Are You Imprisoned by Your DMS?

Are You Imprisoned by Your DMS?

By Michael Trasatti, CEO

In today’s 20 group meetings, in circles, while attending a new car showing, and just about anywhere you go, dealers are talking about their DMS provider. Even DMS providers seem to be talking about each other, sometimes benignly, other times with soft-malice. And finally, it seems DMS providers today, as I read the litany of articles, want to offer advice on how to run your business.

I certainly don’t want to assume that we as DMS providers know the car business better than our clients. But I have been around the car business most of my life, and specifically the DMS landscape for nearly 20 years. With all this chatter in the air, one element seems to ring true: making a DMS change is scary to dealers, afraid, if you will, of the disruption or change; ‘what will it do to my business?’

Perhaps a good analogy is a story by Charles Dickens about a man imprisoned for many years. He longed for release, hating the confinement and conditions he endured. Eventually, it was his release day. However, as the prison guard chaperoned him out of the gates, the man observed all the changes that had occurred while he was imprisoned. Confused and scared, instead of running towards freedom, within minutes he returned to his prison cell. This man had become so comfortable with his environment that the concept of being free scared him. He felt safe and secure in his imprisonment.

Does this sound familiar when it comes to the subject of your DMS?

DMS services have evolved over the past several years. While it is indeed an undertaking that needs careful and strategic consideration, there is a general feeling that more dealers are evaluating these new options in the marketplace. Choosing the right DMS partner for your dealership is essential. When evaluating this change, it certainly needs to be for the right reasons.

Here at DealerBuilt, everyone is hands on. We are also really passionate about helping others. To that end, I have compiled a few observations based on our experiences and interaction with dealers who made the change.

1. Do you or the dealership want to make a change? What are your goals? Change is hard sometimes. But it can be absolutely rewarding in the end. However, change requires a reason, a goal, an outcome. Dealers who want a short-term fix, for example, might want to reconsider if making a switch is right for them. For those dealers with a purpose, whether it’s being less captive to a provider; seeking improved innovation; or a need to modernize; going into the process with a goal will prove fruitful.

2. Is the dealership ready and committed to change?This is probably the most crucial point – When you go down this path that commitment has to start immediately. It should be ingrained in the mindset of all concerned that you are going to go through this exercise, spending time and energy to make a better organization. This is a complicated task, rather like surgery, but will lead to long-term improvements. Complete buy-in is necessary from every department in the store. Management for each department needs to understand why this change is being made and be on board with it.

3. Evaluate what is out there. Discover what exists in the marketplace. Going into this with the right mindset and expectations is essential. Ideally, you should look for a DMS with a friendly business model at the price point that fits your budget and the size and unique complexities of your dealership or group. Sometimes, the most popular ones may not be the best fit, so having an open mind is imperative.

4. How do you choose?Study your dealership and gain a full understanding of your unique needs. Conduct an internal evaluation process across all disciplines and choose a partner based on your dealership’s long-term vision and direction. Don’t be concerned about merely saving money. Instead, evaluate based on if the DMS provider has your best interests in mind and can improve your processes. Another consideration is how well the DMS provider integrates with other vendors that your dealership currently uses or may use in the future. Is the provider open to new integrations as new technologies develop, or will they make those new technology vendors jump through hurdles?

Investigate each DMS to ensure it is validated. Explore the scale and depth of its functionality and that it has the flexibility needed for your dealership to operate at the highest possible level, especially with more complex groups.

Pay attention to how pushy the provider is about their terms and conditions. A DMS provider should be open to listening to your needs, as well as open and honest about what it can and cannot do.

5. Commit. Once your dealership has management buy-in, has evaluated its unique needs and selected the DMS, the commitment to the new DMS should start immediately.

It is vital that everyone in the dealership be on that same page. Employees should understand that, while this change will be a bit like surgery, and something everyone will need to spend time and energy on, the end goal is to make the dealership a better and more efficient organization. They will soon be able to respond to customers in a better fashion, create better processes and modernize their technology. In the end, this will make them more profitable as all things will look, feel and operate at a higher and more efficient level.

Sure, it’s a lot of work and a significant change. But, if done right, a DMS switch shouldn’t be something to be afraid of, but rather something to look forward to. The DMS is the lifeblood of the dealership and vital to its operation. Make sure you have the right one, a real partner that helps your dealership grow to its full potential.

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