DMS Shopping Considerations; May Your Heart Transplant be Successful!

If you needed a heart transplant wouldn’t you research like mad and pick the best surgeon? Well, when it comes to systems at your dealership your DMS is really the “heart” of your business. While some may think of the DMS as perhaps “boring,” it is far from it. It is the lifeblood of any dealership, connecting everything and pumping important information through all departments. So, when it comes to replacing your DMS, believe me, a heart transplant is a good analogy. If you haven’t experienced it yet if I were you I would check with other dealers to see what they went through. And then, my top piece of advice is to choose wisely for your dealership’s unique needs —  not every DMS is created equal.

I often get asked what dealers should look for when considering a DMS switch. Here are some tips that may help from my many years of experience in this field:

  1. Warning – This could Hurt! Study your dealership and your exact needs and wants when it comes to a DMS. Take an in-depth look at how your current DMS is performing as it is important to know where you stand. Many dealers overlook this important first step and want to trash their current DMS without really taking a good look at what they have. Do an audit of the current DMS provider’s bill. This may be the first time it has been reviewed since contract signing, perhaps as much as five years — and a quick warning – it may be a little electrifying, to say the least! Take a look at items you use and those that you don’t and any related costs. This cost inspection can also help you cut items from your current DMS bill such as an unused module. It can lead to negotiation for significant cost reductions with your current provider.

Take a look to see if you have access to your own data or if there is a cost associated with this. In some cases, dealers get a complimentary zip file of historical DMS data at the initial conversion and after that, you pay for it — and believe me these costs can add up. If you have multiple rooftops and participate in a data-sharing program you must look at those costs per rooftop. It is helpful at this stage to nail down and include that cost in your margins so you truly know the cost to keep your current DMS or transfer to another system. The hidden data costs can be significant and it can be a vicious cycle as your DMS can cost more for every piece of software and there can be hidden costs for every system not visible in the price quoted.

Once you’ve audited out excess costs, be wary of enticing discounts offered to renew your DMS contracts. This also applies to discounts offered by a new vendor. These sign-up incentives tend to be for a short period and then lead to price increases and additional charges that erase any discount.

2. Look Don’t Listen Do some competitive site visits and don’t just listen to referrals. Find a dealership with a similar setup to yours so you can study the pros and cons in a working environment from the viewpoint of a real user.

3. Extendibility How effectively does the DMS you are looking at enable your business to be extended to other vendors? A closed ecosystem can make it very difficult to share data. What restrictions does the DMS have for data written to the DMS, not just read from it? Be sure to take a deep dive on this and not just accept what the sales guy tells you about the various APIs and how they can share data. Are there keyword or data sharing restrictions? When evaluating the various systems this can be an important differentiator and a significant cost factor when it comes to inputting and exporting the data as you need it.

4. Mobile-Friendly Can you access the DMS from other locations when you are away from the store? It is important to have mobility so you can do business wherever you need and want to do business – not just at the store.

5. Security It is one thing to be flexible and quite another to ensure you are well protected from the threats of modern cyber security. What protections are in place with the provider? What level of encryptions and level of security do they ensure?

6. System Flexibility. You may want some flexibility of choice for your preferred installation technology stack. Can you choose to manage and control your tech stack? Do you hand over security and control to your vendor, or do you host it in the dealership? Know what YOU are comfortable with. If you chose to have all the equipment and servers in a closet in the dealership then you have to be responsible for security. What choice does the vendor give you on this and what do you want?

7. Ease of Use As dealers we regularly deal with turnover. There have been a lot of revolving doors, especially lately trying to recover staff after the shutdown. How quickly can users get up to speed with the DMS? Some legacy providers still use dated green screens with a lot of awkward tabbing to access data and no real modern controls. Some are more modern with a mouse and a windows-like environment. These differences resonate with employees who have grown up with computing. It can be hard for them to adapt to the old school computing environment some systems demand.

8. Enterprise Capabilities. If you own more than one franchise research how well the DMS allows you to manage each individual store as well as the overall group. Be sure to evaluate any related costs for each store and across the whole group so you can run two separate businesses and do that well. Can you efficiently add new dealerships to the system as needed? Ask probing questions that apply to your unique setup. such as, “I have 5 locations, how can I review data across all locations or make intercompany transitions effectively?” When it comes to enterprise functionality, not all systems are equal. A notable factor to consider is how can a system grow to accommodate multiple businesses and be managed at an enterprise level. You may not want to manage eight separate accounts but have a grouping for common customer and financial records, etc.

In summary, do your research and pick the right “surgeon” for your DMS heart transplant! Or the smartest decision may well be to stay with your current provider. The DMS marketplace is more dynamic than ever. While you have more choices, this means more possibilities for pitfalls, particularly if you don’t do your research on all the pros, cons and associated costs. A successful DMS change depends on the amount of prior research and planning as you decide on what is the right system for you. To your success!

By: David Crawford

VP of Sales DealerBuilt

david.crawford@dealerbuilt.com

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