Who to look at? Who to choose? The 10 Most Important Questions When Selecting a DMS Vendor.
We recently had a call from a Dealer who had worked with us previously. He had spent the better part of a year narrowing down his DMS choices to one particular vendor. He called for our help to get a better price and contract terms from that vendor. There was only one problem. His carefully chosen provider could not do the job for him. It became readily apparent that certain issues had been glossed over during the numerous demos and site visits he had endured. Sadly, he was now faced with the prospect of starting again from scratch. He was despondent about writing off the entire year he had spent evaluating and selecting a vendor. This has become an all too familiar scenario as dealers scramble to slash expenses. It’s especially upsetting because we could have saved him all that wasted effort if he had called us earlier! His problem was immediately apparent to us. He was elated we could help him rectify the situation and find the right solution.
Turmoil in the DMS market has apparently allowed some DMS vendors that normally would have gone extinct to subsist. Certainly we believe that more competition is better, but there are companies that have failed to attract the necessary capital and obtain the right factory communications to survive over the long haul. These vendors can only thrive in an economic downturn because dealers, desperate to cut costs, focus on the price and tend to ignore the more important aspects of the decision process. This mindset rarely survives the installation and training stages of the conversion. The dealer, who has to augment his staff to make a system fit, hasn’t really saved much. Indeed, it may cost him in ways he will only realize in retrospect. You may scoff at this caveat but in an industry that has seen the most drastic course correction in its history, could not supply and expansion once again become the retailer’s most significant considerations? Let us help you assess your position and save money while planning for your future technology needs.
This is not to say that all smaller vendors should be avoided. That is definitely not the case. There are several newer players that will survive the lean times and prosper when recovery comes roaring back. They could, in fact, very well be major vendors by the time your next computer contract comes due. Of the thirty or so small companies vying for a dealer’s business, there are some that you may consider. The trick is to know which ones will work best for your operations and vet only the most likely candidates. There is no right answer to the question, “Which is the best small vendor?” Rather ask, “Which vendor is the best fit for my store?” The inestimable variability between retailers makes this a very complex query. Some dealerships run their fixed operations with touch screen laptops and others still use yellow legal pads. Our expertise is invaluable to dealers as they evaluate any type of dealership technology.
Assuming you know the questions, can you interpret the answers? Here’s a primer on the understanding the responses you get from vendors:
- “We’ll have that feature within a few months of your install” This means “don’t count on it”. If they’ll have the feature right after your install and it’s important to you,delay the install for a few months to see if it materializes. On the other hand, if, it would be nice but you can live without it, treat it as a pleasant surprise when if shows up one day. We can usually tell you what’s going to happen before it happens to you!
- “We have a meeting with the manufacturer tomorrow”. Integrated factory communication (DCS) is absolutely vital. It not only protects your cash flow, but it also makes your life more controllable in almost every way. A meeting by itself means nothing. Vendors on the outside regularly meet with manufacturers and they leave knowing that no integration will be forthcoming. Even if the factory says that they are planning on launching integration, you should understand that the lead time is predictably one year to three years if things go smoothly. These negotiations can also fruitlessly fall apart. Because we are involved in almost 40% of all the DMS deals nationwide, we know what is really transpiring. Call us with any questions you may have.
- We can build that for you. Treat this answer like the first one above. Modest companies run on bare bones margins. In the very competitive world in which they manage to survive, the assurance that there are resources to custom build your solution is usually enthusiastic hyperbole, if not actual deceit. This is not to say that you may see a custom report here and there but certain substantive features and aspects of these systems may as well be sculpted out of granite. We usually know the best and most efficient way to accomplish your goals. Call us for the answers.
- Have an exit strategy. We’re reticent to point this out but if your current vendor has a contract with you that has been cancelled because you couldn’t come to terms during your negotiations, you may not get much help switching back if you later realize you can’t make the new vendor work We recently saw a vendor demand a five year no-cut contract at non-negotiable prices to help leave the new vendor and return. When told by the dealer that he just wanted to go month-to-month, they asked him, “What other options do you really have?” He was stuck with a contract he would never have signed if he had a choice. Our presence in so many negotiations leaves us in the enviable position of anticipating these kinds of problems. Let our team help you stay out of trouble.
