In an attempt to organize their business, cut down on staffing levels and better maintain inventory, most dealers have employed a dealer management system at their stores. However, simply having the system in place isn’t going to make a business much better than it already is.
Dealership staff has to work to learn a system and embrace the tools that work best for their unique store. Jim Phelan, owner and partner of c-Systems Software Inc., estimates 80 percent of dealers aren’t using their DMS systems to its fullest potential.
To optimize the investment into a system, dealers need to make a commitment to the DMS, have staff fully trained, use the appropriate functions and track updates.
Commitment and training
“Any time you’re implementing a system, it takes management’s commitment,” said Kris Denos, director of development for ADP Lightspeed. “Through the years, I’ve seen dealers that have done better than others, and one of the biggest factors in that is commitment from the upper management.”
A DMS system is an investment and usually takes time to set up and implement. Experts say it’s important that the staff, especially management, learn how to use the system correctly from the start to optimize use.
“Technology is as difficult or as easy as the user wants to make it,” said Pete Rassega, vice president of CEO of nizeX Inc. “The same technology, some people love it, and the same technology, some people hate it, and the difference is one person learned how to use it correctly and the other one didn’t.”
If dealerships don’t learn the system early, it’s likely they will become frustrated and revert to old practices.
“Dealers get really busy, they don’t have time, they don’t understand something or they don’t call you to tell you they don’t understand something, and they just adapt to some crazy off-the-wall process,” explained Glenn Hancock, president and chief information officer at nizeX Inc.
They key to perfecting the system is training all users. Each staff member should be properly instructed on using each aspect of the system.
“Most dealers do not effectively train their personnel in the use of their DMS. It is false economy to scrimp on a training budget,” Phelan said. “Employees that are well versed in the operation of the DMS are more effective, efficient and make fewer mistakes. Those same employees are able to service customers better, and satisfied customers return to purchase again and again.”
Nearly everyone on a dealership’s staff should have access to some aspects of the DMS, experts agree. A few exceptions can be made, such as for technicians or delivery drivers. However, those positions might require access if no one else is completing data input in their place.
“Not everyone in the dealership has to have access to the entire system, but I think everyone touches a piece of it,” said Dave Baumgarter, lead trainer at Ideal Computer Systems.
Most, if not all, DMS systems have security features in place that give users access only to areas under their authority and keep unauthorized users out of other areas.
Each function built into a DMS system is provided for a reason. Common pieces include accounting, F&I, inventory control and purchasing, point of sale, service, receivables, payables, payroll, and customer relationship management for some.
“If you’re really a full-service dealership, and you’re doing all these functions in your dealership, you really should be using all these modules,” Denos said.
Though each part is important, some are essential to master. Many experts agree that the most important tool is the accounting piece.
“That accounting piece has to be perfect in order to give you that information you need to run your business,” said Dave Yeargin, director of sales for Ziios Inc.
A properly used accounting system will better allow dealers to make critical decisions regarding the business. Though the tool is of utmost importance, many dealers worry more about manipulating numbers to make the bottom line pan out, rather than accurate reporting. Improper inputting can be extremely hazardous to the business.
“Due diligence must always be done to insure reporting results, efficiency and profitability are not adversely affected,” Phelan explained. “It does not matter how well designed the DMS may be — if the operators of such systems are lazy with their processes, a perceived profitable business may rapidly become bankrupt.”
Another very important piece is parts inventory. Parts have to be carefully tracked, so product doesn’t disappear or sit on a shelf for too long.
“No part leaves a bin, a wall, a shelf without being on an invoice because otherwise you have a greater chance that product is going to leave the store without being paid for,” Baumgarter suggested.
Inventory must be closely monitored and tailored to a dealership’s current needs. If that piece isn’t kept up to date, a dealership could overstock or understock product.
“One of the mistakes I’ve seen dealers make is they get themselves in an overstock situation because somebody sold one of something, and they think they have to order five,” Baumgarter explained. Not knowing what is selling or what is not selling might have a dealer ordering too much or too little of any given part.
F&I modules also rank high in importance for dealers that have a strong F&I business.
Along with learning the standard tools, dealers should also keep up with updates in their DMS. Service providers are constantly working to improve their tools, and many provide updates that range from minor additions to complete system overhauls. Paying attention to what is coming up or what tools have already been added is important when trying to optimize the use of a DMS.
“I would say that keeping up to date on the changes of your DMS and being aware of what your DMS offers you, it’s something you definitely want to keep tabs on because your system might alright have what you’re looking for,” Denos said.
It’s vital to learn exactly what a DMS system does in order to make the most out of it. Especially for longstanding dealers, that can be a challenge because a DMS system changes the way the business has been run. A DMS system, especially when used correctly, has an abundance of benefits. It’s essential to learn what those benefits are and how to implement them into a dealership.
“In this particular day and age — kind of challenging economic times — the need for access to the information from within your dealership is more important than ever,” Yeargin said. “These businesses are very competitive, so the need for correct data and to be able to access that data real time is more important now than ever before.” psb
Copyright 2011 Powersports Business