Traditionally, IT has not played a big role at dealerships. Certainly, most dealers have applications in place, but typically, systems have grown in a fairly piecemeal fashion over the years-or the decades. And those systems worked well enough, for their time.
But things have changed in automotive retailing Dealers find themselves operating in a dynamic business and facing increased competition. Customers have high expectations for professionalism and service. The parts and services business has become more complicated and more important. And we now see many traditional single-brand dealers becoming mega-dealers selling multiple brands of vehicles, offering services for all brands, and running their own marketing campaigns to gain and protect market share.
To a great extent, the fragmented systems at dealerships have not kept up, and cannot efficiently support today’s fast-moving, competitive and multi-faceted business. The key, of course, is to take a more integrated approach to IT, and use an ERP to provide better visibility and control across the dealership.
The concept of using an ERP in the dealership is fairly new. But ERPs and integration can bring dealers the same kinds of benefits that they have brought to businesses in a variety of other industries. These include:
- Data consistency. Having a single ERP that supports the entire range of dealership processes lets you drive the business using one consistent set of data across the operation-one master set of customer information, one master set of vehicle information, one master set of parts information. There is no need to re-enter information in different applications, and there is no need to spend time comparing and synchronizing differing data about the same thing.
- Transparency. Financial postings are often determined by the capabilities of the provided brand-specific dealer management system, rather than the needs of the dealer-making it hard to compare or aggregate information across brands. With an ERP, that data can be handled in a consistent manner, giving the dealership clear visibility into the entire finance picture to help determine pricing and profitability.
- Speed of information. Traditionally, data was shared across dealer systems by batch processing, often run at night or over the weekends. This resulted in delays, so that decision makers could find themselves looking at static, dated information that was a week or more old With an ERP, data about business transactions is readily available at any time, and can be easily accessed for ensuing business transactions and reporting purposes.
- Knowing the customer. An integrated ERP lets you track all information on customers’ behavior and transactions, from test drives taken to vehicles purchased and services used. Armed with consistent customer data, salespeople can serve customers more effectively and the dealership can do a better job of focusing marketing and customer-retention programs.
- Increased efficiency. ERPs can support effective service parts planning, so that parts are available while inventory is kept appropriately low and the use of financial resources and space is optimized. In addition, you can easily check parts interchangeability and inventory availability, and transfer postings across warehouses. Gone are the days when counter personnel had to write down part numbers from one system on a piece of paper, check third-party catalogs for a part’s interchangeability with other brands’ parts, and then consult another system to check the replacement part’s availability at another location.
The integrated ERP can be quite cost-effective for the dealer. Supporting a single system is simpler than babysitting a menagerie of disparate applications and technologies. And having a single system that works across the organization means employees don’t have to spend time learning various systems-they essentially learn one, and can then work across positions and locations.
Finally, an ERP can make it easier to keep up with change. When new brands or regions are brought into the business, or new OEM processes are implemented, it means modifying one system-the ERP-rather than re-doing several systems. It also means not having to spend large amounts of time on the numerous interfaces that traditionally linked systems. With an ERP, changes to interfaces with external and third-party products are managed using a single technology.
The concept of using an ERP may be new to many dealers. But more and more are understanding that ERPs promise to give them a way to streamline their operations and keep up with changes in customers, processes and the competition-which is a growing, and critical, challenge.