parts orders, warranty submissions, recalls, delivery reporting. Manufacturers are working with smaller DMS providers, not just the big two.

jigsaw piece Reason 3: All the modules you need

Along with the traditional Parts, Service, Sales, and Accounting/Financials, dealers need a good CRM module as well as F&I. Regarding Payroll, it might be better to look for a third-party solution as you get many more features. And of course, all modules in a DMS need to be integrated.

Reason 4: Multi-company

This is a feature not found in all DMS solutions. A good DMS system will have multi-company functionality in order to allow:

Individualized and consolidated reporting across all departments
Individualized and consolidated views of parts, vehicle and customer information
Parts transfers

Reason 5: Third-party integration

Dealers using third-party add-ons should make sure they can “speak” with their core DMS software.

Dealers have low technology budgets

In general, auto dealers spend much less on technology than other industries. For example, the tech budget of a 200 unit per month, eighty employee dealership will be one third the budget that other industries assign to this area.

Other NADA Highlight posts: