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New or Renew: Should I Keep My Current DMS System or Find Something New?

New or Renew: Should I Keep My Current DMS System or Find Something New?

In the dynamic world of automotive dealerships, deciding to renew or replace your DMS system is pivotal. This choice impacts your day-to-day operations and shapes your dealership’s ability to adapt and thrive in an ever-evolving industry. 

With technology advancing rapidly and customer expectations shifting, ensuring your DMS aligns perfectly with your current needs and future growth plans is more important than ever. 

In this comprehensive guide, we delve into the critical factors to consider when evaluating your DMS options — from assessing the performance of your current system and understanding market trends to conducting a thorough cost-benefit analysis and consulting with experts. 

Whether you’re leaning towards renewing your existing system or exploring new horizons, this blog is your roadmap to making an informed, strategic decision that will drive your dealership forward.

Your current DMS

Assessing its performance

When deciding whether to renew your current dealership management system or switch to a new one, a thorough assessment of its performance is crucial. 

Start by reviewing the features your current DMS offers, ensuring they align with your dealership’s operational needs. It’s essential to analyze how these features are utilized — which ones are frequently used and which you’re underutilizing. Also, identify missing features that could significantly improve efficiency or customer service.

Efficiency and productivity are key indicators of a DMS’s effectiveness. Evaluate how the system has streamlined operations, focusing on inventory management, customer relationship management, and financial reporting. 

Consider the time management aspect as well — does the DMS save time for your staff, or does it require cumbersome workarounds? The system’s ability to automate routine tasks, reducing manual effort and error, is also vital to assess.

Integration with other systems is another critical area. Your dealership management system should seamlessly integrate with other software and tools used in your dealership, such as CRM systems, accounting software, or marketing tools. The ease and reliability of data sharing between these systems are crucial for efficient operations.

User experience and satisfaction are equally important. Gather feedback from various people who use the DMS, including sales, service, parts, and administrative staff, to gauge their satisfaction levels. Also, consider how easy the system is for new employees to learn and the vendor’s ongoing support and training quality. 

Finally, assess the DMS’s reliability and performance. Keep track of system downtimes or performance issues and evaluate the system’s speed and responsiveness. Slow performance is a significant hindrance to operational efficiency. 

Additionally, consider the system’s scalability — can it grow and adapt to the changing needs of your dealership? This comprehensive assessment will provide a clear picture of whether renewing your current DMS or opting for a new system is the best course.

Analyzing costs

Analyzing costs

Analyzing costs is essential when determining whether to renew your dealership management system. Begin by examining the renewal fees for your current DMS. This includes the initial renewal cost and any recurring fees you’ll incur over time. Understanding the total financial commitment is essential.

Renewal costs

Next, assess any additional costs that could arise with the renewal. This includes charges for updates, new features, or expanded services that weren’t part of your original package. Sometimes, vendors offer essential upgrades or additional functionalities at an extra cost, which could significantly impact your budget.

Training and support costs

Consider the costs associated with training and support. If the renewal introduces new features or changes to the system, your team may require additional training. Evaluate whether the vendor charges for this training or if it’s included in the renewal package. 

Also, factor in the cost of ongoing support. Does the vendor provide comprehensive support as part of the renewal, or is it an additional expense?

Potential hidden costs

Pay attention to the potential hidden costs. These include data migration fees if you’re moving to an updated version of the system, integration costs with other software, or charges for additional user licenses. Such costs are sometimes overlooked in the initial budgeting but add up significantly.

Compare costs

Finally, compare the renewal costs with the potential costs of switching to a new DMS. This comparison should include the financial aspects and the time and resources needed for migration, training, and adaptation to a new system. 

Considering a new DMS

When considering a new Dealer Management System, staying attuned to evolving market trends that might necessitate a switch is important. These trends often reflect the changing landscape of the automotive industry and significantly impact the efficiency and competitiveness of your dealership.

