Article

Dispelling DMS Myths

October 2006, Auto Dealer Today - WebXclusive

by Jeff Smelley - Also by this author

In a simpler time far, far away, computer and software choices were fewer, prices were higher and the average dealer could still operate on a manual system. In today’s world, promises abound, prices approach commodity levels and customer service may be a thing of the past. It appears all the rules have changed, and it’s difficult to tell where value exists in the kaleidoscope of technology offerings. However, a clear image appears when you look below the surface.

Myth # 1. An F&I program is a DMS.

F&I software by itself does not constitute a Dealership Management System (DMS), despite many claims to the contrary. An F&I software product will help you manage inventory, complete sales transactions, provide sales reporting and be more professional, but, these things represent only a portion of your total dealership operation.

Bills must be paid. Expenses must be managed. Payroll has to be prepared and tax deposits must be made. All the while, management must be on top of all of these factors and more to produce a profit in today’s market. In other words, F&I is only a part of the game. Sales Management is a better term for an F&I program. F&I is an important part of your dealership but still only a part of the whole dealership. Therefore, F&I software is only a part of a DMS, just as an engine is a part of a car and not the entire car.

Myth #2. Accounting is accounting, and any program (i.e. Quickbooks™, Peachtree™) will do.

Dealership accounting has unique characteristics that cannot be properly performed by generic accounting software. Vehicle by vehicle, cost accountability, tracking DMV fees, lien payoffs etc. by stock number and being able to verify these by deal are not features that exist in a one-size-fits-all accounting program. Many dealers are attracted by the low price of these off-the-shelf accounting programs, and to be satisfied with the results you receive from them is to have low expectations. A DMS must have accounting designed to be effective in handling the unique business requirements that are found in your dealership.

Myth #3. Support should be free or a minimal expense.

Quality, speed and price are still the three major components of service. Which two do you want? If it’s cheap and fast, it probably lacks quality. If it’s cheap and good, it won’t be fast. And finally, if it’s fast and good, it won’t be cheap. An important part of support is continuing education for your users. When a problem or question exists, it is the best time for your staff to learn more about your system and therefore use more of the features available to the benefit of your dealership. Your vendor must be profitable to remain in business, just like you. Therefore, the support effort you receive will be commensurate with the compensation your vendor receives. You get what you pay for.

Myth #4. We don’t need much/any training.

Personnel training is the most overlooked, undervalued function in most dealerships. New employees are hired, assumed to know what to do and then do it. Training should consist of more than just the mechanics of the software. You want to know how information flows throughout your dealership from each activity, how to integrate your new functionality into your daily routine and, most importantly, what new information is available and how to use it to better manage your dealership. Initial training will not teach you everything you’ll ever need to know about your DMS, but it will give you a solid foundation on which to build. Training on a new software system often requires training personnel on how to perform their job prior to training them on using the software that assists their job.

Decoding these myths should prepare you to make appropriate choices when evaluating software systems for your dealership. Price is the least reliable factor on which to base a decision. I never believe in spending more than is necessary in any acquisition, but spending less than necessary will always prove costly.
 
Vol 3, Issue 8

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