Replacing a dealer management system can be a huge undertaking, both in terms of cost and upheaval to a business.
Of the dealers AM spoke to, many felt it was too difficult to change their DMS, opting, instead to make the best of what they have. This involves adding in additional software or communicating with the DMS provider to develop something to fill the gaps.
But an online poll hosted by AM found that the majority would change their DMS system if they could. While 29% were happy with how theirs performed (one even gushed that his DMS was “the best thing since sliced bread”), most comments were about poor service and high prices.
The problem of integration remains, with smaller third party companies wanting to provide add-on systems that fill gaps in the market and DMS providers wanting to close those gaps themselves. It has created an industry stalemate with dealers caught in the middle.
Richard Roberts, Trident Garages managing director, said: “I believe the system suppliers have not got enough effective competition to drive down the cost of their products, making their services expensive and lacking the fast-moving development required.
“Given the need to have to link in with multiple manufacturers’ requirements this seems to preclude small fast- moving operations from breaking into the market and making a quality product at an affordable price.”
Integration was the main issue dealers had with their DMS in an AM reader survey published earlier this year. Forty per cent of those who took it rated the integration with third party systems as poor or very poor.
Paul Smith, managing director of iB Management Solutions, said: “The DMS is the master repository for a dealership. However, there are many systems in use by dealers which are not part of or supplied by the DMS provider like courtesy car management, valeting, key management, CRM and numerous other systems.”
Smith believes most DMS providers are not opening up to integration with other systems that dealers need to use every day.
He said: “DMS data is sacrosanct and arbitrary editing of DMS data in third party systems is potentially dangerous. But a considered approach to linking systems has a clear benefit for all. The dealer would benefit, the DMS would benefit and all at very little or zero cost to either party.”
While some dealers and third party suppliers might be quick to point the finger at DMS providers, companies like Pinewood are adamant that integration is a top priority.
Neville Briggs, Pinewood managing director, said: “It’s absolutely vital to dealers to be able to deliver a superior service to customers and we’ve been working for a long time with our customers and manufacturers to make sure systems are integrated.
“We’ve taken a different approach to integration in that we don’t charge manufacturers for integrating. We have a business development team that is assigned to specific franchises and it liaises between the dealer and the manufacturer to make sure new initiatives are integrated correctly.”
If a dealer has a problem or needs something to be developed which isn’t provided by the current DMS, they can talk to the development team.
But when it comes to third party operators that offer services such as vehicle health checks or courtesy car management software, it’s a different story.
Briggs said: “In the nicest possible way, it’s our goal to put these third party suppliers out of business. If we can’t do a better job, we’re happy to work with them, but we are able to develop solutions for dealers where they need it.”
Pinewood has just made vehicle health check software available through its Pinnacle system for dealers, added free of charge. Many of its customers were using VHC healthcheck software from a third party.
Pinewood added the VHC system to Pinnacle at the end of 2009 and has achieved more than 50% penetration among its dealer customer base.
Briggs continued: “Reports from dealer groups indicate that the additional profits generated by using the Pinnacle VHC are, in effect, paying for or exceeding the entire monthly charge that we make for using the DMS.
“We are expecting many more of our customers to start using the VHC system within the next few months. Many, or even most, who have not done so to date are tied into third party VHC software contracts, but have indicated they will switch to Pinnacle as soon as their commitment ends.”
Gemini Systems, a DMS provider with 2,000 users in the UK, says it has an open door policy with third party suppliers.
Carl Roberts, sales and marketing manager at Gemini, said: “Our door is completely open. We don’t always know all the answers so if there’s another company that’s invented a new wheel, we would be happy to add that to our own offering.
“Our future is absolutely linked to the success of dealers so anything we can do to make them successful we’ll support.”
Gemini also has a VHC system incorporated with its own DMS and said that if there were ever any other features missing that dealers wanted, they would either develop it themselves or work with another company, if the particular idea garnered enough support from customers.
Roberts said: “We’ve set up a forum for all our users to voice opinions on what new software they would like to see. If there’s enough support behind an idea there’s no reason why we wouldn’t develop it.
“We have the luxury of being a relatively small team of 32 people so if we want to make a change to our system we can react instantly. A lot of bigger companies are so massive it’s like trying to steer an ocean liner.”
Logan Naidoo, an aftersales manager at Scotthall Borehamwood BMW before moving to Progress DMS as sales director in February, believes improving CSI scores is reliant on having a good DMS.
Progress DMS works separately from a dealer’s main DMS and is specifically focused on aftersales. The system currently has 100 users, including Sytner, Porsche Retail Group, Peter Vardy and Jardine Motor Group. The company is also developing other modules – like a used car programme which it developed for HR Owen.
Naidoo said: “The aftersales department has to be running at 100% absorption in most dealerships to take the slack from the sales department. So it’s important a customer’s pro-gress through that process is monitored closely.
“When I was working as a dealer, I would do everything my manufacturer was asking of me to raise our CSI, but quite often there wouldn’t be a big enough improvement for the amount of effort we were putting in. It wasn’t the fault of the people in the dealership; the tools just weren’t available to make the process for our aftersales customers as smooth as it should have been.”
Naidoo said his dealer background helps him understand the frustrations of his customers when it comes to DMS. He said: “There was always a constant frustration when I was working in the dealership when the DMS would only take you so far in the process and then it would just leave you stranded.”
Dealers are often at the mercy of their manufacturer when it comes to which DMS they work with and what additional systems are preferred. Naidoo said it was manufacturers that had the potential power to drive through changes for dealers.
Naidoo said: “A dialogue needs to be opened and we need to get the industry talking about this problem.”