Tuesday, January 3, 2017

Ranking Dealer Management Systems, (D.M.S.) in 2017

One area of our industry that is definitely moving at a high rate of speed going into 2017 are Dealer Management Systems, or often times referred to as the "D.M.S." System. The options are growing and the competition is increasing more and more each day.

Recent articles and blogs by Automotive News and MotiveRetail.com agree that competition between D.M.S. vendors and providers has skyrocketed over the past few years and will continue to grow well into 2017 and beyond.

Both Toyota and Nissan have committed to expanding their D.M.S. network providers from two up to eight over the next few years. Like other manufacturers, both Toyota and Nissan are now seeing the need for more support integration to reduce overall dealer cost and to better support their dealer base with more options.

For years, we have basically seen just a couple of options, or choices as to which D.M.S. provider dealers ultimately ended up with. Not surprisingly, their choices were either Reynolds & Reynolds or ADP, now referred to as CDK, even though there were a few other smaller D.M.S. companies available.

The difference today is that technology has expanded to a point where dealers are looking at these other options even closer. Now, it appears that Reynolds & Reynolds and ADP/CDK aren't the only ones out there that can provide all the necessary applications for all dealer departments.

Most importantly, dealers now have better pricing and contract options without feeling "locked in" to any one vendor for long periods of time. High monthly fees, costly updates, hardware costs and lack of support are common concerns that have existed for years.

Some of the main reasons that dealers have put up with being "locked in" are fear of change, interdepartmental system preferences and accounting integration. Once a system has been in place for years, dealers tend to shy away from starting all over again along with the ramifications that go along with a major system change.

Before we  get into the "ranking" of today's D.M.S. Systems, let's take a look at who the "players" are in this industry verses just a few years back. It's not just a one or two player field anymore as there are at least six, in my opinion that are in the game now and one in particular that is moving up the ladder at a high rate of speed.

As I mentioned earlier and not to anyone's surprise, Reynolds & Reynolds and ADP/CDK have been industry standards when it comes to choosing a D.M.S. System that offers all the necessary applications in the areas of Accounting, Sales, Parts and Service Department Operations. Both have pretty much "perfected" their programs to the utmost in efficiency and usability.

In my opinion though, both have failed to stay up on technology, especially when it comes to updating existing programs and applications to today's Windows based technology. Even though Reynolds & Reynolds introduced "Ignite" and ADP/CDK introduced their version called "Drive", they still have not fully disconnected with their older operating systems.

Even though both "Ignite" and "Drive" have been out there for quite some time, I still see Fixed Operations personnel using the Reynolds & Reynolds "blue screen" and ADP/CDK's "green screen" almost 100% of the time. For those not familiar with this terminology, it just basically means that users prefer using their old screens instead of the newer Windows based option.

So now!....Let's meet the "New Players" in town!

The first two D.M.S. providers, other than Reynolds & Reynolds and ADP/CDK that I want to mention aren't really new to the game, but have been gaining market share over the past few years are "AutoMate" and "AutoSoft". Both have found their way into more dealers primarily due to dealer cost savings over Reynolds & Reynolds and ADP/CDK.

Keep in mind during all these D.M.S. Rankings, I will be measuring how each system stacks up in the areas of Parts Inventory Management and Service Applications, even though I will be making comment here and there when it comes down to Accounting Integration and overall efficiency.

In my opinion, one of the biggest advantages to AutoMate and AutoSoft coming into the marketplace was a more "user friendly" application system. Both seem to very easy to navigate through applications with easy to follow menus with Windows Bases "Action Buttons". Compared to Reynolds & Reynolds and ADP/CDK, this made it much easier for new users to adapt and learn D.M.S. applications.

On the other hand, what these two systems did lack, in my opinion, was the "in-depth" application software and options in the parts areas of set ups and controls, source ranking by piece sales, days supply options and matrix escalations.

In the area of service applications, I also felt that even though both are very user friendly for Service Advisors to navigate through the repair order process, both AutoMate and AutoSoft seemed to have limited "customized" reporting options for management to track overall productivity, sales and profitability.

Actually, even though Reynolds & Reynolds and ADP/CDK have the edge, in my opinion in these areas, all D.M.S. Systems out there need to do a better job providing more "customized" reporting options on "drilling down" specific areas related to parts and service applications.

The reason for my opinion is if D.M.S. providers were doing a better job in the above mentioned areas, there wouldn't be so many other vendor companies out there providing these customized reports and "drill down" options for dealers.

This is why so many of these outside companies need to acquire "Incription Rights" from various D.M.S. providers in order to gain access into the dealers' D.M.S. System. Once into the D.M.S., these outside vendors can provide dealers the information and reporting options needed to manage their Fixed Operations. 