  • Integration with emerging technologies: The automotive industry rapidly embraces new technologies like artificial intelligence, machine learning, and big data analytics. A modern DMS should be capable of integrating with these technologies to provide advanced predictive analytics, enhanced customer insights, and streamlined operations.
  • Mobile accessibility and cloud-based solutions: There’s a growing trend towards mobile accessibility and cloud-based systems. Dealerships are increasingly seeking dealership management system solutions that offer remote access, real-time updates, and the flexibility of cloud storage. This shift enhances operational efficiency and ensures business continuity in various scenarios, including remote work environments.
  • CRM enhancements: As customer experience becomes a key differentiator in the automotive industry, DMS solutions that offer robust CRM capabilities are in high demand. These systems should facilitate personalized customer interactions, efficient lead management, and integrated communication channels.
  • Data security and compliance: With the increasing focus on data privacy and security, a new DMS must adhere to the latest security standards and compliance regulations. This is crucial in protecting sensitive customer and business data and maintaining trust.
  • Sustainability and eco-friendly practices: With a growing emphasis on sustainability, dealerships are leaning towards DMS providers who offer eco-friendly solutions, such as paperless operations and energy-efficient data management.
  • Competitive pricing models: The market trend is also shifting towards more transparent and competitive pricing models for DMS solutions. Dealerships are looking for cost-effective solutions that offer clear value without hidden costs.

Evaluating your dealership’s needs

Current and future requirements

Start by analyzing your current dealership operations. Identify the key processes such as sales, customer service, inventory management, and financial reporting. Understand the strengths and weaknesses of your current system in managing these processes.

Look at your dealership’s growth plans. Consider how your needs might change with expansion, such as managing multiple locations, handling increased volume, or diversifying services.

Customization and flexibility

Assess how customizable the DMS is. Can you tailor it to fit your dealership’s unique processes and workflows? Customizing fields, forms, reports, and dashboards is crucial.

Evaluate the system’s ability to integrate with other tools and software you currently use or plan to use. Seamless integration is key for operational efficiency.

The DMS should be scalable to accommodate your dealership’s growth. This includes handling increased data, adding new users, and expanding to new locations without performance issues.

The decision-making process

When navigating the decision-making process for choosing a new dealer management system, it’s crucial to base your decision on concrete data and expert insights.

  • Financial data: Examine the financial impact of your current DMS, including the total cost of ownership (TCO), return on investment (ROI), and any cost savings or revenue enhancements it may have facilitated. This financial perspective is crucial for understanding the economic impact of your DMS choice.
  • Operational efficiency data: Look at how the current DMS affects operational efficiency. Metrics like time spent on various tasks, sales cycle lengths, inventory turnover rates, and customer service response times are important.
  • Comparison data: If you have shortlisted new DMS options, compare their features, capabilities, and costs against your current system. This comparison should be as apples-to-apples as possible to make an informed decision.

Consulting with experts

It’s always a good idea to consult with a dealer management system expert before finalizing your decision and signing the contract. These experts bring a wealth of industry knowledge and experience, offering insights that go beyond the surface-level features and functionalities of a DMS. 

DMS experts often have extensive experience working with a range of dealerships, allowing them to share relevant case studies and success stories. This experience is invaluable in understanding the practical implications of implementing a particular DMS in a real-world setting. 

Additionally, they can identify potential risks and challenges specific to your dealership’s size, structure, and market, offering strategies to mitigate these risks effectively.

Another critical area where experts provide significant value is in contract review and negotiation. They scrutinize the fine print, ensuring you know all the terms, conditions, and potential hidden costs. Their negotiation experience can also help you secure the best possible deal, potentially saving your dealership considerable resources in the long run.

Gillrie Institute is here to help.

Gillrie Institute stands at the forefront of guiding dealerships through the critical decision of renewing or replacing their current DMS system. As industry experts, we specialize in navigating the complexities of DMS selection, offering tailored advice that aligns with your dealership’s unique needs and future goals. 

Our team brings a wealth of experience and a deep understanding of the automotive industry, ensuring you receive insights and recommendations that are both practical and forward-thinking. 

We excel in analyzing your current system’s performance, assessing user satisfaction, and comparing potential new systems while considering the latest market trends and technological advancements. 

At Gillrie Institute, we are committed to helping you make an informed decision that enhances your operational efficiency and positions your dealership for long-term success. We encourage you to reach out to us for all your DMS needs, where our expertise becomes your greatest asset in navigating this crucial decision.