For many years, a major DMS provider would sell their system on the claim that if they switched to their system, a dealership could reduce office staff by 50%. The latest claim that’s been going around has been if you get an ASP solution, you can get rid of your IT department.
Since DealerTrack is one of the most popular ASP solutions, I decided to ask DealerTrack’s Jon Reese about IT departments and their involvement in DMS services.
When asked how involved should the IT department be in maintaining the DMS, Jon responded, “Jim Collins, the author of Good to Great, explains that good companies become great by focusing on what they do best. The same is true with a car dealership. Dealerships should focus on what they do best, selling cars, and not be required to spend time and resources supporting an IT infrastructure needed to host, maintain and update their DMS system. If a dealership focuses on what they do best, selling cars, and employs the DealerTrack DMS to assist them in the management of their operation and workflow, they could potentially eliminate all of their IT department expenses. DealerTrack’s web-based DMS eliminates the need for servers, expensive hardware, continuous software updates and that on-call guy needed to keep things running smoothly. All that is needed are computers and Internet access.”
I agree with Jon, that a web-based solution can remove many server headaches, especially if you’re involved in a flood, hurricane, earthquake, fire, tornado, etc. But, before you start firing your IT department because you’re getting an ASP solution, consider the fact that we do need computers for more than just our DMS. It also seems like every employee now needs a computer on their desk – which is a tremendous load on your IT staff along with all the various software and servers for CRM, leasing, credit bureaus, manufacturers – even many phone systems have a server!
For many years, I have recommended that your IT department be more focused on providing profit generating services, rather than supporting the DMS. You already pay a pretty penny to your DMS provider monthly, so why would you also pay for an IT staff to answer and funnel support calls through to the DMS provider? I can’t tell you how many times I’ve spoken to controller groups that have told me that their IT department requires that all DMS support goes through them.
What are profit generating services? Database mining and database cleaning is profit generating. Nobody knows your database as well as your IT staff. They should be regularly finding ways to use that database to help employee sell and service more vehicles. A good IT department can reduce outsourcing repair costs and find the best buys for the software you need – including your next DMS system.
When I asked Jon about the IT department’s involvement in selection, he replied, “Users of the DMS and the dealership’s IT department should both be involved in the selection of the dealership’s DMS. However, it is imperative that users’ needs be considered first and foremost. Users are more aware of the dealership’s business needs and are better able to evaluate whether and how a DMS meets those requirements. They should ask:
1. Is the DMS robust enough to handle all of our unique requirements?
2. Is the product user-friendly?
3. What type of customer service, training, and support does the DMS provider offer?”
“The primary IT-related factor that requires consideration is the cost to install, maintain, and support the system. Maintenance and support can be an extremely costly endeavor. Depending on the DMS it chooses, the dealership may need to purchase or upgrade its servers and computers, and employ additional IT staff. The IT department also needs to determine whether the system can integrate with other software solutions being used in their sales and service process. Unfortunately, there are several DMS providers that attempt to eliminate integration with 3rd party software providers, in support of their own software offerings.”
I agree with Jon on the movement by some DMS providers to squeeze out 3rd party providers. There were over 100 technology companies exhibiting at NADA that depend on the data from your DMS database to provide you with fantastic ways to stay to sell and service more vehicles. At the 8th Digital Dealer conference this month in Orlando, I’ll be discussing ways to use that database to make money with data mining, so consider sending someone from your IT department to learn how to become more profit focused.