Dealership Software: Separating the Facts from the Fads
Oct 15, 2008
The automotive business is changing for both new car dealers and used car dealers
alike. Margins are shrinking and there is an emphasis on increased efficiency, not
just to maintain profits, but to survive. In recent years many firms have begun
to market dealer software. But the real question for most business managers is:
“How do you determine whether automotive dealer software will deliver on its promises?”
When looking at auto dealer software it's important to evaluate the biggest claim
first: It will reduce costs. This is not just a function of the software but also
of the automotive dealer personnel. Do they want to adopt car dealer software as
much as management does? The better automobile dealer software solutions make it
easier on your staff so that, beyond the initial resistance, uptake is quick. Here
are some key questions to ask: Does the dealer software match with policies and
procedures already in place? Will the software allow personnel to perform better
with less effort? Does the software solve an existing problem that costs you time,
money, or both?
Perhaps the second biggest claim made by dealer software vendors is that it will
give management new information for decision making. Unfortunately, to a used car
dealer or new car dealer evaluating dealer software for the first time, it's often
difficult to tell what is useful information and what information they will be able
to effectively integrate it into management practices. It is easiest to evaluate
when you break down the quality of the information. One of the key benefits of modern
automotive dealership software is the frequency of information. Instead of working
with metrics calculated once a month, some software solutions increase that to daily.
However, in this increasingly information-laden world, it is important to evaluate
what information you actually need. The best software solutions accurately report
only the information you need. Otherwise, too much information can actually be distracting
for management and will reduce dealer management effectiveness.
Finally, one must evaluate the cost of the dealer software. Versus a completely
manual solution, properly designed and implemented automotive dealer software should
pay for itself within 6 months. It is important for any business to be honest, and
realistic when evaluating how quickly the dealer software will pay for itself in
their specific application. Many vendors will provide best-case scenarios in this
regard and it's important to note that the best-case scenario will rarely exist
in reality. With that said, the proper application of technology in the automotive
business can yield spectacular financial and operational results when there is an
excellent match of dealer software, implementation, and dealer culture ready to
adopt a new solution.
Automobile dealer software is not only something most dealers will be asked to adopt,
in coming years it will be a prerequisite for survival. They key in successful implementation
is properly matching dealer software, expectations, and organization for an optimal
outcome. Vendors will not always do this for you so it's important to know what
to look for and what questions to ask of the vendor, dealership personnel, and management.