Looking into the dealer management system future
June 8, 2009
Filed under Features
By Neil Pascale
The manufacturer of the popular BlackBerrys shipped nearly 8 million units in a recent fiscal quarter. Its main competition, Apple’s iPhone, sent close to another 4 million units to the market during a similar time period.
Clearly the user-friendly smartphone is becoming more entrenched in the business world and that’s why some powersports industry experts view it as tied to the future of the dealer management system (DMS).
Mobile technology was one of the subjects brought up by executives of DMS companies as they discussed the likely areas of future development for the principal dealership accounting system that has been evolved into so much more than a P and L provider.
Besides better adapting to match the current mobile technology, where else is the DMS headed to in the near future? DMS executives interviewed by Powersports Business pointed to several areas, including ways to take further advantage of the Internet and becoming a better resource to guide business decisions.
“Dealers in the powersports industry look at a DMS and they think of it as something that’s going to help or control their parts inventory or do F&I or write a repair order,” said Laurn Rice, general manager of ADP Lightspeed, believed to be the industry’s DMS market share leader. “And really when you get down to the basics, that’s what a dealer management system is. But it’s not what it should be.”
Rice believes the DMS should become more of an informational hub that can help shape dealership policy and buying decisions. Although standardization obstacles have to be overcome to reach the desired level of information flow, there are plenty of essential industry data areas that could be dove into once that happens.
“What if we could show you right on the (DMS) screen what the national averages are for margins on a part?” Rice asked.
Or, how many parts invoices on an average day an average parts department is running in a particular region? Or what the national average is for how many sales per square foot an average dealership is doing?
“We want it to be an informational portal, more than just something to help you invoice a part and know how many I sold in a day,” Rice said of the DMS. “We need to streamline that more and more for the customers, for suppliers, for the OEMs.”
That type of national data flow already is occurring in the auto industry.
“In the auto industry, you can tell what accessories are selling, what competitive cars are selling for in the same category,” Rice said. “All of that information is out there to help the supplier, the dealer, the OEM all make better decisions on what they’re going to market, what they’re going to stock. But it’s really not available in the motorcycle industry.
“We have all that information, but I think people are just now starting to understand the value of it like they do in auto.”
Dennis and Jeff Haefner, owners of DMS provider Ideal Computer Systems, both see standardization as a vital topic for the DMS in the future, noting the Motorcycle Industry Council’s Partners Standard Protocol (PSP) system in particular. PSP has been a collaborative industry effort to standardize data exchange between dealers and suppliers over the Internet. A couple of national distributors, including Helmet House and Custom Chrome, have linked with PSP, which allows dealers to submit parts orders and perform pricing and stock checks from within any PSP-certified DMS.
Dennis Haefner believes more OEMs are getting involved in standardization efforts as they seek to increase their companies’ amount of just-in-time vehicle manufacturing. “The manufacturers want more understanding of what inventory the dealer is moving,” Haefner said.
Rice of ADP agreed, noting Harley-Davidson has started a program called Collaborative Inventory Management that allows it to more closely monitor its dealers’ stock. But Rice notes the goal of automating data flow isn’t just one for the OEM to consider.
“How do we make the flow between the DMS and whatever third party — the bank, OEM or aftermarket supplier — back and forth better so that better decisions can be made, and made quicker?” he asked.
Part of the DMS’ future role in the dealership will be tied to an increasingly amount of tasks that can be done over the Internet, says Jim Phelan, co-owner and vice president of DMS provider c-Systems Software. Some of those online tasks include e-mail marketing and
creating a paperless office environment that relies on databases rather than files and folders.
“We’ve been trying really hard to leverage the benefits of the Internet,” Phelan said, noting his company is working on developing a system of e-mail and text messages that would automatically be sent from a DMS to a customer when their ordered part or accessory arrives or when their vehicle is done in the service department.
“The best thing we can bring to the table as a business system vendor is improved efficiencies so the dealer can provide better customer support on his side and we can help reduce his manpower costs by providing those efficiencies.”
Toward that end, Phelan notes an inventory and stocking device that has been used in other retail sectors: radio frequency bar coding. The radio frequency allows inventory management to be done with a scanner rather than the current, more time-consuming approach of counting products stored in bins.
“You just walk around with a scanner that is picking up all of these signals and you can inventory a whole store in about 10 minutes and know exactly what you have,” Phelan said. “I think it holds a lot of promise. I would like to see more acceptance of it and I would like to see it move along faster just because it eliminates a lot of manpower required in the dealership.”
Technology also figures to play a huge role in how much the dealer principal or general manager is able to access the DMS from outside the dealership. Jeff Haefner of Ideal says the current hardware, including the smartphones, is not very user-friendly for many DMS systems. That, as well as other aspects of the DMS, figure
to improve in the near future thanks to new technology.