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IT Inisght: Apathy costs money

Too many retailers fail to consider the importance of IT because they spend all their time focusing on selling cars. This lack of prioritizing means they miss out on big savings and improvements in operational efficiencies.

The biggest issue, according to Derby-based Net-Instinct, is persuading retailers to spent a bit of money in order to benefit from cost savings that can, in some cases, be immediate.

The company, which specializes in IT cost reduction and DMS consultancy, counts Drive Motor Retail, Bristol Street Motors, Sky Ford, Pentagon Group among its clients. The company’s services include supplier negotiation, cost reduction and profit improvement, and invitation to tender documentation.

Speculate to accumulate

Director of Net-Instinct, David Brown, says apathy and resistance to change could be costing dealers thousands. “There are some enlightened people out there, but too many are busy worrying about selling cars to prioritize IT savings,” he says.

One of the biggest challenges facing a company such as Net-Instinct is dealers’ reluctance to spend money in order to ultimately save it. Brown says: “We charge £450 for a visit and say if you don’t save at least three times that, we won’t charge you. But still, take-up can be slow.” In a recent visit, the company identified savings of 18% to be made on the client’s existing IT budget, yet in the end the client didn’t implement one of the money saving changes.

One group that does recognize the value in re-assessing its needs is Drive Motor Retail. By improving its IT network infrastructure, Net-Instinct has saved the company £60,000.

Paul Manning, Drive managing director, says: “Net-Instinct has been invaluable in assisting our management to implement these systems with the minimum of disruption. The cost savings achieved through focused specification and negotiation have, so far, outweighed the costs.”

Find the time to save money

Douglas Day, chief executive officer of Day Computer Corporation, has worked within the UK Automotive industry for 20 years. The company provides quality computer hardware and telecommunications solutions from the major hardware manufacturers and telecommunications providers. Its client base includes large plcs and mid-size franchisees.

Day feels that in a time of increasing costs and reducing returns on investment, dealers rarely look to save money by cutting their IT costs.

He says: “Computer hardware and telecommunications are now the glue that holds car businesses together. It doesn’t matter if you are a huge, multi-million pound plc, or a single site dealership, there are large savings available.”

One area where substantial savings can be made is computer hardware. However, don’t be tempted to buy the cheapest – nor necessarily the most expensive. “Identify a ‘work horse’ unit that will provide longevity. If you buy cheap, you’ll be replacing it inside of 18 months,” says Day.

The industry standard PC is 3.2+ GHz, 512mb RAM, 80GB hard drive, dvd-rom, Ethernet, Windows XP Pro, with a three-year on-site warranty.

#AM_ART_SPLIT# Take independent advice

It is not necessary to buy the server brand or model recommended by your DMS provider. Seek independent advice on specification and performance versus price, and always obtain special bid price discounts independently.

Another way of saving money is to always buy networked workgroup laser printers, whether they are black and white or colour laser. Day advises that most quality laser printers are inexpensive on bid, and are either Ethernet or wireless enabled. However, it is toner and ink where printer manufacturers make their money.

Day says: “Most dealers continue to ignore their printer spend. Think about how much paper you print daily, weekly, monthly, year-on-year. The costs, (and savings potential) are huge.”

Cost savings for Pentagon

Andy Flinn, group financial director at Pentagon, says: “We employed Net-Instinct with the emphasis on cost reduction, connectivity of our data and comms, and also DMS. The strategies saved us money and gave us an area of best practice to compare against other retailers.”

Flinn says that not only were there initial savings, but as the group has acquired subsequent sites, it has implemented the previously identified strategies, and saved money as result.

Save money on phone bills

More than ever before there are massive savings to be made on dealer telephone bills for voice minutes, says Douglas Day, chief executive officer of Day Computer Corporation. The telecoms companies continue to offer better and better voice tariffs; but be careful, a large amount of dealer calls will be made to mobile phones.

A cheap headline tariff is not the whole story.

A comprehensive billing evaluation and price comparison should be done by every dealer, again. Also, there are large savings available on WLR (Wholesale Line Rental).

Another potential saving is VoIP (voice over internet protocol), or internet calls. However, VoIP is a longer term, strategic telecoms decision, and the savings occur over time. This is more suited to multi-site operations.

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