- Don’t automatically rule out your current vendor. Capitalists rarely run into a competitor and just capitulate. One of the preeminent contributions small companies have made to our industry is they have compelled the former DMS oligarchs to realize that renewals are no longer automatic. They may squirm and squeal but they will often make concessions when their feet are relentlessly held to the fire. Of course, by then it may be too late. Nothing is more frustrating than signing with a new vendor and then finding that you can now suddenly have what you need with your current vendor. It’s never fun to try to cancel an agreement that you’ve already inked. Let us help you decide where it is you want to go and get there in there without all the drama.
- Be hands on – An axiom: Systems will always work during a demo and a site tour arranged by the vendor. See if a system fails you when you put your team at the controls and run through some daily tasks. Does it take 20 minutes longer to generate that report than you’re used to? You are going to be living with this system for the next several years, spend the time now making sure that driver’s seat is really comfortable. We know what works and what doesn’t. Our 5000 clients tell us their real-world experiences.
- Beware of glowing references – We talk at a lot of 20 groups, seminars and conventions. One thing I rarely hear from dealers is all the truth about their vendor choices. We’ve never seen a dealer who stood up to say, “Well I bought a cheap XYZ system and my people hate it. I’m losing money in my parts department. I don’t know what my account balances are and half my staff quit within six months. I really blew this so don’t make the mistakes I made.” We’ve heard those words, just never in front of another dealer. They will take us aside privately to lament their decision. This happens after they have publicly delivered the standard line about their vendor, “It doesn’t have all the bells and whistles but for the price it’s worth it.” Ask yourself, what bells and what whistles? Dealers loathe having to admit mistakes. Does misery truly love company? Maybe they think if they can get enough other dealers to sign up, the vendor will fix the problems? Do you honestly think you will enjoy a system that isn’t wholly ready, carving a new path, pioneering a new direction? Think again. Take our advice and let someone else be the early adopter. We know what dealers are really thinking about their technology. That advantage can be yours also- we’re just a phone call or e-mail away.
- Switching vendors lasts for five years – Be warned that the system you choose will still be around in five years. Forgetting about the money for a minute, it’s the conversions that will kill you. Learning another new computer system is a lot like learning a new language. You may decide to do it but it requires a tremendous commitment. Do you want to do it again soon? Not likely. We hear all the time, “It’s a month to month contract so if we don’t like it six months in we’ll switch again”. This is an absurd statement that’s just patently fallacious. Six months into a conversion you are just starting to really understand how the system works. You’ve corrected some of the errors you made and your data is once again streaming. If you’ve made it six months, you’ll live with the shortcomings. You may hate the system but the chances of you switching again are miniscule. Go back to your old vendor? Want new hardware? Ready for yet another data conversion? Sure, we believe you. We stay with our clients and continue to help them long after the computer deal is done.
- Converting your data – All computer systems handle data differently. Few statements so simple have caused so much misery for dealers. Put simply: the information in your current system isn’t going to smoothly come over to the new system and the data you put into the new system will not go back effortlessly. If this conversion isn’t going to work you better get to the bottom of it within the first few weeks of the process or pull the plug. Be wary of a vendor who suggests that they will “give you all your data” and “you can just put it in the new system yourself”. Double imputing data in either direction is a very excruciating process. Effective vendors will know how to get your data. Our clients don’t get surprised. If you can avoid the pitfalls, you don’t have to deal with problems later.
- Marginal vendors don’t go out of business they just go quiet – We are always warning people to watch who is teaching you a new language. If it turns out to be Sanskrit, it’s going to be a problem. There are definitely instances where small companies that have gone completely out of business but most of the time they just fade away. From our side of the business, the buzz that once surrounded them just subsides. They lose their sales force, their development and support staffs dwindle. Customers find updates are hard to get and support is non-existent. Billing, however, endures. Mailing invoices is cheap. A company without resources can limp along for quite some time. Don’t find out the truth after it’s too late! Call us for the real scoop!
In conclusion, it is not our purpose to discourage anyone from looking at any of the new (or smaller) vendors. Many dealers could benefit from the decreased costs and more flexible contracts that may be offered. No dealer, however, should make such a decision without a full understanding of its myriad future ramifications. Get all the details and then check them again. Our advice is to approach the process with wary deliberation. Be sure to call us so that you can get the help you need to make the right choices.