Many of these outside companies specialize in follow up programs, specialized reporting options, marketing and other various retention programs. Most importantly, they provide dealers and managers information in a moments notice without having to spend time building these specialized reports and programs on their own D.M.S., if available in the first place.

Another player that has entered the Dealer Management System market is a company called "Adams". When I was first introduced to this D.M.S. System, I was pretty skeptical, as I'm pretty sure anyone else would be as well when diving into a system pretty much unheard of.

Although, from a parts perspective, I was pretty impressed as the Adams D.M.S. System allowed for most, but not all the necessary applications needed in order to manage a parts inventory. Keep in mind, every one of these systems are being measured up to our industry standard systems like Reynolds & Reynolds and ADP/CDK.

On the service side, the Adams D.M.S., much like all the others, can manage through the service repair order process, but once again, lacked the "in-depth" management reporting applications that, in my opinion are necessary in managing the service department.

Items such as op code utilization drill downs, technician productivity, exception reports and sales and gross analysis are very basic at best. Once again, side by side against Reynolds & Reynolds and ADP/CDK, a lot more to be desired.

The more I get familiar with these "new guys" in the D.M.S. provider market, the more I see how price and contract options are playing into the dealers' ultimate choice in which provider they choose. It seems that more and more dealers are willing to give up a little here and there as far as how "in-depth" a system can be versus the overall cost of the system.

The last Dealer Management System that I want to include in my "Top Six" is not last by any reason. In fact, I believe this system is by far one of the newest and biggest players to go up against all the others. This new D.M.S. System that's taking the market by storm, in my opinion and that system is DealerTrack.

When I was first introduced to DealerTrack a couple of years ago, once again, I was skeptical, as I am with any new system out there. Knowing what a "good" D.M.S. System should provide, especially in parts, service and accounting. Once again, another new system and lots of questions to be asked. 

In the beginning, in my opinion, I felt that DealerTrack had some great "basic" applications that I thought were at first, user friendly and second, state of the art technology that would take us away from those old "green and blue screens" days that most of us grew up with.

Although, what they did lack was "research and development", or "R & D", which, in my opinion, is where I lost interest initially. Even though the package looked great, it lacked many of the basic parts and service applications that most "Smart Parts" Readers are accustom to and familiar with.

Fast forward to today, I have had the privilege of seeing the "research & development" of this D.M.S. product grow to what I believe will be the new industry standard going forward. DealerTrack has taken it to the next level in parts, which I'm usually the staunchest of critics as to what a system needs to provide today's parts managers.

In service, I also believe that DealerTrack has gone to the next level in all service applications along with "user friendly" software that doesn't require service advisors to take tests, or on line tutorship's in order to navigate the system while trying to build customer relationships, which should be the primary goal for service advisors.

Their management reporting functions are "adequate" when comparing to other D.M.S. Systems. Although, I believe all D.M.S. providers need to do a better job by making it easier for managers, spending less time building reports, and more time managing the information on the reports.

All of the D.M.S. Systems in this ranking provide adequate accounting integration software and applications, with the exception of a couple areas of account security. By this, I mean that some of the accounting integration set ups have to be initiated in various parts and service applications, as opposed to being initiated and controlled in the accounting functions. All above mentioned D.M.S. Systems are guilty to some degree in this category.

Even though there are other D.M.S. providers out there and more coming on board, in my opinion, these are the top six that are most widely utilized in automotive dealerships today. Choosing the top D.M.S. depends on the individual dealers needs, size and various applications.

I do know that overall cost and contract terms have been a leading reason for more and more D.M.S. providers coming into the market. Competitive pricing and comparable, available applications definitely gives the dealer more options in choosing their D.M.S. provider. More importantly, for the industry, it will eventually lead to better product applications and even more competitive pricing.

Overall, my preferences as to which D.M.S. provider is leaning towards the future after seeing what these newer providers are offering, especially DealerTrack. After working with all the above D.M.S. Systems and growing up in this business a Reynolds & Reynolds advocate, it's time to open my eyes to change and new innovation.

All of these providers are working diligently with the manufacturers to provide dealers better products with better support integration. Other affiliated vendor acquisitions by Reynolds & Reynolds and ADP/CDK will also provide newer and better software applications related to customer follow up and customer retention.

Once again "Smart Parts" Readers!...we have a lot to look forward to in 2017 and the options for dealers are expanding with better technology at competitive prices. In my opinion, it's time to "get out of the box" in 2017, instead of just "thinking outside of the box"....

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTMThe only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com